How to Get Out of Debt With the Get Out of Debt Guy » credit-repair

The Financial Expert Group Says for a Fee They Can Make My Bad Credit Go Away. – Carol

Steve Rhode — Tue, 15 May 2012 15:38:19 +0000

“Dear Steve,

I made some bad credit decisions back in 2008 or 2007. A company called The Financial Expert Group, Inc
26650 The Old Road, Suite 110,Stevenson Ranch, CA 91381 is telling me if I pay them $5400 they can make this debt go away for every.

Carol”

The Answer:

Dear Carol,

Save your money.

If you think you can pay $5,400 a have bad debt magical disappear without any consequences, you would be mistaken.

I agree, inaccurate information can be removed from a credit report. That’s something you can do yourself for free. All you have to do is get a copy of your consolidated credit report and notify the credit bureaus of information that appears on each credit report that is not accurate.

I did visit the Financial Expert Group website and found what I consider to be some misleading statements. For example, “Our Credit Restoration service is the most popular. It permanently removes derogatory accounts from your personal credit reports such as (Late Payments, Charge-Offs, Collections, Judgments, Bankruptcies, Tax Liens, etc.).” – Source

That gives people the impression that this company has some way to remove accurate but negative information from your credit report. If you actually did that and then went and applied for credit using a false credit report you are committing credit fraud.

Additionally, any company that charges you in advance for credit repair services is in violation of the Credit Repair Organizations Act. No advance fee may be charged. And from their website it looks like an advanced fee may be charged since they say, “Our clients pay on a per-item basis. In the case that we are unable to delete an item by the time your contract expires, you will receive a full-refund* for that item, should you choose for us to stop working on it.” – Source

The company website seems to indicate their approach is to reportedly dispute items in hopes they go away.

The problem with that approach is while the credit bureaus may miss a review date and remove an item, there is nothing to prevent it from being re-reported by the original creditor.

If you want to clean up your credit of inaccurate information and rebuild a better credit score you can do that almost for free just by following the advice below.

Get a Copy of Your Consolidated Credit Report

Get a copy of your consolidated credit report. It is the type of report that includes all the major three credit reports in one report. I only use a consolidated credit report to check my credit and the link will take you to the credit report I use.

Your credit report is like a report card of sorts. You need to look it over and make sure that all the accounts listed on your credit report are yours. If they were not, you need to write to the credit bureaus that are reporting them and tell them they are not your and ask to have them removed. It’s like you looked at your school report card and it listed classes you did not take. They should not be there.

If the rest of the accounts belonged to you but you had a bad track record with them, that information stays on the report just as if you got a D in a class you took. Just because you got a bad grade does not mean the class is removed from a report card.

After seven years the bad credit items will no longer be reported on your credit report. When you look at your consolidated credit report if any of them list negative information longer than the seven year period, then when you write to the credit bureaus to point out any incorrect information, you can tell them about the old items.

Generally the credit bureaus are good about automatically removing the old items.

While you are at it, look for any delinquent accounts that may be younger than seven years old. If you have any, pay them off. The contact information for the creditor will be on your credit report.

I also recommend you get a free account on Credit Karma so you can use the free credit simulator to see how changes to your balances or accounts will improve your credit score. This way you can plan what actions to take first to get the maximum improvement.

Credit Karma will also provide free daily credit report monitoring and free credit scores but only for one credit bureau. Still, it’s a free service that can be very beneficial.

Boosting Your Credit Score With Good Credit Using a Secured Card

Using the report card analogy, if you wanted to bring up your GPA you would need to earn some better grades to do it. It is the same with your credit report. If you want to bring your score up you need to start having new and good credit reported about you.

The best way to do this is to get and use a secured credit card. In fact get two different ones. I put together a section of the site that lists reviews for secured cards. Look at the secured cards here.

The advantage of getting a secured card is that you will get the credit card and not get a rejection on your credit report that will further hurt your credit. A rejection can be easily spotted by looking at the inquiry section of your credit report and seeing there is not a corresponding card opened. And with your current bad credit, if you applied for an unsecured card, you would get rejected.

The reason you will get the secured credit card on the first attempt is because you need to put up a deposit with the bank that is equal to your credit limit. The deposit will earn you interest and in the unfortunate event you were unable to pay your card and defaulted, the bank would use your deposit to pay the debt.

When looking for a secured card you want one that will report to all three credit bureaus. This is key. We need your new good payment history reported.

Now when I say use the card, you do not need to carry a balance from month to month. Just use the card for regular purchases and pay the card off either immediately or at the end of the month.

Also, if you get a secured card with a $300 limit, never have more than 35% of the limit on the card. Even though your initial limits may be low, you don’t want to max them out. You can always increase your limits by increasing your deposits. You can increase your credit limit by increasing your deposit with the card company.

I suggest getting more than one card so you can get as much good juice flowing to your credit report without having too many credit cards open. You could actually go with three if you wanted to, but no more than that.

Just make sure the card will report to the credit bureaus.

Heck, if you want to see what your credit score looks like and what you can do to improve it you can just go to CreditKarma.com and do all of that for free.

Who is The Financial Expert Group?

The website for the company (financialexpertgroup.com) says the company is:

The Financial Expert Group is a team of experienced credit experts, knowledgeable support staff and professional customer service representatives who’s only goal is to assist you in improving you credit. – Source

They also list their address as 26650 The Old Road, Suite 110, Stevenson Ranch, CA 91381. An online search using this address identified multiple companies. I have no way to confirm independently that this is not a mail drop or shared address.

The company is a registered California corporation since 2002.

Interestingly the owner and administrative contact of the domain name is listed as:

Claudia Jawher
claudia_aguileraz@hotmail.com

Sunshine World Services
18501 Calle Vista Cir
Porter Ranch, California 91326

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Just Had Negative Items Removed From Credit Report. Will My Score Go Up? – Melanie

Consumer — Mon, 02 Jan 2012 13:34:40 +0000

From How to Get Out of Debt

I just had a tax lien removed from my Equifax credit report. I also had eight other items removed from my Equifax report. Four of them were new collections. All under a year old.

On my TU report I had ten items removed. A few were under a year old. I had one 10 items removed from my Experian report. Will my credit score increase due to the deletions of these collections and the tax lien?

Melanie

Veracity Credit Consultants Reaches Settlement With Colorado Attorney General

Steve Rhode — Mon, 21 Nov 2011 16:21:44 +0000

From How to Get Out of Debt

Colorado Attorney General John Suthers announced recently he has reached a settlement with a Veracity Credit Consultants LLC, a Denver-based company, that bars the company from charging upfront fees in exchange for credit-repair services as well as misleading consumers about their abilities to cleanse consumers’ credit reports. Under the terms of the agreement, Veracity Credit Consultants must pay the state $400,000 in restitution, costs and fees.

The settlement follows a February 2010 lawsuit the state filed against the company alleging that it charged upfront fees for its services, which is illegal under state and federal law. The company, according to the complaint, required that consumers pay an initial setup fee of up to $99 and monthly fees of up to $79. Under Colorado law, a credit-repair firm can only charge fees once its services are complete.

“Consumers attempting to get out of debt should always carefully examine any promises credit-repair companies make,” Suthers said. “Consumers also should never do business with any company that charges upfront fees for any credit-repair services. Upfront fees are prohibited under Colorado and federal law.”

Suthers said the Colorado Credit Services Organization Act and similar federal laws:

* Prohibit untrue or misleading statements and representations;

* Prohibit advance fees for services;

* Require disclosure of the total amount a consumer will have to pay for credit repair services;

* Require disclosure about when accurate information can be removed from credit reports;

* Require disclosure of a consumer’s right to correct inaccurate information; and,

* Provide consumers a five-day right to cancel a credit repair contract. – Source

@GetOutOfDebtGuy

How Can I Fix My Bad Credit So I Can Get a Loan? – Andy

Steve Rhode — Sun, 20 Nov 2011 11:21:30 +0000

From How to Get Out of Debt

“Dear Steve,

I let two parcels of real estate,one my home, go into foreclosure. Both had first and second mortgages. They were both worth much less than the principle amounts.

I have no debts whatsoever.

I have the downpayment and income to buy a new home but cannot get approved for a new loan because my credit score is very low. Need your advise.

Andy”

The Answer:

Dear Andy,

If you have no residual liability or debt from the unfortunate situation with the real estate then repairing this situation is relatively straightforward and easy.

Just follow the steps in How to Easily Rebuild Your Credit and Have Good Credit Again.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

The Franklin Group / Franklin Financial Group – Consumer Complaint – 11-11-2011

Consumer — Fri, 11 Nov 2011 14:50:56 +0000

From How to Get Out of Debt

Date This Problem Happened: July 11, 2011

State You Live in: Florida

Race/Ethnicity: White

Age Range: 21-35

Total Amount of Fee Paid: $1,125

Company Name: Franklin Financial Group

Company Address:

337 E Bay St.
Jacksonville, FL 32202

Company Telephone Number: 904-632-1801

Website of Company: Franklin-Finance.com

Consumer Statement:

I had been paying Franklin Financial (Jacksonville FL) for over a year for credit repair. $75 a month. In July they stopped charging me and it seems they are just out of business. With 15 months of paying $75 a month, my credit is exactly the same, scores are even a little lower, and things on report just marked “in dispute” said my local credit union.

Franklin Financial said it took ’5 rounds’ of disputing and requesting reports until they could really do something to get stuff removed. Well, after the 5th round..they are out of business?????!!!!!

I got ahold of email of girl who was handling my ‘case’ via email asking her if out of business, no one returns calls, and I went to credit union to get approved for car loan and my credit scores lower and everything still on and just said ‘in dispute’.

She wrote back about sending her a copy of the credit unions credit report of mine. But, I emailed her back saying “are you out of business???” and no response!

Consumer Action Taken:

I have emailed numerous times, called, faxed. I get NO response.

Note:

The website lists two names for the company. The say they are both The Franklin Group and the site title is Franklin Financial Group. – Source

According to the State of Florida corporate records there is no active company under The Franklin Group and Franklin Financial Group.

I was however able to locate Franklin Financial Group I, LLC. – Source

There is also a Franklin Financial Froup I, Inc. that was made inactive and was owned by Dionne.

The domain name franklin-finance.com is owned by:

Tom Dionne
8550 Argyle Business Loop
Jacksonville, Florida 32244

There is no corporate officer under Tom Dionne of a company with a name even remotely similar in Florida.

There are three additional sites on the same server with Franklin-Finance.com:

fixmyfile.com
franklin-finance.com
get-financed.org
rebuildandbuy.com

It is a bit odd that the website for The Franklin Group would not use their correct name.

According to the BBB the company maintains a B+ rating with eight complaints closed in the last twelve months. – Source

We sent a letter to the company at the address given by the consumer and asked them to publicly respond to this complaint.

@GetOutOfDebtGuy

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Credit Repair Company Keeps on Pitching. FTC Does Not Find It Funny.

