Most people know very little about debt collectors and debt collection practices and what is legal and what is not. When you become caught up in a downfall of unpaid bills, harassing phone calls from debt collectors and not knowing what to expect from debt collectors you fall into a category with millions of other consumers.

There is no gimmick; no tricks and no mystery to what debt collectors can do and what they can’t do. While the law is on your side, you really must decipher exactly what the law can do for you and how to enforce your rights. So here are some consumer rules for you to follow when debt collectors began harassing you. These are laymen’s terms for consumers.

• Debt Collectors and Debt Collection Agencies that have been hired on commission to collect on bad debt are considered third party. You do not have to deal with a third party collector. Just tell the debt collector that you do not deal with third party collections and you only deal directly with the original creditor…then hang up. Its that simple.
• Debt Collectors and Debt Collection Agencies can own the debt if the original creditor sells them the debt. Many creditors understand the time and expense it will take to collect on bad debt, so they simply sell it to a debt collection agency. The debt collector begins harassing you to recoup that money. But now, they are the creditor. Even with this in mind, you can dispute the account and tell them to send proof.

**Here is guarded secret #1. When creditors sell an account, it’s usually an old account and they usually (about 90 percent of the time) do not transfer all pertinent paperwork with your file to the new creditor. Or, the new creditor, in haste, misplaces the original documents, thus, now they are unable to prove that you owe the money. In order to prove the account is yours, detailed information is really needed because if you go into court they must prove that this account is 100% yours. This is why you ALWAYS deny, deny, deny and dispute any recollection of that account.

• Debt Collectors will call you and go through the charade of starting legal proceedings if you do not pay that day or that week. They will try and force you to send money via Western Union and they are always willing to negotiate to a lesser amount or a repayment plan over a few weeks. Do not fall for this tactic. Never pay and Never promise to pay any amounts. You always say you do not recollect any account and you need proof.

**Here is guarded secret #2. If you pay on any account, even the smallest minimum, this can re-start your obligation to pay that account all over again. See, the courts see it like this; if the account wasn’t yours you would never send money to pay on it, therefore, you are acknowledging the account by paying money towards the balance. This is why you NEVER, NEVER pay.

These are a few tactics Debt Collectors and Debt Collection Agencies will use to get you to obligate yourself in paying a debt. Once you obligate yourself, it can then be listed on your credit report. When dealing with Debt Collectors and Debt Collection Agencies, never provide any information and never promise to make any payments.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Your goal is to raise your credit score so you can enjoy lower interest loans, lower insurance premiums, a more affordable mortgage, and all the other benefits of good credit.  You have already gotten copies of your credit report, and identified the negative items that are bringing down your credit rating.  You have submitted forms to the credit reporting bureaus, disputing the negative information that they have been distributing in your credit report.  And now, you have just gotten back rejections of your credit disputes.  What should you do next?  That is the focus of this article.

Don’t be surprised that it isn’t easy to erase the bad news from your credit report.  It seems that they make it hard, on purpose.  But with a little perseverance, you can be successful. 

First, check the dispute letters that you had originally submitted.  Were you concise and accurate in stating your case?  The credit bureaus and lenders get a ton of dispute letters every week.  In order to make sure your letter is actually read and understood, keep it short and to the point.  Do not include details that will only confuse the situation. 

Don’t try to impress or scare them by quoting the law.  You may be tempted to include legal wording in your dispute letters, particularly if you feel that they have violated the law.  But a personal letter will be much more effective.  Maybe an exceptional circumstance, like an illness or divorce, forced you to default on your debt - tell them that.

Did you include documentation with your letter?  Always include anything that backs up your case.  Do you have cancelled checks or bank statements that prove you made a disputed payment?  Of course, never send the originals - make copies of all your documentation. 

If your dispute letter was rejected by the credit bureau, be sure to correspond with the lender or organization that reported the negative item to the bureau.  If you’ve ever contested a charge on your charge card, you know how they play this game.  You ask the credit card company to delete a charge you think is wrong.  The credit card company says they will suspend the charge while they investigate.  They check with the merchant who recorded the charge, and - surprise! - the merchant says the charge was valid, and the credit card company re-instates it on your bill.  Thanks for nothing.  Well, you’ll probably get a similar run-around when you contest items on your credit report. Try a different angles in your follow-up letter.  You should try dealing with a different department in the lender organization to see if they are more sympathetic to your cause. 

Persistence will pay off.  If you deal with the credit bureaus and financial institutions in a professional, but firm way, you are more likely to be successful in your dispute.  Remember, that although your dispute is with an organization, a person will be reading your letters.  If you connect with them in a personal way, they are more likely to understand your position.

Courtesy of: The Credit Secrets Bible

Debt Collection is an industry that works for the creditor to recover all the money you owe. They will do anything to recover their money; harassment via daily phone calls, threats to expose your debts and letters, many letters to recover the principal and interest owed.

Sure, there are federal and state laws to help the consumer, but when consumed with guilt and overwhelmed with the financial pitfall we’ve created it’s often easier for us to give in to their threats, not knowing we don’t have to.

And even those obvious laws don’t stop aggressive debt collectors. Don’t expect them to share the rules and regulations with you. But what about the little known tips and tricks that can stop them dead in their tracks?

Did You Know;

1. Debt Collectors cannot legally collect a debt unless they are registered in your state?

2. Debt Collectors must register with monetary regulators in your state before they can collect any debt or contact any consumer.

3. They must position a usury bond before performing any business in that state.

4. Third, the majority of debt collectors are not the owners of the bad debt; they are only working for the original creditor to recover what is owed.

When a debt collector contacts you, there are some specific questions you must ask before responding to them. Keep in mind, a debt collector is calling to (a) talk or threaten you into paying your debt (b) calling to get as much information on you as possible. There are various ways to deal with these scenarios.

1. Ask the debt collector what is the original creditor’s name.

2. Tell the collector point blank, you do not recall incurring any debt with that named company.

3. Most importantly, request proof or validation of the debt. They will have 30 days to send you proof.

4. Do not give out any other information. Debt collectors will ask to verify information. They only want to make sure you live and work at the same place and they are able to keep in contact with you.

Very important: Never acknowledge a debt with a collector. Doing this can restart the statute of limitations, that is, the time limit that a creditor has to sue you for non-payment, as well as the seven year credit-reporting limit.

Another technique you can try, that will only stall the collection cycle is telling the collector, “I don’t deal or discuss any debts with third party agencies and I must contact the original creditor to converse about this.”

And finally, there are many debt collection companies that purchase the debt for pennies and then try and collect on it. Your debt was sold primarily because the original creditor could not successfully collect on it.

But just think about it. If the original creditor could not collect on it, how would a debt collector become a better source to recovering old debt? They can’t; but consumers don’t realize this and by the time it makes its way onto the credit report, consumers give up.

You can stop debt collectors in their tracks, without giving up your hard earned money. The learning process is easy if you’re willing to fight back.

——————————–

Download a free special report that reveals hot insider tips and tricks of how to deal to deal with debt collectors and how to restore your credit. Click here for more details.

Most consumers with bad credit are banished from the “A” credit club where everything and anything is available for the asking. Bad creditors are pigeonholed into searching for sub-prime services and relinquished to years of high interest rates.

The majority of creditors search for free credit repair. Regrettably, there are no services that will repair your credit for free so, if you are looking for “free credit repair” you will have to do it yourself.

There are also some reputable, economical credit repair services offered for consumers who don’t have time to learn the credit repair process. However, completing this task yourself has its advantages and most people who learn about the credit game have better chances of not getting into a credit dilemma again.

When you are ready to begin your credit repair journey, you could start by getting a free credit report from all 3 credit bureaus. But there is a drawback to getting a free report: it increases information verification period time for disputed accounts, which can be a huge disadvantage to you.

Equifax, Transunion and Experian, by law must give you a free credit report, once per year, upon request. Repairing your credit means knowing which creditors you owe; what positive and negative tradelines (that is accounts) are listed; and how much debt you owe.

Next, become familiar with the laws and guidelines to follow when repairing your credit. Learn about disputing negative tradelines, the amount of time credit bureaus have to respond to consumers and how to negotiate with creditors.

Lastly, review the credit repair forums. A credit repair forum is a discussion group made up of individuals with common interest. There’s tons of information online – be cautious – there’s lots of misinformation online as well. Remember; always research your questions thoroughly online with different sources.