Steve Rhode — Thu, 20 Oct 2011 18:23:48 +0000

From How to Get Out of Debt

Responding to charges by the Federal Trade Commission, a U.S. district court has found a credit repair seller in contempt for violating a previous court order that required him to stop promoting worthless credit repair products and services to consumers. The contempt order finds Rick Lee Crosby, Jr. in civil contempt for violating a permanent injunction against him, requires him to reimburse consumers, and imposes a fine against him for each day he continues to violate the permanent injunction.

Despite a final order issued against Florida-based RCA Credit Services, LLC and its principals Rick Lee Crosby, Jr. and Brady Wellington, the court found that Crosby continued to market and sell credit repair services, including e-books, videos, and counseling sessions advising consumers with poor credit how to improve their credit score by using websites such as www.creditambassador.com and www.legalcredit.com. Also, by referring customers to other credit repair services, he violated the final order’s prohibition against assisting others in offering credit repair.

The contempt order stems from a complaint the FTC filed in October 2008 as part of the agency’s crackdown on scams that target consumers in financial distress. According to the complaint, until they were ordered to stop, RCA, Crosby, and Wellington ran deceptive online advertisements that claimed RCA could “Boost Your Credit Score Into The 700s in as little as 30 days,” and could remove “ANY or ALL Negative Accounts From Your Credit Report.” They further stated that a credit expert would “coach you on ways to remove negative remarks and unpaid debts from your credit report while adding new positive reporting accounts to your credit file.”

RCA Credit charged from $500 to more than $3,000 for its “services” and required at least partial payment up-front. In many instances, the FTC charged, the defendants provided consumers no services at all. The FTC also charged them with violating the Credit Repair Organizations Act by failing to provide, before contracts were signed, a written statement of “Consumer Credit File Rights Under State and Federal Law;” failing to include conspicuous statements in their contracts about consumers’ right to cancel without penalty or obligation within three business days; and failing to provide a written “Notice of Cancellation” form.

On October 15, 2010, after a trial, the court issued an amended final order permanently shutting down RCA. The order bans Crosby and RCA from providing any credit repair products or services, prohibits them from making false credit repair claims, bars certain misrepresentations, and requires them to pay more than $350,000.

The order against Crosby finds him in civil contempt for violating the terms of the court’s final judgment and permanent injunction issued last year. It requires him to pay $7,935 and will allow the FTC to use the money to provide refunds to consumers he defrauded. Finally, the order imposes a $264 fine for each day that Crosby fails to comply with the terms of the amended final order, with the fines continuing to accrue until he has proven to the court that he is complying with its terms. – Source

@GetOutOfDebtGuy

Selling or Buying Credit Repair Services? Read This Before You’re Busted.

Steve Rhode — Thu, 25 Aug 2011 15:09:35 +0000

From How to Get Out of Debt

The latest unbelievable resurgence in the debt relief world is advanced fee credit repair. That ship sailed a decade ago, at least.

Companies are telling marketers that they can sell credit repair services and basically “charge whatever” they want to.

But there is this little thing called the Credit Repair Organizations Act (CROA) that prohibits the collection of any fee or compensation before any credit report assistance is fully rendered. Even then, the company may not sell services that are designed to remove negative but accurate information from a consumer credit report.

Credit repair operations seem to be completely stupid when it comes to marketing these services. Basically the premise of the sale and payment immediately violates federal law and leaves the provider swinging in the wind.

This doesn’t even take into consideration the state laws out there that prevent the very same thing.

Oh yes, in addition, before the entity sells credit repair services they must inform the consumer they can do it for free without the help of the company.

North Carolina Credit Repair Idiot – Busted

This credit repair idiot not only engaged in selling credit repair services but pretended to be a police officer to deliver it.

Monterrio Dieshaun Adams, doing business as M&M Business Concepts, LLC, from offering credit repair services and charging consumers advance fees for help with their credit. Attorney general Cooper is seeking to permanently ban Adams’ fraudulent business practices and win consumer refunds and civil penalties.

More than 300 consumer files obtained from the company show that Adams created fraudulent police reports using a computer template to falsely claim that the consumers had been victims of identity theft. He would then send the false police report to a credit reporting agency, like Equifax, with the goal of convincing the agency that negative information on the consumer’s report was a result of identity theft. His goal was to get credit reporting agencies to raise consumers’ credit scores. However, the police report and disputed information was routinely sent back to the creditor for verification, which led to the scheme being discovered. In the end, consumers got no real credit repair help.

According to the police report and affidavit filed during the investigation of this idiot the police investigator stated.

Mr. Parker, SECU’s Credit Reporting Manager, reported that, at his request, Equifax had sent him copies of purported police reports that had been submitted to Equifax by or on behalf of some SECU customers. In reviewing the reports, Mr. Parker observed that the reports contained unusual similarities. For example, the form used for each report was the same, even though they were purportedly prepared by different police departments across North Carolina. In addition, in many instances, the name of the reporting officer was the same; many of the officers’ ID numbers were the same; and many of the reports contained identical case numbers. Further, in all of the reports, in virtually identical language, the purported reporting officer reported that the SECU customer stated that he or she had been a victim ofidentity theft that is, that someone had stolen their identifYing information and used it to obtain credit in their name without their knowledge or authorization. In turn, these purported police reports had been submitted by, or on behalf of, the customers to Equifax, in support of the customers’ contentions that the payment history or other information supplied by SECU to Equifax was incorrect because the accounts allegedly did not belong to them due to fraud, and therefore should be removed from their credit reports.

I obtained a search warrant to search the office of M&M Business Concepts at 3737 Glenwood Avenue, Suite 100 in Raleigh. Sergeant Dunmyre and Detective Embler assisted with the “search and recording of the evidence collected. We entered Suite 100, and I asked for Monterrio Adams. The receptionist called him on the phone, and a moment later a male walked out and identified himself as Monterrio Adams. I identified myself, and told Mr. Adams that I wanted speak with him. Mr. Adams asked that we step out into the lobby, since he had a client in his office.

I asked Mr. Adams if he could explain the nature ofhis business. Mr. Adams said that he “helped people with their credit,” but he was vague as to the specifics of how his business worked. On further questioning, Mr. Adams admitted that he prepared police reports on behalf of clients, that he subsequently sent the reports to Equifax, but that he had not filed these reports with any police departments. Mr. Adams claimed that he did not realize he was doing anything wrong, and that he was “just trying to help people out.”

I asked Mr. Adams for permission to look around his office. Mr. Adams refused, so I showed Mr. Adams the search warrant, and I read it to him. At that time, Mr. Adams allowed us to conduct a search.

Our search of M&M’s office yielded over 250 individual client files that had manufactured or fraudulent police reports inside of them. We discovered an additional 104 client files also relating to credit repair services that did not contain any police reports, but contained some paperwork, such as copies of the client’s driver’s license, e-mail correspondence, or payment records. As part of our search, we seized these two groups of files. Finally, there were approximately 114 additional files that contained only the client’s contact information but contained no other paperwork or information. We did not take these files as part of our search, but I wrote down the names ofthe clients.

As part of our search, we inspected the computer files on Mr. Adams’ computer. On the computer were form templates to prepare police reports, as well as facsimile forms for use in submitting documents, including falsified police reports, to Equifax. Mr. Adams acknowledged to us that he had faxed and mailed documents to Equifax contesting items on clients’ credit reports, and that those documents included false police reports that he or his employees had prepared for purposes of making it appear that clients had filed actual police reports contending they were victims of identity theft. Mr. Adams also admitted to filling out identity theft affidavits online on behalf ofhis customers. – Source

The Lessons Learned

If anyone has approached you to purchase credit repair and said they were going to charge an advance fee or remove negative information from your credit report, report them to me.

If there is inaccurate information on your credit report you can get that removed yourself by contacting the credit bureaus that are reporting the inaccurate information and letting them know.

If you are considering getting into selling credit repair services, here is the best advice you will ever get on this, don’t do it.

@GetOutOfDebtGuy

Credit Issues? You Are Not Alone – Fax – SCAM WATCH

Steve Rhode — Tue, 28 Jun 2011 20:13:46 +0000

From How to Get Out of Debt

Be on the lookout for a fax that is being sent out below.

A tipster sent in the fax below and it raises a number of red flags for me.

The fax allegedly comes from the 561 area code (561-634-2067), the unsubscribe is in the 208 area code (208-337-6079) and the fax back number is in the 301 area code (301-263-7797).

I sent back one of these faxes the other day to hear what the sales pitch was but I never heard a word back.

There is no way to know where you information goes if you respond to a dubious offer like this. Be careful.

Claims to remove bad credit for an advance fee are a violation of the Credit Repair Organizations Act.

@GetOutOfDebtGuy

Credit Repair Provider Wants to Barter for Sporting Goods

Steve Rhode — Fri, 04 Mar 2011 16:54:01 +0000

From How to Get Out of Debt

Click image for larger view.

@GetOutOfDebtGuy

New Jersey Says to Avoid Credit Repair Scams. Puts Out Interesting Video.

Steve Rhode — Fri, 21 Jan 2011 15:39:05 +0000

From How to Get Out of Debt

The Garden State has launched a campaign to help warn consumers about credit repair scams. Theor campaing is replete with a credit repair brochure, video and radio ad.

NJ Credit Repair Warning

I did laugh out loud at the video they put put below.

The guy in the video, who apparently overspends on his credit card to impress a woman, gets declined and rejected. His date never goes out with him again. I’m not sure if that’s a lesson in credit repair or more about how to get ‘lucky’ using credit.

[quicktime]http://getoutofdebt.org/wp-content/uploads/creditvideo.mov[/quicktime]

“Your credit history is critically important when financing a major purchase, obtaining a loan and even when applying for a job,” said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. “Through this outreach campaign, we want consumers to learn that everything that a credit repair company will claim to do for you legally, you can do for yourself at little or no cost. We’ve seen these so-called credit repair companies scam consumers out of hundreds of dollars while essentially doing nothing and we want consumers to be alert to these frauds.”

The Division of Consumer Affairs outreach campaign is primarily funded by a grant from the Sears Consumer Protection and Education Fund.

The outreach campaign includes radio ads that began airing today and newspaper ads will appear this Sunday. Both the radio and print ads refer consumers to the Division’s web site, www.njconsumeraffairs.gov , where detailed information has been posted.

The posted information includes how to obtain a free annual credit report and how to notify the credit reporting companies of incorrect or missing information on your credit report.

“Consumers can report incorrect or missing information themselves, without the cost of hiring a company that promises to repair your credit,” Calcagni noted. “Be dubious of any company that claims it can erase bad credit information from your history.”

The Division of Consumer Affairs in October 2008 filed suit against a Lakewood-based credit repair and credit counseling firm, United Credit Adjusters, alleging that it failed to provide the promised services after clients made required payments in advance. The Division also alleged that contrary to the company’s representations and advertisements, consumers’ credit scores were not raised nor was negative information eliminated from credit reports.

The two officers of United Credit Adjusters were permanently barred from doing credit counseling, credit repair, debt adjuster and bankruptcy work in New Jersey, under the terms of the Final Consent Judgment entered in 2009.

“We will investigate any and all complaints about alleged fraud committed by companies that promise to repair consumers’ credit ratings,” Calcagni said.

@GetOutOfDebtGuy

Credit Repair Operation Barred By Court From Collecting Up-Front Fees

Steve Rhode — Fri, 29 Oct 2010 15:56:48 +0000

From How to Get Out of Debt

A credit repair operation has agreed to stop making false claims and stop charging up-front fees under a settlement with the Federal Trade Commission. The settlement is part of an ongoing crackdown on scams that target financially strapped consumers, taking hundreds of dollars of fees to purportedly remove negative information from consumers’ credit reports even if the information is accurate and timely. The FTC filed the action in “Operation Clean Sweep” in October 2008.

According to the FTC’s complaint, James R. Dooley and his company, Nationwide Credit Services, Inc., falsely claimed that bankruptcies, judgments, slow pay history, repossessions, and collection accounts could be “legally erased” from consumers’ credit reports. The defendants allegedly charged up to $150 in advance and debited a monthly fee from some consumers’ bank accounts. The defendants rarely, if ever, delivered the promised results, and in many instances took consumers’ money without providing any services. Consumers often found their cancellation requests ignored, and their refund requests were almost always denied, the FTC complaint alleged.

The settlement order bars the defendants from making misrepresentations about any good or service, such as the ability to improve a consumer’s creditworthiness or remove negative information from their reports. It also prohibits them from charging money up-front for credit repair services, and from collecting payments from consumers who purchased their services before October 20, 2008, when the court froze the defendants’ assets. The order further bars the defendants from disclosing or benefitting from customer information, and from failing to properly dispose of customer information.

The settlement order imposes a judgment of more than $1.3 million that will be suspended once the defendants have surrendered funds frozen by the court. The full judgment will become due immediately if they are found to have misrepresented their financial condition.

The stipulated final judgment is here.

@GetOutOfDebtGuy

Credit Repair Scams on the Rise

Steve Rhode — Thu, 16 Sep 2010 21:58:27 +0000

From How to Get Out of Debt

A recent article by Kenneth Harney of the Washington Post pointed out an observation I’ve had as well, credit repair scams are on the rise.

These scams make believe believe that for a fee, bankruptcies, judgments, law suits, collection activity, or other derogatory items can be removed from a consumer credit report. That is simply not true.

One such company that is alleged to have made such claims is Clean Credit Report Services Inc. of North Miami, Florida.

In national radio advertisements, plus Internet and TV pitches, Clean Credit said it could make records of “late payments, collection accounts, charge-offs, repossessions and bankruptcies” simply disappear from credit files, according to the FTC’s complaint.

The firm used testimonials from people identified as clients to help convince other potential customers that the claims were for real. The FTC cited a testimonial from one woman who said that she needed a minimum 600 credit score to obtain a loan but had only a 480 when she contacted Clean Credit. – Source

Here is an example of an advertisement for credit repair services.

After watching the advertisement you can see how people that have lived through a bad financial event might feel compelled to pay a credit repair service money to clean up their credit report. But there are two big problems with that strategy.

Let’s say someone used some trickery to get a negative item removed from a credit report. If they then went and used that credit report to apply for credit they have committed credit fraud.
Just because an item has been removed from a credit report with some trick, it will most likely appear again in the future the next time the creditor dumps their database to the credit bureaus.

Save your money. Avoid credit repair.

If you want to increase your credit the best approach is to resolve any open accounts that have not been paid and then to focus on making sure your credit reports list accurate information. That inform may contain negative information but it should list accounts you actually had. My opinion is that a consolidated credit report is the fastest and easiest way to compare all three credit bureaus reports.

Once you do that and notify the credit bureaus of information that is not true then rebuilding your credit is an easy process you can do yourself. Use this guide as example of how to do that.

@GetOutOfDebtGuy

We Would Like to Purchase a Home in California. How Do We Cleanup Our Credit? – Charlene

Steve Rhode — Fri, 10 Sep 2010 22:39:48 +0000

From How to Get Out of Debt

***

“Dear Steve,

My husband a I were married 3 years ago following Hurricane Katrina.

Although we never had 700 credit scores, we did have scores in the 600 range. Well, after the storm and being forced to relocate across the country to California I got pregnant and lost my job, which meant that we were forced to file bankruptcy.

So there is no need to say that our credit score dropped drastically. We would like to purchace a house now that our financial situation is better. However, there are some disputes and unfair things on our reports bringing our scores down. What can we do?

Charlene”

The Answer:

Dear Charlene,

Thank you for your question.

It must have been a stressful experience to be dislocated by Katrinia and land in a strange and new place.

I have to say, buying a home in California, depending on where you live, can be a bigger challenge than buying a home in Louisiana. Between the cost of housing in California and the rapid decline in values, I’m not so sure I’d be in a rush to buy right now.

It is a relatively straightforward matter to cleanup your credit report. See “I Would Like to Clear Up My Credit A.S.A.P. – Ginger” for details on how to do this.

Big Hug!

@GetOutOfDebtGuy

Is Debt Included in Bankruptcy Removed From My Credit Report? – Dave

Steve Rhode — Mon, 06 Sep 2010 16:58:38 +0000

From How to Get Out of Debt

“Dear Steve,

I have most unsecured credit card debt from major banks. Approximately $70,000.

If one does file Chapter 7 bankruptcy, would that immediately remove all past due accounts, defaulted accounts, accounts in collection, etc. from my credit report?

I know that normally negative credit items usually remain on one’s credit reports for up to 7 years.

BUT if they were discharged through bankruptcy, would that mean they would ALSO be removed immediately from my credit reports ?

Thanks,

Dave”

The Answer:

Dear Dave,

No. Your past history would continue to be reported for seven years from the date each account was first reported delinquent.

However it is a relatively easy matter of rebuilding your credit following bankruptcy, Read this guide.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Want Debts I Paid Off Removed From My Credit Report. – Karen

Steve Rhode — Tue, 17 Aug 2010 22:19:03 +0000

From How to Get Out of Debt

“Dear Steve,

I have a few debts that went to collection, but have been paid off. Now my credit is bad and i want to clear it up FAST! What can I do?

What can I do? Is there someone who can help me contact these companies to have the items removed and my credit score raised?

Karen”

The Answer:

Dear Karen,

Yea, it doesn’t work like that. Even if you’ve paid off a delinquent debt it will remain on your credit report for seven years. Your credit report is like a report card. It reports your good and bad grades.

Just because you got a D in a class in school it does not get removed from your report card. Your credit report works the same way.

The best way to bring your credit back up at this point is to follow this guide to rebuild it.

You can find people that will sell you credit repair services but they are a scam, will take your money, and there is no guarantee the debt won’t be reported again in a few months.

Besides, using a credit report to apply for credit where a factual but negative item was removed is credit fraud. Don’t focus on the bad grades. Follow my guide and get some new good grades to bring your score up.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Upfront Fee Credit Repair Companies Sued by MA AG

Steve Rhode — Sat, 24 Jul 2010 15:22:23 +0000

From How to Get Out of Debt

BOSTON – Attorney General Martha Coakley’s Office has filed a lawsuit against two individuals who charged illegal upfront fees and allegedly made false promises to fix Massachusetts consumers’ credit reports through their credit repair businesses. The individuals operate under the business names of Credit Score Rebuilders and Integrity Credit Restoration.

The lawsuit, filed last week against Reilly Silvia of West Barnstable and Bonnie Souza of Norton, alleges that since January 2008, the pair advertised services purporting to improve consumers’ credit reports and credit scores by removing or correcting negative information on the consumers’ credit report. Souza and Silvia conducted their operations under the business names of Credit Score Rebuilders and Integrity Credit Restoration. The pair also allegedly unlawfully charged fees prior to performing the credit repair services they promised, failed to include legally required information in the written materials and contracts provided to consumers in violation of state and federal law governing credit repair services, and made false statements to the credit bureaus in relation to consumers’ credit histories.

“It is becoming an all too common practice for individuals and businesses to try and profit off of consumers in economically vulnerable situations,” said Attorney General Martha Coakley. “In many instances, consumers turn to these businesses to try to save their homes and their credit, and instead they end up in even worse financial straits by paying for services that are not delivered.”
The Attorney General’s Office is seeking a preliminary injunction prohibiting Silvia and Souza from continuing these practices and from destroying any records or transferring assets. A hearing for a preliminary injunction has been scheduled for July 28th at 2:00 p.m. in Suffolk Superior Court.

The Attorney General’s Office today also issued a consumer advisory cautioning consumers to do their homework when choosing a credit repair company. The advisory offers advice on dealing with these types of businesses and offers tips on what to do if you find yourself in debt. Visit the Attorney General’s website to view the advisory.

In June, the Attorney General’s Office settled similar allegations with Trinity Credit Services and its owner, Angela Reston. Under the settlement agreement, Reston and her companies are prohibited from offering credit repair services in Massachusetts. Those defendants are also required to pay $25,000, which will be allocated to the Attorney General’s Local Consumer Program, a statewide network of local consumer assistance organizations that offer information and assistance in resolving consumer complaints.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Credit Repair Boss Steals Nearly a Million Dollars from Best Buy

Steve Rhode — Mon, 14 Jun 2010 12:30:52 +0000

From How to Get Out of Debt

In 2006, Joseph A. Graziola, III was charged by the Federal Trade Commission for his fraudulent credit repair activities under his company Bad Credit B Gone. This case ended with a $322,047 judgment against Graziola.

Bad Debt B Gone was nailed for making the same old stupid and fraudulent promises of removing accurate but negative items from credit reports. This pitch even included assurances that attorneys would be involved in removing bad credit.

“And the attorneys, they do remove charge-offs, collections, tax liens, bankruptcies, repossessions, student loans, child support, late payments, judgments – all of that.” – Source

Now that stuff is all old news but just to show you how a scammer can always be a scammer, Graziola just pled guilty to stealing $900,000 from Best Buy by submitting false invoices for payment. The invoices were for equipment never sent to Best Buy and this activity occurred at the same time Graziola was running his illegal credit repair operation.

What is different about his guilty verdict this time is that Graziola is facing up to 20 years in prison for his crimes.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Lauren is Searching For Ways to Get Out Of Debt And Make Her Bad Credit Go Away

Steve Rhode — Mon, 17 May 2010 07:36:02 +0000

From How to Get Out of Debt

“Dear Steve,

If I find a consolidation company to help me pay my bills will my bad credit go away?

Lauren”

The Answer:

Dear Lauren,

It is usual for people to search for a magic wand that will make their debt go away without impacting their credit report. There really is no such solution, and here’s why.