After hours of research, I’ve realized that credit repair is one of the most misunderstood topics online. Much of the information is misunderstood and repeated to the masses, therefore, convoluting the message. While many try and help, valuable time is wasted and people become financially damaged.

Free credit repair means doing the legwork yourself. Consumers must take the initiative to learn all options of credit repair.

For those searching for a solution to making extra money and debt cures you need to think realistically about how to resolve these issues.  How can you make extra cash to become debt free and build your savings account up?  Here are some tips to help accomplish your goals;

1.Sell something on EBay.  In a recent survey, 1.5 million people said they supplement their income by selling items on eBay.  You can log on to their community first to get a feel for the kinds of fees that are involved, as well as the merchandise and pricing that are most popular.  Then you can go through your old trinkets and clothing you want to part with and try your hand at selling them online.  Additionally, you can purchase inexpensive items and garage sale gems to sell at a profit.

2.Cater dinners or homemade goods.  Start by contacting churches.  No state or local licenses are required IF you work on a small scale.  Promote yourself through local news and community papers, community boards and flyers.  Factor in the cost of ingredients, delivery and labor in your prices.  You can also contact businesses nearby that might be in need of catering services for office meetings.  If you need a place to develop your catering, speak with churches about renting out their kitchen or the fire house.

3.Start a personal concierge service. Offer your services to people in your neighborhood such as busy professionals or individuals with children to help them through their to-do lists.  Run errands like picking up the dry cleaning or grocery shopping.  Shop and wrap special gifts and deliver packages to the post office.  You can charge a flat rate or an hourly rate with incentives to drive traffic to your door.

Those are all ideas for the entrepreneur in you; however, also consider getting a part-time gig at the local mall or an office looking for extra help.  You must keep your goals in mind of ridding yourself of extra debt and setting objectives to get it done.  The longer you put off making a dent in that list of payables, the longer it will take to pay it off.

Your payment history is a record you’ve established with the 3 major credit bureaus by either paying or not paying your bills on time. This history is recorded by all of your creditors on your three credit reports.

The 3 major credit bureaus, Equifax, TransUnion and Experian keep this information on file for you, your creditors and any new lenders.

Your credit reports will reflect your payment history on all of your credit accounts you’ve had for the past 7 to 10 years. This includes your student loans, mortgages, retail store credit cards, auto loans, telephone, utilities (cable and gas and electric), although usually utility companies do not report until you fall into delinquency.

How do the Credit Bureaus know if I pay my bills on time or not?

The credit bureaus do not know if and how you initially pay your creditors. It’s your creditors that know whether or not you are paying them on time, and they report your payment history to the credit bureaus; whether it’s a good or bad report, they run and tell.

This process is called “lender reporting” where your creditors will send, typically, all three credit reporting bureaus the current status of your accounts utilizing an electronic tape.

Lenders do pay to make reports; therefore they may choose not to report to all the bureaus.

Once the credit reporting agencies receive this tape, it’s loaded into their system and then unloads into their databases, hence, creating an updated record of all your accounts and payment history month after month.

Ratings: Your Current Status

All your accounts should be paid on time; however, many of us fall behind and believe me, all of this is reported. The finest status you can have on any account is “Paid as Agreed.” This means that the creditor is reporting your account as being paid according to the terms of agreement you signed.

If your account is past due then your current status rating will change and this will make your points drop. The current status is commonly displayed as a numeric value that ranges from 1 to 9. If your account is being paid as agreed then the rating will be a “1.” Basically any rating other than a “1” is bad. This means you’ve been late paying your creditor and when you apply for more credit, the potential creditors will see this as a red flag.

This identifies how the payment reporting systems works and just how your payments are reflected on your credit report.

The creditors systems are automated to update your payment history in their computers, which they send to the credit reporting bureaus each month to update your record. Before falling behind in payments, you can always call the creditor and try to get a better payment arrangement. This will not get reported and the payment history will remain positive.

Your First Credit Card

Everyone needs to start building credit at some point. Whether you’re in high school or college, starting out isn’t that difficult (as long as you’re at least 18 years old).

Getting approved for that first credit card can seem like an overwhelming task, but today lenders make it easier for your first time. If you have applied for a few credit cards and were turned down, don’t worry. Change your strategy and you’ll have plastic in your wallet in no time.