In order to help keep your credit report and credit score looking good you need to pay your debts as agreed. That means that you need to pay your debts in full or make at least the minimum payment that you contractually agreed to. Any repayment plan outside of that has consequences.

Typically by the time people come to realize they are in financial trouble they are either very maxed out or they’ve been late or missed a payment or two. Those events tend to be the cold water thrown in the face of the person in denial.

By the time those events happen, your credit report and credit score have already taken a hit. So many people go to credit counseling and latter say they were not behind before they went into a debt management program and the reality is, they were but did not remember it.

Eliminating debt and improving your credit score are two different goals. It is a bit like saying that you’d like to set a new land speed record and go scuba diving at the same time. Good goals but not necessarily requiring the same focus or tools.

To get out of debt and avoid bankruptcy you need to come up with a plan that you can sustain over the long course of paying down your debt. Typically this means that you’ll have to make monthly payments but they will be smaller than what the creditor wants. If you could afford the full payment you would not be looking for help, would you? These reduced payments will appear on your credit report and lower your credit score.

If your goal was to repair your credit and make your credit score and credit report look good, it is actually fairly easy to do but you have to at least pay your bills on time, without delay, without reduction and without exception.

When facing difficult debt it would be smarter and wiser to focus on a two stage process. First, seek out the best solution to address your debt. That might be debt management, debt settlement, bankruptcy, a second job, better budgeting, etc. And then once the debt is under control we can rebuild the credit latter.

Let’s plug the hole in the dam first and then we’ll repair it.

Big Hug!

@GetOutOfDebtGuy

The Answer:

How Do I Go About Getting My Credit Score Back Up? – CH

Steve Rhode — Sat, 24 Apr 2010 01:41:19 +0000

From How to Get Out of Debt

“Dear Steve,

I have a bad credit score from some late pays on my home from a couple of years ago and one report said that one was a missed payment? Also there is a no pay on one other collection. Since than I have a good paying job and I can’t get a loan.

I need to know how to get my credit score back up. I don’t have any credit cards and all I have is a house payment. Does getting credit cards help? If not what do I need to do. Thank you.

CH”

The Answer:

Dear CH,

Rebuilding your credit is a fairly simply process. All you need to do is plant some action and water it with a little time.

Want Better Credit? Do This!

Get a copy of your consolidated credit report. This credit report is the one I use myself. A consolidated one is easier to read and allows you to quickly compare what each of the credit bureaus are saying about you. They all have different information about you.
Be sure to order your credit score with your report. It will show you what each of the three bureaus is reporting about you. None of the scores will match. When I pulled my credit report the other day my credit scores were 20 apart. When you order the score, the consolidated credit report will tell you exactly why your score is what it is and what you can do to improve it. So simple.
If you find items on your credit report that are not reported accurately then you can dispute those items online with two of the credit bureaus. The third you’ll have to write in and point out the incorrect information.
The credit bureaus will seek to check the information with the original creditor or just remove the disputed item.
If you have any open and outstanding collection accounts showing, pay them off.
Now that you’ve cleaned up the foundation, let’s start to build some good credit. To do this you’ll have to get some new credit, a credit card or two. Use the card responsibly and let them report your on-time payments to the credit bureaus. After six months you’ll notice that your score will start to climb nicely.

Big Hug!

@GetOutOfDebtGuy

Legally Change Your Name But Not Your Social Security Number to Get Good Credit

Steve Rhode — Thu, 15 Apr 2010 21:24:47 +0000

From How to Get Out of Debt

Here is a new trick that is totally not worth the $3,999 that’s being charged, let alone $39, in my opinion. This company that is promoting you can have a good credit score by legally changing your name but keeping your old social security number.

Now from the advertisement above it sounds miraculous. But how about this statement, “Only use your new legal name when obtaining new credit, other than that use you original name as you always have.”

Once you go to the site AliasCreditFiles.com you will see that the site says “Brand new legal name change filed by our staff on your behalf. Brand new credit file created by our staff using your new legal name and your original social security #.” – Source

So if your new name is connected to your old credit through your social security number, why is changing your name helpful? Besides, if you are asked if you have ever had a judgment, sued, gone bankrupt, etc., what are you going to say with your new name? No? That’s like saying I just got married so my credit life starts all over. That’s not how life works.

Watch the video from their site.

BTW, contract is not linked on pricing page as video says.

I’m also curious how they get around advertising their services as attorney assisted name change profiles. If they are collecting a fee for service and paying part of that to the attorney they are fee sharing and that’s a no-no.

I also found it interesting they say: – Source

DO NOT- Apply or extend credit with a creditor if your current account is NOT in good standing, this will merge your files!
DO NOT- Open a new checking or savings accounts with anyone you have done business with in the past!
DO NOT- use any prior credit references on any new credit application
DO NOT- record or reference prior addresses, phone numbers, vehicles, etc., on new credit application
DO NOT- put your Spouse on any applications
DO NOT- use personal checks from your bank accounts to pay creditors who are in your new file! Some businesses keep records of your checks and could create a link to your current file.
DO NOT- give anyone your Social Security Number whom you have any contact with in the past who could link you with your old file
DO NOT- give your new credit file information to services like lawn care services, garbage collectors and in particular, insurance agents and insurance co.

So wouldn’t it just be so much easier and $4,000 cheaper to deal with whatever it is that is bringing your current credit score and credit report down rather than having to get a new address and telephone number, never mention any of your past good credit, not apply for credit with your spouse, and don’t give your social security number out?

This approach seems like a lot of hiding and deception from the reality that you are who you are. The problem is not your identity or name, the problem is the lingering bad credit you might have.

Oh, I almost forgot to include the additional DO points from their site:

DO -Say that you RENT on all applications!
DO – Use your SSN, original Name and address when dealing with Doctors, Dentist, Hospitals and etc., just as you always have
DO – Say that you have lived at your new address for the last 7 years, this eliminates providing an additional address, and shows stability
DO – Keep your original Drivers license

So if you spend the $4,000 for this product you have to lie where you’ve lived, what your address is, the cost of maintaining a new address and phone number and lie that you rent when you might not? Does that sound like a legit solution to you? Not me. besides, wouldn’t it just get exhausting trying to keep track of who you lied to and when you use the new name or not?

@GetOutOfDebtGuy

Debt Settlement Company, Debt Negotiations Associates, Credit Repair Company, and Attorney to Settle FTC Charges

Steve Rhode — Thu, 18 Mar 2010 15:47:16 +0000

From How to Get Out of Debt

A promoter of credit repair and debt relief services has agreed to settle Federal Trade Commission charges that he deceived consumers into paying thousands of dollars based on false promises that he could help solve their credit and debt problems with debt settlement and credit repair services.

According to the FTC, the promoter falsely told consumers he could improve their credit reports by removing negative information such as judgments, foreclosures, tax liens, bankruptcies, repossessions, and child support delinquencies, from the reports regardless of how old or accurate the information is. The FTC’s complaint also alleged that he and his lawyer falsely told consumer reporting agencies, as a reason to dispute negative items, that consumers were identity theft victims.

The FTC complaint charged that the marketer, Sam Tarad Sky, and his companies illegally charged consumers up to $2,199 before performing any services and failed to tell customers they could cancel the contract within three business days.

He also falsely told consumers who bought debt settlement services that they could satisfy their debt by paying much less than the full amount owed, such as 30 cents on the dollar.

The proposed settlement order against Sky and his companies bars them from deceiving consumers about any credit repair or financial good or service, and requires them to back up any debt relief claims they make, inform consumers that they have a right to cancel, and tell past clients how to have their escrowed funds returned from NoteWorld.

The order against Sky’s attorney, Kurt A. Streyffeler, and Streyffeler’s law firm, Kurt A. Streyffeler, P.A., bar them from misrepresenting any credit repair or financial good or service, and from violating the Credit Repair Organizations Act. All of the defendants are barred from selling or otherwise disclosing customer information.

The orders impose judgments of almost $2.5 million against Sky, Credit Restoration Brokers LLC, and Debt Negotiations Associates LLC, and $100,000 against Streyffeler and his law firm. The judgments will be suspended because of their inability to pay. The full judgments will become due immediately if they are found to have misrepresented their financial condition.

The Commission vote to authorize the complaint and stipulated final orders for filing was 4-0. The documents were filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division.

Legally Remove Negative Information on Your Credit Report

Steve Rhode — Mon, 15 Mar 2010 14:31:01 +0000

From How to Get Out of Debt

Well it has happened again. Yet another credit repair organization has fallen under the sledgehammer known as the Federal Trade Commission and you know what, rightfully so, idiot scammers.

Wishful consumers desperate for a quick fix to hide accurate but negative items on their credit report are easy prey for credit repair scammers looking to make a quick illegal buck.

I am no longer surprised by the number of people who continue to sell credit repair services to consumers and think it is okay or they can get away with it. New people spring up every day even years after the Credit Repair Organizations Act passed. Here is but the latest.

From the Federal Trade Commission:

A credit repair company that falsely claimed it would help boost consumers’ credit ratings will settle Federal Trade Commission charges filed last year as part of “Operation Clean Sweep,” a federal-state crackdown on credit repair scams.

The FTC charged the Chicago-based defendants with falsely promising to remove negative information from consumers’ credit reports, even if it was accurate and current, in violation of the FTC Act and the Credit Repair Organizations Act. They also allegedly violated federal law by requiring payment before any service was provided to consumers. According to the FTC’s complaint, the defendants’ advertising stated, “We would never charge a large fee up front, or make you wait a long period of time to refund your money if we do not get results. You WILL see results in 60 days, or your money will be refunded in full . . . .” They charged $495 per person and $665 for a couple and required $219 or $269, respectively, in advance.

The settlement order bars the defendants from further violations and from misrepresenting:

They can improve consumers’ credit reports by permanently removing negative information, even when it’s accurate and current;
They can otherwise improve a consumer’s credit report or ability to obtain credit;
The full cost of their services and any restrictions on consumers’ use of those services;
Their refund or cancellation policy; or
The benefits of using their goods or services.

The order imposes a $226,793.90 judgment that will be suspended once they pay $20,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. The order prohibits the defendants from collecting any payments from consumers who purchased their services before October 23, 2008, when the court halted their business practices and froze their assets. The order further bars them from
disclosing or benefitting from customer information, and failing to properly dispose of customer
information.

The defendants are Advantage Credit Repair LLC and Mark D. Solomon. The Commission vote to authorize staff to file the stipulated final order was 4-0. The proposed order was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

The Commission appreciates the assistance of the Better Business Bureau of Chicago & Northern Illinois in this case.

You can read the complaint and judgment here.

@GetOutOfDebtGuy

What’s The Best Way to Clear Up My Credit? – James

Steve Rhode — Thu, 11 Mar 2010 17:38:05 +0000

From How to Get Out of Debt

“Dear Steve,

I’m trying to pay off debts but they appear to keep poping up.

Steve, what is the best way to clear up your credit and score is to pay off every delinquent debt you have or to pay off one of these so called attorneys to contest the debt and see what happens?

James”

The Answer:

Dear James,

The types of credit repair scams you mention are under investigation by a number of agencies.

If you have a delinquent debt you owe the best thing to do is pay it off and once all the old negative debts are satisfied you can concentrate on rebuilding your credit easily with new good credit. If you have some open credit card accounts they can help you do this is you concentrate on paying your bills on time and letting some time pass.

The credit repair scam that most try to sell is the dispute the debt approach. The debt comes back on latter when the creditor dumps the information back to the credit bureaus again. The only reason the debt may have been removed initially was because the credit bureau did not get it investigated quickly enough but it will come back.

My advice is to deal with it properly and then you don’t have to keep looking over your shoulder waiting for it to appear again, and it will.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

We Are Looking Forward to Buying Our First Home But Our Credit Sucks. – Casey

Steve Rhode — Sat, 06 Mar 2010 19:09:21 +0000

From How to Get Out of Debt

Casey

“Dear Steve,

My husband and i are looking forward to buying our first home next summer. So right now we are in the process of getting are credit reports to see what would affect are interest rates and loan amt so we can pay those particular items off faster than the other not as important ones.

I pulled my credit and i dont have any credit card debt but i do have an eviction and a repo and some old medical bills on there from like 4-5 years ago. My husband on the other hand is paying on his car right now which he does pay on time for his car note he is also paying on his student loans but he also has a lot of old credit card on his report from approx 4-5 that are now chargeoff.

We would like to know what type of debt would the lender be looking for that would make us ineligible and also how much of loan can we afford without living paycheck to paycheck and also is there any program that can assit/teach us on what we need to do and payoff to get our first home?

Casey”

The Answer:

Dear Casey,

The good news is that there are things you can do to build your credit up.

When looking at credit I always start by getting a consolidated credit report with the credit score option. Use this consolidated credit report link, it’s the same one I use. in fact I just looked at my credit report a few minutes ago.

It is important that you order the credit score option when you get the report. Your credit score will be different with each of the three major credit bureaus since each uses a different formula. But the real bonus of ordering the credit score is that it will tell you exactly what is dragging your score down.

In your case I think you’ll find that the old negative items are a lead weight around your credit neck. And it doesn’t sound like you have any current credit cards that you pay on a timely basis to help increase your score.

The consolidated credit report will give you the contact information of the creditors that are reporting the old negative information about you.

The chargeoffs can be handled by paying them off but the biggest concern is the car repo. I would imagine that might be a big debt owed.

It is pointless to pay anyone for credit repair. Even if one of the old negative items was removed from your credit report it can simply reappear. And if you then used the clean credit report to apply for credit, you would be committing credit fraud.

Those negative items will drop off your consumer credit report seven years and six months from the date they were first reported. But just because they will no longer be listed does not mean that they are no longer collectible.

I would suggest that you find a local mortgage broker to work with on your future mortgage. You’ll need to understand what loans might be available for you with your credit history and you should ask them if you need to take care of paying that repo off first or the credit cards.

Let me know what the mortgage broker says.

Big Hug!

@GetOutOfDebtGuy

What’s Your Advice About Using Novation for Debt Elimination? – Melissa

Steve Rhode — Mon, 22 Feb 2010 15:23:28 +0000

From How to Get Out of Debt

“Hello Steve,

I’m doing some research on paying of debt and I came across your website. I’m hoping you can give me some sound advice.

I am 31 years old, single with $19K in unsecured credit card debt. I’m sure my story is just as sob as anyone elses, so I won’t bother sharing it. The bottom line is that I have finally decided to get my head out of the sand and pay off my credit card debt once and for all.

Aside from running up my cards in the first place, I’ve tried to be responsible in handling them as far as making the payments, etc. I have all my cards on autopay, and pay at least the minimum payment, on time, every month. My credit score currently is near 700 (698 from one reporting agency, 699 from another). Yet, regardless of the fact that I make the payments and am not in default on any account, I recently got a letter from one of my creditors (Citibank) saying that they are raising my interest rate to 29.99%. And I’m just left with the feelings of, “How and why would they do this to someone who is in good standing?” and, “How am I ever going to get out from under this?”

I have a personal friend who runs a successful credit score restoration business in the town where I live. She helps people with bad credit reports clean them up a little so they can get home loans, etc. I went to her for suggestions on how to proceed and she told me about a woman she recently met. She met this woman at a conference, and she runs a credit elimination business. My friend has decided to partner with this woman because she feels that a lot of her clients can use a service like this and is suggesting that I go to this woman to have my $19K eliminated, and swears that she is legit.

The process is what I’ve found to be called “novation”…I’m sure you obviously know about this already, but here is what they do:

—They have your debt assigned to them so they are “on the dotted line with you”.
—They then send in a minimum payment (for the regular minimum payment amount, in my case about $200 each) to the creditor with a letter offering new terms and if the creditor cashes the check, then they agree to the new terms. The new terms are that they cannot charge you any interest, the minimum payment is now $10, they can’t put any negatives on your credit report and if they ever have, they need to take them off.
—Since the creditor will (presumably) act as if they’re under the old contract, they send the next statement with a minimum payment higher than $10 and interest charged, maybe a late fee. They’ve now broken the new contract at least 3 times. So the processing company applies a financial penalty of anywhere from $500 to $2500 for each term violation, and continues to do so month after month until the financial penalties offset the debt. (Which they claim is the same thing as the creditor charging you a late fee…you’re paying a financial penalty for breaking the contract.)
—The processing company says that they will deal with all of the collection calls and letters as well as any threats of a lawsuit, as the creditor “has no legal leg to stand on”.

It sounds too good to be true, but also to someone who isn’t a lawyer, it sounds plausible. I decided to do some research online and I’ve found a few articles that claim this is a scam, and also some articles that rebutt those scam claims with long lists of reasons why it does work.

For example, this article here by Gerri Detweiler.
And this rebuttal here.

I don’t know who to believe. Do you have any advice on the novation debt elimination programs?

Thanks,

Melissa”

The Answer:

Dear Melissa,

It’s all a f*^#ing scam, all of it, including the “credit restoration.”

You sound like a really nice person that is trying to do the right things, but these shortcuts will only lead to problems and may even be flatly illegal.

The contract substitution scam, also known as the novation scam sucks in a lot of victims. Click here to read more about novation.

The rebuttal article is double-speak and misinformation. It’s a good example of something that has enough truth in it to seem plausible but then, it’s not.

Here is the bottom line, you can’t unilaterally modify a contract, you can’t assign a debt that is not contractually assignable, and you can’t break a contract which is not mutually agreed to.

If you decide to pursue this debt assignment scam, you’ll lose a lot of money in the process and you’ll wind up being sued by your creditors for non-payment.

As far as the credit restoration goes, any person that uses a credit report where accurate but negative information has been removed is committing credit fraud and debt obtained fraudulently may not be discharged with bankruptcy if that person gets into trouble. Any business that charges a fee to alter an accurate credit report to reflect an alternative credit history is in violation of the Credit Repair Organizations Act.

If you are looking for a short cut out of debt, you can do it yourself for very little money and no risk. Just get a copy of your consolidated credit report. If you have any incorrect items in your three bureau credit report you can dispute the items using the information contained in your consolidated credit report.

If you have any old open items you owe, pay them and if you don’t have current credit that you are using responsibly, get a major credit card and use it responsibly so current good credit is being reported about you and that will increase your credit score.

As far as your statement, “How and why would they do this to someone who is in good standing?”, referring to Citibank increasing your interest rate, the answer is simple, because they can. The irony here is that you agreed to it, all cardholders did. The cardholder agreement which both you and Citibank mutually agreed to gave them permission to change the rate. The real issue is not the interest rate, it’s the balance. As long as you are carrying a balance you will be charged interest if your interest rate is more than 0%. A card with a 29.99% rate, but where the balance is paid in full by the due date, is charged $0.

Save your money you’d pay to invest in these tricks and instead use it to pay down your debt.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Can a JAG Lawyer Help Me Clean Up My Credit Report? – Nathan

Steve Rhode — Fri, 12 Feb 2010 19:00:50 +0000

From How to Get Out of Debt

“Dear Steve,

I have multiple accounts on my credit that are in outstanding order. However, I also have 4 derogatory accounts that have brought my credit down quite considerably.

Since a civilian lawyer can help by sending letters to credit companies and the business itself to dispute or investigate further (for usually a large fee), can JAG do the same for the Soldier so they do not have to spend a ton of money?

Nathan”

The Answer:

Dear Nathan,

Those credit repair techniques you mention are basically B.S. While a disputed account may be able to be removed temporarily, the moment the creditor reports to the bureaus again it will get dumped right back. Additionally, using a falsified credit report to apply for future credit is a crime.

You are much better off to actually pay the outstanding items you owe and show the accounts as paid, than engage in attempted trickery.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Paid “The Credit Card Solution” and Bob Lindsey to Eliminate My Debt. Turns Out They Were a Scam. – Walter

Steve Rhode — Fri, 05 Feb 2010 22:42:25 +0000

From How to Get Out of Debt

“Dear Steve,

My name is Walter and I’m currently a senior psychology major at [XXXX] College. I have amassed over $10,000 in credit card debt from buying everything from a computer, Playstation 3, and even a High Def Television. As you can see, I really didn’t need any of the things that I bought and it has been really tough trying to pay off these bills and finish school.

In a normal day for me I have like 5 or 6 different creditors call and harass me about paying my debts. I tried a company that said they can legally erase my debt called “The Credit Card Solution” and I just found out that this company was a scam and I have already paid out over $3,500 to them. Likewise, I’m about to graduate this year and I have no idea what my next move should be.

What is the best solution to get out of debt. Also, is debt settlement or debt consolidation and what is top rated program out there.

Walter”

The Answer:

Dear Walter,

So sorry to hear that you were yet another victim of “The Credit Card Solution” that was run out of Texas. “The Credit Card Solution” promised that it was a solution for people that wanted to:

Stop making payments immediately
Restore their credit – Fico score above 750
Invalidate their unsecured debt in 12 months
Stop harassing phone calls TODAY
Increase their monthly cash flow
Protect their assets
Avoid Bankruptcy
Become financially free

None of those statements were true. In fact, TCCS and Bob Lindsey enjoyed the attention of the Texas Attorney General and managed to land himself in big trouble.

Texas Attorney General Greg Abbott, on July 9, 2009, charged a Houston-based credit repair firm with violating the Texas Deceptive Trade Practices Act. The state’s enforcement action names Jubilee Financial Solutions LP, also known as The Credit Card Solution (TCCS) – a self-proclaimed “debt invalidation” business – its parent company, Jubilee Financial Management LLC, and the companies’ owner, Robert Mitchell Lindsey.

Court documents filed by the attorney general requested an asset freeze, which was granted by a Harris County district judge. The state sought the asset freeze because investigators believe the defendants are improperly withholding $500,000 in customers’ payments that should have been applied to debt relief services.