One of the more common mistakes that people tend to make when applying for credit cards is applying for the incorrect card that doesn’t really suit them. The major credit cards like Visa, Master Card, American Express and Discover are very difficult to come by for the first time card holder.

But finance cards are much easier to get. Finance cards are credit cards that are issued via a store or franchise and you can only use at that business. Some finance cards include Target and Best Buy.

The finance credit cards do not carry as much significance on your credit report as a major credit card will, but they are a good way to start out when establishing credit. It shows responsibility for a new card holder.  And if you still find it difficult to get a finance credit card you may want to consider a secured credit card.

Secured Cards

Secured credit cards are issued based upon a deposit you make in the amount of the credit limit. It may sound strange to some to pay $300 to get a credit limit for a $300 credit card, but a secured credit card can be a major impact on your credit report.

When applying for a secured credit card, keep two things in mind: that the card will still report your credit limit and, depending on the creditor, that the card will not show up as a secured credit card on your credit report.

Receiving a card that reports your credit limit is very important. This is because of the way credit scores are calculated. To score well, your debt ratio should be less than 30% on revolving accounts. If your secured credit card doesn’t report the credit limit, the credit report bureaus will use the total amount charged as the credit limit and this will look as though your debt ratio is 100%.

Additionally, it is extremely important to make sure your card is not reported as a secured credit card. If your credit card company reports your card as being a secured card, this will impact your credit score negatively.

Getting your first credit card can seem like a daunting task, but it isn’t. If you do your research and choose the best card for you and your lifestyle you will be approved before you know it.

————————

Discover the secrets for establishing or restoring credit, fast! Check out The Credit Secrets Bible today.

Have you recently been denied a loan, or a credit card? You may be in need of credit repair. Being turned down for credit is a hint that you probably have some negative entries on your credit report, which can happen in two circumstances.

You have either mismanaged your credit, which is now reflected in your credit report; or your credit file has some flawed information, hence negatively impacting your report. No matter which situation you find yourself, it is imperative that you embark on credit repair sooner than later.

To Do:

Here is an approach to assist with your credit repair.

• Start by requesting a copy of your credit report from any one of the 3 credit bureaus. Reports are free for your first request each year.
• Upon receiving your report, examine it closely. You must to study each account (also known as tradeline) and mark those which are incorrect damaging your credit value. Errors are more surprisingly common.
• After you have determined which tradelines are erroneous entries, you must contact the credit bureau and request deletions from your report.
• Even when you find some correct entries in your credit report, but the information is negative in nature, you can still try and have them removed. This goes a long way in ensuring positive credit repair. There is a time limit for which negative tradelines can remain on your credit report (usually between 7 and 10 years). If this time limit has passed, write to the credit bureaus and ask them to delete the negative items.
• Make certain all your correspondence with creditor and credit agencies is through registered mail. This way, you will have proof your requests was directed to them and also the date you initiated the process of your credit repair. Maintaining a record will help you such any deleted entry is re-included in your report in the future.

Side note: Some experts advice against sending certified or registered letters to the bureaus as this could potentially raise a red flag.

• The law allows 30 days for any action to take place. If the credit bureaus determine that the entries were wrong, they will delete the item from your report, hence helping bring the credit repair that you were after.

If the matter is not resolved to repair your credit, you should persist and challenge the negative items on your report.

What You Should Not Do:

Individuals with a low credit scores often try desperate means to repair their credit and hence end up hindering their credit even more. Here are some of the items you SHOULD NOT DO to repair your credit:

1. New Credit File or File Segregation: Many bogus credit repair companies entice people with false promises repairing bad credit by telling them they can create a new credit file. They promise a new credit identity. This is illegal and also known as file segregation.

2. The Ability to delete accurate information from credit report: Many credit repair companies claim to they can repair credit by getting accurate negative information deleted from their credit reports, thus improving their rating. Now, this is not guaranteed. You must first understand the process of getting information removed.

When you dispute the information on one of your tradelines, the credit bureau will contact that creditor listed on your report and ask them specific information about the tradeline. They contact them to verify the account. Sometimes, the creditor cannot verify the information for various reasons thereby allowing the credit bureau to remove the negative information. However, many times the creditor has kept good records and can verify the information. As you can see, it’s a gamble and nothing is guaranteed.