Through various Web sites – including www.thecreditcardsolution.com – the defendants claimed they could eliminate credit card and other debts by helping customers fight credit reporting agencies, dispute debts and sue debt collectors. The defendants also promised access to legal services, which they claimed could yield monetary damages from lawsuits against debt collectors.

Marketing materials obtained by state investigators shows the defendants claimed their “debt invalidation” program can eliminate customers’ debt in as little as 12 to 18 months by relying upon federal consumer protection laws. In videos on the defendants’ Web site, Lindsey claims that TCCS has “gotten rid of $150 million of credit card debt.”

According to the state’s enforcement action, the defendants are unlawfully operating an unregistered credit services organization (CSO). Under the Texas Credit Services Organization Act, CSOs must register with the Secretary of State and obtain a surety bond or surety account. The defendants have done neither.

TCCS also offers an Affiliate Information Package online, which gives interested individuals the opportunity to market and sell the defendants’ services. However, court documents filed by the state indicate the defendants’ affiliate program is subject to the Texas Business Opportunity Act, which requires vendors to register with the Secretary of State and obtain surety bonds or surety accounts. The state’s enforcement action charges TCCS with failing to comply with those requirements.

The state’s enforcement action also charges the defendants with multiple Texas Deceptive Trade Practices Act (DTPA) violations, including not providing services as advertised and withholding information about goods or services when entering into a transaction.

Click here to see the actual suit filed.

The Credit Card Solution operated a tantalizing scam that easily draws people in. It made claims and promises that were unfounded but sounded plausible.

The sales pitch was:

With the exception of the government, no other entity which enters anything on your credit reports does it in the legally prescribed manner. Therefore, they are not in compliance and can be challenged. If you, as a consumer, have tried to have a negative entry removed from your credit reports, or even paid a company to attempt to do it for you, then you know how incredibly frustrating it can be. The CRA’s (Credit Reporting Agencies) are required, by law, to remove any non-compliant entries, although they typically ignore consumer requests to do so. The Credit Card Solution challenges their violations on your behalf. When they ignore the law on more than one occasion, they have created a pattern of non-compliance with federal law. The Credit Card Solution can then give them a choice of a lawsuit or the option of facing a compliance audit/validation review. Either way, they eventually comply with the law and remove the non-compliant items from your credit reports. Watch the video on Credit Restoration for a full explanation of this part of our process.

The Credit Card Solution can also challenges the validity of unsecured debt at a financial institution. A look at the General Ledger of a bank that you supposedly owe, say, $20,000 on an unsecured debt, such as a credit card account, shows that you owe the bank nothing and you owe yourself the $20,000 according to their bookkeeping system. Therefore, that bank can be advised that the debt is not valid whether that debt is still at the bank or has been charged off. The proprietary process that The Credit Card Solution uses is successful in having the bank invalidate the debt. That debt no longer exists. If there is hesitation, the compliance audit/validation review process can, again, be used. Watch the video on Debt Invalidation for a full explanation of this part of the process.

If that bank has charged off your account and sold it to a collection firm, usually an attorney collection firm, that firm can now be notified that they are trying to collect on an invalid debt and must stop immediately or face legal consequences themselves. If that firm has proceeded with court action against you, and you are still pre-judgment, time permitting, The Credit Card Solution can file a federal court FDCPA 1692 lawsuit against the collection attorney(s). The Fair Debt Collection Practices Act is an extremely strong deterrent because in 99% of all cases, the attorneys/debt collectors are in violation of many parts of it. The court can be notified that the attorney collectors are being sued in federal court and a stay is requested. The attorneys/debt collectors typically settle out of court. Watch the videos on the Fair Debt Collection Practices Act for a full explanation of this part of the process.

The Credit Card Solution program has Federally licensed counsel and paralegals. We are affiliated with nationwide network of attorneys who are specialists in this area of the law. You will be represented throughout the process. When an out of court settlement is reached by our counsel on your behalf, you collect monetary damages, the collection attorney will be required to dismiss any court action against you, remove any entries they may have made on your credit report, give back anything taken, remove all liens and garnishments, and destroy the debt.

This entire process normally takes an average of 12 to 18 months. At the end of the process, your credit reports will reflect no negative entries and you will have no unsecured debts since they will have been proven to be invalid. If The Credit Card Solution decides to employ the compliance audit/validation review process on your behalf, near the end of this process, you will receive a Grievance Report form allowing you to relate any bad behavior by any attorney or judge involved in any proceeding against you. The Federal Government has the authority to impose fines, penalties, sanctions, and even damages against any party they think warrants any such action based on their behavior. They might take as long as two months to complete this process. Each compliance violation can result in as much as a $2,500 fine. The judge can face the same situation. The The Credit Card Solution proprietary process has been successful to the point that the FTC process is rarely employed. It is always there if necessary and is a process that most people in violation of federal law do not want to face.

While all of that sounds like something you might want to jump at, it was really nothing more than a ploy to rope consumers in to pay large up-front fees to get NOTHING!

In fact TCCS was never anything more than a marketing arm of Robert Lock and the Credit Collections Defense Network (CCDN).

Anyway, so where does all that leave you Walter? Lighter in the pocket but still in debt. The sad part is that if you have used the $3,500 towards paying off your debt you would have been further ahead than where you are right now.

Your next move should be to graduate, get a job, and start repaying what you owe. If you have $300 or so each month you can use for debt repayment now then contact a debt management or credit counseling group and get on a payment plan.

However I suspect that you don’t have those funds available each month or you would have already made payment arrangements.

If you find it is not possible for you to wait to graduate and earn money to repay your debts, then go talk to a local bankruptcy attorney and if you need to raise money to pay for bankruptcy, sell your electronics to do it.

Bottom line, you tried to take a gentle shortcut with TCCS to get out of debt. You got burned. There are no gentle solutions out of debt. Debt settlement is going to be another pit if you try that route. You are going to have to suck it up and work your way out of this or go bankrupt.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Would Like to Clear Up My Credit A.S.A.P. – Ginger

Steve Rhode — Fri, 05 Feb 2010 22:05:44 +0000

From How to Get Out of Debt

Ginger

“Dear Steve,

I have had Identity theft happen to me and I have also messed up my credit. I want to move in July 2009. I would like to clear up my credit a.s.a.p.

What are the best solutions to clearing up my credit?

Ginger”

The Answer:

Dear Ginger,

Clearing up your credit is a rather simple affair that you can easily do yourself.

Order a copy of your consolidated credit report online and get the credit score option. Use this consolidated credit report, it’s the one I use myself.
Once you download your report, print it out. The report will show which credit bureaus are showing negative information for each account.
Using the credit bureau contact information in the consolidated credit report, contact each bureau and tell them what information on your report is incorrect.
The credit score will clearly tell you what you need to do to increase your credit score.
If you find open but delinquent accounts on your credit report you can use the contact information for each creditor provided in the consolidated credit report to contact those creditors and make arrangements to pay off that old debt.

That’s it! See, it is pretty easy to do.

Once you’ve finished all of this, come back and I’ll show you how to rebuild and restore your credit.

Big Hug!

@GetOutOfDebtGuy

My Credit is Bad From Worn Tires on a Leased Car. – Sheryl

Steve Rhode — Thu, 14 Jan 2010 18:46:17 +0000

From How to Get Out of Debt

“Dear Steve,

I leased a car from GMAC and at the end of the lease we turned the car in and they evaulated it and decided we had too much wear on the tires, so they billed us over $700, I called and negotiated a lower price of approx $500. and paid that right away, but what I was unaware of was during the negotiations they reported the $ 700 dollars as bad debt and as a charge off.

I re-leased another car and this time I purchased new tires before turning in the car and knowing that I had went over on my miles, I knew I would have to pay them. So I agreed to pay on payment plans for the full amount. Just recently I realized these reportings when I was rejected for credit.

Gmac reported these both as a charge-off and a number 9 on my report, I could not purchase a vehicle this year or lease one because I was told I had to reposessed cars. My score showed a 635. I also had a medical bill of $135.00 that I know was paid and reported as unpaid, I had a brain tumor removed and things got messy with all the paper work, so now after going back and fourth with this medical company, I could not find my record of payment, so I apoligized, sent in a second payment, and requested mercy on the reporting and asked they remove it with no avail. Any suggestions?

How do you remove/ repair/ correct this in my favor to boost my scorces ?

Sheryl”

The Answer:

Dear Sheryl,

Just to clarify, so you were never late on the $700 payment when they first billed you for the tires on the first car? Or, did the negotiations take an extended period of time from the point you were first billed?

Do you have some proof that you paid the $135 medical bill? Maybe a check or card statement?

Ultimately dealing with these items does not require some credit repair trick but to fix the problem at the source, the creditor. If you have some proof to show the statement made is not true then you could use that evidence to support your claim and send a dispute statement to each of the credit bureaus reporting it.

Have you made a previous attempt to dispute this debt with the credit bureaus?

Please post your answers in the comments section.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Paid for Credit Repair. Was That and Trying to Do ‘Pay to Delete’ a Smart Thing to Do? – Tiffany

Steve Rhode — Sat, 02 Jan 2010 19:15:42 +0000

From How to Get Out of Debt

“Dear Steve,

ONE year ago in march I paid a credit repair person over $500.00, they were recommended by a mortgage lender I saw. He told me it would take 4 to 6 months and my score will be were I needed it to be. Totally hasn’t been the case.

I spoke with the manager of the company who knew this person directly. She was so convincing. I asked her if I should just start paying on my negative accounts. She advised me not to. That by paying old debt it would lower my score instead of increasing it. She told me her company would have these items deleted, the credit bureaus would send me a report and I fax it to her staff. I’ve done all she has told me to do. It has been nine months two of my fico scores or a little above 500 and one in the mid 500′s.

I have tried to reach the person who referred me for 2 months now he do esn’t return my calls nor my emails. I’m so sick and tired, of being sick and tired. I’ve made major mistakes in my earlier days, bad relationships and now I’m trying to make it right, I’m 33.

I met with another lender a few weeks ago and she pulled my credit when I told her the above she was upset as well. She told me that I needed to pay off these collections. She told me to contact the credit repair person and tell her that I have spoken with a credit expert that advise me her company wasn’t doing the job they said they would.

She told me that they probably wouldn’t refund my money, but let them know I know they didn’t do what they stated. I have two credit cards, one a retail store and the other major credit card both with low balances. I am in good standings and have a car loan but that will be paid off in a few months. This new lender advised me to call these collection agencies try talking with them, telling then my situation. She said to make your situation known to them but not to make them aware you’re trying to get a loan because they will know they have you. If I can’t get any where with them just hang up and send them a pay and delete letter.

She said some will agree and some not, which AFNI is the worst but I’m not giving up. She has advised me to pay them but first ask them to send me in writing that they will remove/delete upon payment or update as PAID in full. She advised me not to settle, pay it out. I’ve read that paying a collection in full is better than settlement or paying installments.

What about charge off’s, do I pay these also? I’ve read about the statue of limitations, if it’s based on the last reported some are as current as last month. There are a few items this company is disputing but most are medical bills, few are telephone bills. I was advised to go ahead and pay the telephone bills because they are not going to be deleted. Most likely the collection agency will update it as paid in full. I’m thinking about sending the president of the collection agency a letter requesting he authorize a pay and delete.

I’m not sure what to do, everyone has something different. I just need to take care of this matter ASAP and I can’t wait another year. Most sites I’ve been on stated that if old collections or charge off’s are paid it will take about 2 to 3 months before it shows affect to your score. This new lender gave me examples of people she was working with that had paid off old debt and their score increased. So I guess it all depends on the situation. That’s fine, I just need to make progress, it’s seems to be a little late but I need to do it own my own.

The collections are small collections, I have one charge off from a bank for $1100.00 and one for a gym membership for $800.00 those are the biggest ones. Steve I know this is long and indepth but I needed you to know from start to finish. Please help me.

The Isaac act states that paying old debt shouldn’t hurt your credit score, it may not actually help either. It willl show lenders that I am credit worthiness, I think. HELP Steve-Tiffany

What is the correct way to repair your credit? Is it true that paying old debt and collection agencies will lower your score more? If a collection agency doesn’t agree to a pay and delete but states they will update the account as paid in full, is this ok? (no settlement amounts) Is it ok to write a personal letter of pay and delete to the president of the collection agency if you can’t get anywhere with their csr reps? Should I just go ahead and start paying the collection agencies? A few have already sent me letters of notificationn that they will update account as paid in full and delete. Please advise

Tiffany”

The Answer:

Dear Tiffany,

Ultimately I think the problem here is you’ve wasted valuable time and money trying to game the system. Instead, let’s just focus on getting things back into a responsible position.

It is a fact that you say you owe these debts, for whatever reason you were unable to pay them, and you were in collections. If your credit report showed these debts, they were in collections, but they were now paid, that would be a true and accurate statement.

Your credit report isn’t a document that you get to pick and choose what is on it. It’s like a report card in school. If you got a D in a class, that impacts your grade point average but taking the class over again doesn’t remove the D.

The strategy you are trying has a couple of major flaws. The first is that if you do have true and accurate items removed from your credit report and you subsequently apply for credit using the ‘forged’ report you are committing credit fraud. That can have some serious implications.

Second, just because an item was tricked into being removed does not mean it will stay removed. Often times these items just appear again when the creditor dumps the data back to the credit bureau again.

Third, it is against the merchant agreement with the credit bureau to remove accurate information from the credit report. Some places will say they will do it but it is mostly just a trick to get you to pay the debt.

Fourth, the whole ‘pay to delete’ strategy is just not a realistic way to deal with accurate but negatively reported debt.

I personally think you are a lot better off at this point having a copy of your consolidated credit report in your hand that shows all three credit bureaus and contact information for your open debts. Use the debt snowball approach and just knock out the old debt. At the same time concentrate on rebuilding new good credit using secured cards, if you don’t have any credit cards. You can follow my easy credit repair process. Follow the credit repair link.

The goal should be to make sure you can show proof that you can get and handle a credit card so your credit history has some new good information to score you on as well.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Seven Easy, Surefire, Guaranteed Ways to Trash Your Credit

Steve Rhode — Fri, 25 Dec 2009 12:25:19 +0000

From How to Get Out of Debt

I spend a lot of time helping people resolve credit issues and getting finances under control. Now it’s time to give guidance to those folks who are desperate to screw-up their credit. Who’d want to do that, you say? Plenty of folks are in an all-fired rush to make bad credit mistakes. Here’s how they developed the worst credit scores I’ve ever seen.

1. Don’t pay your bills

If there was ever a guaranteed way to make your credit as bad as possible, not paying your bills has got to be at the top of the list. Not paying your bills screams of financial mismanagement and irresponsibility. Not paying your bills is your statement to the world that either you’ve got real money troubles or you just don’t care. Not paying your bills is like driving your new car into the side of the car dealership. It does a lot of damage and nobody can figure out why you did it.

2. Pay your bills late

Some people foolishly think they need to wait and mail their payment on the very last day. They don’t want their creditors to get any of their money one second before the due date. These days that’s just stinkin’ thinkin’.

Welcome to the age of the $50 late fee. Not only do your bills have a due date, they also have a due time. If you read the fine print carefully on your credit contracts (yes, that includes your credit cards), you’ll see a statement like “payment must be received by 10:00 a.m. on the due date.” In the good old days your creditors would cut you some slack. If your payment was due on Monday but didn’t float in with the mail until Thursday it wasn’t so critical. They’d even forgive you. Today, if your payment is due by 10:00 a.m. but doesn’t arrive until 10:01 a.m., you’ve got to pay the late fee.

Some folks are just overachievers when it comes to messing up their credit. Not only do they pay their bills past the due date and time, they barely get them in within 30 days. That kind of late payment history is going to show up on your credit report ‚Äì and your creditors are monitoring your credit reports for just that kind of stuff. Creditors can raise the interest rates you pay on all of your credit cards if you are late on just one of them. You might not be paying attention to your bills but your creditors are. They are looking for every reason (excuse) to jack up your rates. They’ll tell you it’s because your payment history makes you a credit risk, and they are right, but rather than close you down, they’ll just raise your rates and let you hang yourself.

3. Take out more credit than you can afford

If there were one message I wish I could implant into every adult’s brain it would be this one: Repeat after me, ‚ÄúJust because someone approves me for credit does not mean I can afford it.‚Äù Tons of people mess up their credit by going out and applying for credit everywhere until not even the high-risk lenders will give them a fix.

Hard credit truth: You have to be responsible for your own credit. You’ve got to know when things are getting tight, when you can afford another monthly payment and for how much. Nobody watches out for you but you. Got it? You’ve got to stop blaming everyone else for your situation.

Too many people are surprised when they get a low credit score because they’ve got a ton of extended credit. They’ve got cards at the butcher, baker and even the easy monthly payment card at the candlestick maker. You know the one, great candles, low terms and easy payments. Who can resist?

So what can you do? Just say no, and don’t forget to have a nice day. Seriously, if you find yourself limping from paycheck to paycheck, or you’ve got less than $1,000 you can lay your hands on within 12 hours without a visit to a loan shark or pawnshop, you’re cruising for a credit bruising. Don’t take on any more credit until you can easily make it month to month and you’ve built up your cash reserves.

4. Party, party, party

The quickest way to mess up your credit is to go on a spending binge and blow your bankroll ‚Äì maybe on a super fantastic vacation which is way out of your league or on that cool new car that just came out. Trust me, four days on Bora Bora is great but not worth falling behind on your mortgage. I’ve seen people work their whole adult lives just to blow all their money and max out their credit within 15 days.

Sometimes it’s due to a chemical imbalance in the brain, but most of the time its because people feel they’ve worked hard and are entitled to the good life. I’ve got news for you. Those folks must have tripped over a PlayStation and hit their head on the wide screen TV. Once they wake up from their delusion, they have a ton of regret and a special parting gift ‚Äì bad credit.

5. Cosign

I’m going to teach you everything you need to know about cosigning for credit in the next sentence. Don’t do it. In fact, don’t do it under any circumstance. Never do it. Don’t. I mean it. No really, I’m serious. If you cosign a credit application I’ll come over to your house and ask you “What were you thinking?”

The only reason you are being asked to cosign on a credit application is because the person who is applying for credit has a lousy credit rating and the lender wants someone else to go after when the applicant doesn’t pay. When you cosign you get none of the benefits of the credit and all the pain. I’ve seen people cosign for cars for their children, friends, roommates or lovers only to see the applicant never make a single payment and skip out of town with the wheels.

My favorite cosigning story is the recurring one about the man and woman who go to the mall to buy an engagement ring. The guy wants to buy a huge rock but his credit stinks so he persuades the woman to cosign for him. He gets the ring, gives it to her and splits. Now she has to pay for the ring he gave her.

When you cosign, the line of credit you are cosigning for will appear on your credit report, which will affect your credit score and your ability to get your own credit in the future. You are 100 percent on the hook for the payments if the other, uncreditworthy party (credit reject) forgets to pay.

The only advantage to cosigning is for the lender. They know they’ve got a person with better credit (also known as a sucker) to go after when the credit reject skips.

6. Forget to check your credit report

I haven’t seen a credit report in the past few years that does not contain errors. Those errors can cost you your good credit.

In the old days of computer programming, people used to use the excuse “garbage in, garbage out” for programs that were improperly coded and did not work. The same statement is true of your credit report. Your report should be nothing more than truthful facts about your credit history. Unfortunately, it often turns out to be more gossip than fact.

Stuff ends up on your credit report because one of your creditors told the credit bureaus about you. And while they may have taken great care to get the information correct, you might have a name or some other identifying information that is very similar to someone else. Sometimes the information innocently gets mixed up on your credit report. Other times, perhaps, aliens put it there.

The only way you are going to know if your credit is trashed is to get a copy of your report and take a look. There are three main credit bureaus and they all have different information about you.

If you want to get the whole truth about your credit score you’ve got to get a consolidated copy of all three credit reports.

7. Credit repair

No credit is just as bad as bad credit. Some people think if they invent a new credit file they will be able to hide their poor credit history. The problem is that no creditor with a pulse is going to believe that a 46-year-old man suddenly decided to apply for credit for the first time yesterday. Credit repair is stupid. In order to fix your credit report, pay your bills on time, don’t get overextended, don’t cosign and clean up the incorrect information on your credit report. Or, just put three chicken wings in a bag and wave it over your head and hope for the best.

@GetOutOfDebtGuy

I Have Paid Debt I Want Removed From My Credit Report. – Sara

Steve Rhode — Thu, 17 Dec 2009 01:43:55 +0000

From How to Get Out of Debt

Sara

“Dear Steve,

I had 5 outsanding debts, that I never paid any payments on from 2004 I took out a small loan, and paid them all off in 2006(which I have paid on time to this day). Now that all five accounts are closed, How do I get them to take it off my report? Do I have to wait the 7 years and will it be a clean slate from there? Thank you for your time.

How do I get paid/closed debt accounts off my credit report?

Sara”

The Answer:

Dear Sara,

You don’t get to have them legally removed from your credit report. They will be reported for seven years and then will remain on your credit report file but simply not displayed anymore.

Items on your credit report are supposed to be true and factual. That includes the good stuff and well as the bad stuff.

I understand what you want to do but it is a bit like asking for a college transcript with everything below a B removed. It just is what it is.

Big Hug!