Thus, you should not trust anyone who tells you that they can repair bad credit by removing negative items from your credit report.

3. Advance Payments: Asking for advance payments for credit repair is illegal. They can only charge you for legitimate services that they have already provided. Do not be lured into any contract promising to repair your credit before any work has been done.

Part 1 of the World of Credit Cards explained bank credit cards and how they work. The easiest credit card to attain is travel and gas cards.

Travel, Gas and Department Chain Credit Cards

These cards are easier to qualify for. Similar to bank credit cards however consumers can charge purchases at various gas and convenience stores. However, they are different from bank credit cards because they are offered directly by the companies and not via the bank lender.

Travel and Entertainment related venues once widely accepted these cards. Some places such as airlines, hotels, restaurants and car rentals widely accepted these cards and still do today accept with broader guidelines. Nowadays, other establishments, such as department stores and gas stations, accept them. Like any bank card, the typical travel and entertainment card of today offers the menu of features that most credit card holders have come to expect.

Another major difference among these cards is, they do not carry an extended line of credit. Meaning, upon receiving your monthly credit card statement, you will be required to pay your outstanding balances in full.

A house card is accepted only at specific stores or stores within the same chain. Retail credit cards are one of the largest types of credit cards; major store chain card issuers include department stores, gas and convenience stores, and a few telephone companies. The Discover Card, once owned by Sears, was the most well-known chain store card until it was purchased by a banking institution.

Merchants view these credit cards as an advantageous marketing platform. These cards help to assemble customer allegiance and improve their sales; Just like a bank credit card, a house or chain card provides you with a line of credit. This credit limit will vary depending on your past credit history and current creditworthiness. These cards offer a revolving line of credit and you can pay a minimum on your balance each month.

All credit cards will carry an interest rate which will add on additional costs to the consumer. If you carry a number of credit cards, you may want to consider discarding of some (but don’t close the accounts!) and saving you some money in the long run.

If you are the type who pays your entire balance each month and does not carry a balance, you can probably qualify for a credit card with no annual fees. However, as with everything, read the fine print and pay close attention to dates. Banks are known for increasing fees and interest rates after a specified time.

——————

Discover places to find easy-to-get credit cards to help restore your credit and raise your credit score. Check out the Credit Secrets Bible today.

Every day lenders clog our mailbox with over 4.5 billion pieces of promotional offers inviting consumers to apply for a new credit card. Even those not qualifying for the conventional credit cards due to impaired credit receive offers; some credit card issuers specialize in marketing these offers to consumers worldwide.

Credit is our economic foundation and we rely on this. The average American household is projected to have a minimum of ten credit or charge cards. Most consumers will think one card is just the same as the next, that’s not exactly true.

There are in distinctions among each card and characteristics for the category of credit cards. There basically are four distinct, different types of cards used today: a bank credit card, a gas card, a retail credit card and a charge card.

Part 1 of this 2 part credit card article will explain the various credit and charge cards.

Major Bank Credit Cards

Most people are familiar with MasterCard, Visa, and Discover card. These are the major bank credit cards. While these cards are the more well known banking cards, none directly distributed to consumers; the first two companies (MasterCard and Visa) do not issue credit cards directly to consumers.

These credit cards are issued to banks that are approved by Visa and MasterCard to utilize their name and distribute to consumers. Each bank is associated to the credit card association, because they are not allowed to issue any kind of card unless they are association members.

A bank credit card provides a revolving line of credit. Each month upon receiving your credit card statement, you have a choice of paying the entire balance or a portion of it.

Upon receiving this type of card, you will be authorized for a pre-determined credit limit. This limit will depends on factors such as credit history, monthly salary and disposable income. Not all major bank credit cards offer advantage to you. These cards come with various interest rates.

For many years, high interest rates were only for those people with a slightly damaged credit history. Now days, high interest rates are common and more readily accepted.

This is the most valuable type of credit card to get when building or repairing credit. However, it’s possible for card holders to get themselves into trouble when they are unable to manage this revolving credit line. If this happens, the bank will cancel your card and place a negative mark on your credit report.

Many guidelines of the bank credit cards have changed; Most of the features and benefits changed, some for the good and some not so advantageous, but the basic characteristics of these bank credit cards have remained the same.