@GetOutOfDebtGuy

California Sues Credit Repair Business for Operating Illegally

Steve Rhode — Wed, 30 Sep 2009 20:12:35 +0000

From How to Get Out of Debt

California Attorney General Edmund G. Brown Jr. today sued Todd Swick and Michael Sardo, owners of Los Angeles based Executive Financial Credit Services, for ignoring “repeated warnings” to register with his office and post a $100,000 bond with the Secretary of State.

“Swick and Sardo violated California law by refusing to register their credit repair business with the Attorney General’s office and post a $100,000 bond, even after repeated warnings,” Brown said. “So today, attorneys from my office are filing suit, sending a clear signal to credit repair firms operating in California that they must register with the Attorney General’s office and follow the law.”

Executive Financial Credit Services offers to help repair their customers’ credit by challenging negative or inaccurate items on credit reports directly with the three credit report bureaus-Experian, TransUnion, and Equifax. Under California’s 1984 Credit Services Act, companies providing credit repair services in California are required to register with the Attorney General’s office and post a $100,000 surety bond with the Secretary of State.

In late 2008, Brown’s office sent a letter directing the business to register and provided information to assist in the process. The business did not respond. Despite repeated warnings, Executive Financial Credit Services did not register and obtain a bond.

Later Swick claimed the business was no longer conducting credit repair services and didn’t need to register. Brown’s office, however, discovered the business was continuing to operate as a credit repair firm. In early 2009, Sardo informed Brown’s office that the business was moving from California to Arizona and would not complete the registration process. Brown’s office informed Sardo that if the business continued offering credit repair services in California, it was bound by California law to register.

Nevertheless, Executive Financial Credit Services still has not registered. So today, Brown filed suit in San Diego Superior Court, contending that the business violated:

California Civil Code section 1789.18 for not posting a $100,000 surety bond with the Secretary of State’s office;
California Civil Code section 1789.25 for conducting a business without first obtaining a certificate of registration from the Attorney General’s Office; and
California Civil Code section 1789.13(a) for charging consumers money before completely performing the services they promised.

The suit seeks a permanent injunction to keep Executive Financial Credit Services and its principals from operating illegally, civil penalties of not less than $200,000 and restitution for victims.

Brown has taken recent action against credit fraud. Last week, Brown arrested a con artist who stole more than $300,000 from over 600 victims through a credit card and credit repair scam. Ralph Adam Rendon offered victims credit lines of up to $100,000 without any credit checks and offered credit repair counseling. Victims paid an upfront fee of $500 but never received the credit card or any credit repair services.

@GetOutOfDebtGuy

I Can Afford to Payoff My Old Debt. Should I? – Emma

Steve Rhode — Sun, 02 Aug 2009 16:11:35 +0000

From How to Get Out of Debt

Emma

“Dear Steve,

I was financially reckless as a college student, incurring approximately $22,000 in various credit card debt that I ignored throughout graduate school & post-graduate training. Well, now I’m all done and I make a lovely, lucrative salary.

I want to buy a house. My credit score is in the low 500s. I can afford to pay off my $22,000 in a very short period of time. How do I begin to approach this? It seems that if I just pay every cent I owe, then my credit score will go down! What do I do??

Emma”

The Answer:

Dear Emma,

Repaying your debts as agreed will not lower your score, it will increase it. And the good news is that repairing your credit when you’ve got the money to pay is a fairly easy process.

I think you should follow this link for a copy of your 3-1 consolidated credit report. You need to look at all the credit reports since they don’t all report the same creditors. While you are getting your credit report you can order your credit score as well. This will give you additional specific advice about actions you can take to improve your credit score further.

I would then suggest that you contact the creditors you still owe from the lowest balance due to the highest. As you pay one off, move on to the next.

You want the debts to show as paid, without any residual negative activity so don’t settle these debts. The amount of debt forgiven will be reported as a negative entry and you will have to pay the IRS income tax on the forgiven debt if the forgiven debt makes you solvent.

If you have not resumed credit activity again, you need to get a secured credit card, like a Visa or MasterCard to show you can handle credit. That will help to boost up your score as well.

Please promise me one thing though, don’t borrow the $22,000 from an IRA, 401(k) or 403(b) retirement plan. And if that’s what you were planning to do, don’t.

Big Hug!

@GetOutOfDebtGuy

American Credit Experts and Legal Credit Repair Center Settles With FTC Over Credit Repair Infractions

Steve Rhode — Fri, 26 Jun 2009 11:41:03 +0000

From How to Get Out of Debt

A federal court has ordered a credit repair operation and its principals to stop making false claims and requiring advance payment for credit repair services. See the court order here. The agreed-upon court orders are a result of a settlement between the Federal Trade Commission and the “credit repair” defendants.

The Commission sued the defendants in October 2008 as part of “Operation Clean Sweep,” a crackdown on credit repair operations. The defendants represented that they could remove negative but accurate information from consumers’ credit reports, including bankruptcies and late fees. According to the FTC, the defendants charged consumers up to $59.95 initially, then $59.95 per month, to send letters to credit reporting agencies disputing information on the consumers’ credit reports. Contrary to the defendants’ representations to consumers, those dispute letters failed to remove accurate negative information from the consumers’ credit reports.

The orders bar the defendants from violating the Credit Repair Organizations Act by charging clients fees in advance and claiming that a credit repair organization can permanently remove negative information from credit reports, even when the information is accurate. They also bar the defendants from making deceptive claims when marketing any product or service, including credit repair services.

The orders further prohibit the defendants from collecting money from consumers who purchased their services before December 3, 2008, when the court halted their unlawful practices, and from disclosing or benefitting from customers’ personally identifiable or financial information. The orders require them to take reasonable measures to protect consumers’ personally identifiable information during its disposal.

The order against Ace Group, Inc., doing business as American Credit Experts, Inc., The Ace Group, Inc., The Ace Group, and ACE; Legal Credit Repair Center, Inc.; Michael Singer, and Gerald Roth, imposes a $20,645,754 judgment that will be suspended if Singer and Roth pay $5,000 each because of their inability to pay the full judgment. The order against Melvin Kessler also imposes a $20,645,754 judgment, which is suspended based on his inability to pay. If the defendants are found to have misrepresented their financial condition, the full judgments will become due immediately. The orders also contain record-keeping and reporting provisions to allow the FTC to monitor compliance with the orders.

The FTC advises that only time, effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your credit report. Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide you with a free copy of your credit report once every 12 months, if you ask for it.

Steve
@GetOutOfDebtGuy

Source: American Credit Experts and Legal Credit Repair Center Settles With FTC Over Credit Repair Infractions

I’m Being Chased For a Repo From Six Years Ago. – Steve

Steve Rhode — Tue, 23 Jun 2009 19:03:48 +0000

From How to Get Out of Debt

“Dear Steve,

I went through a bad time financial about 6 years ago. In 10/2004, I turned a vehicle back into the lender that financed it MMCA. I only ever heard from them once by phone and recently, in the last 90 days, they have transferred the old debt to a collection company showing it as an unsecured debt. This is from NH

The collection company has called the house trying to negotiate a settelment; What are my options, as it stands in the way of me now getting a conventional mortgage? I hate dealing with collection agents and I have a credit service disputing it, but I don’t know when it might drop off.

Thank you,

Steve”

The Answer:

Dear Steve,

The debt should drop off your credit report seven years after it was first reported. But bear in mind that just because it is no longer on the credit report does not mean that it is not collectible. Depending on the statute of limitations in your state you may still be sued for this past debt. Once the statute of limitations runs out you can no longer be sued but they can still try to collect.

If you have the cash on hand you could probably settle this debt for around 40% of the outstanding balance.

As long as this open and outstanding collections account remains on your credit report it does not help your chances of getting a mortgage.

Big Hug!

@GetOutOfDebtGuy

Florida Credit Repair Firm, U.S. Credit Find, Reaches Settlement With Illinois Attorney General

Steve Rhode — Sat, 20 Jun 2009 14:18:08 +0000

From How to Get Out of Debt

Attorney General Lisa Madigan has shut down the alleged “phone cramming” operations of a Cape Coral, Fla., credit repair company that placed unauthorized charges on the phone bills of thousands of Illinois consumers, small businesses and local governments. Through a settlement agreement reached with the Attorney General, US Credit Find and its owner, Aaron Stanz, have agreed to cease participating in the alleged deceptive practice. The settlement is the result of a lawsuit filed by Attorney General Madigan against US Credit Find in February 2009.

As part of the settlement agreement, consumers who were victims of US Credit Find’s phone cramming scheme have until Aug. 20, 2009, to file complaints with the Attorney General’s Consumer Fraud Bureau to be considered for refunds from the company. US Credit Find also has agreed to cancel all current contracts with Illinois consumers and to cease the unauthorized billing of these customers immediately.

“Our investigation showed that the defendants made unauthorized charges on more than 9,000 Illinois consumers’ phone bills,” Madigan said. “Unfortunately, because of scams like this, it is important that consumers review their phone bills carefully to make sure that no unauthorized charges appear.”

US Credit Find purports to offer an online tutorial that will help consumers fix their credit. Madigan’s office received complaints from consumers who began noticing monthly charges of $9.99 from the company on their phone bill even though they had never had any contact with the company, did not use the company’s product and never authorized any type of charge to their phone bill.

Madigan’s complaint alleged that in some instances when consumers disputed the charges, the defendants falsely claimed they had received approval from someone authorized to place charges on the phone bill. In some cases, the individual from whom the defendants claimed to have obtained approval was unknown to the consumer disputing the charges. In other instances, the defendants claimed to have signed consumers up for their services through the defendants’ Web site (www.uscreditfind.com), but a number of consumers denied having any contact with the defendants or their Web site.

@GetOutOfDebtGuy

I Am a City of Houston, Texas Employee and Need to Repair My Credit so I can Build a House. – Jocelyn

Steve Rhode — Tue, 19 May 2009 12:45:30 +0000

From How to Get Out of Debt

Jocelyn

“Dear Steve,

I am a 15 year City of Houston, Texas employee. My gross income is about $27,000 a year. We get no raises or cost-of-living adjustments. However, despite my low income I have managed to purchase a piece of property. Years ago I became ill with a form of cancer and ended up filling for bankruptcy.

My credit is shot. I am 49 years old. I want to fix my credit so I can build a house. I do not know where to begin to repair my credit. I collected all three of my credit reports but find them difficult to understand. I need help. I want my own home so bad I can taste it.

Do I need a credit restoration service? Are there any legitimate ones? If not, where do I go for help?

Jocelyn”

The Answer:

Dear Jocelyn,

The consolidated credit report I use is the one I find easiest to read. Use the link to get your credit report as well.

This credit report combines the information from all three major credit bureaus and allows you to compare the information by creditor on one combined credit report, rather than looking at separate reports, which can be confusing.

I would urge you to get the credit score option as well. It will tell you exactly what is bringing down your credit score and what actions to take to bring your credit score back up.

The consolidated credit report will also make it easy to spot any wrong or incorrect information about you. That information should be removed and you can request that it be removed by following the dispute procedure that is included with the consolidated credit report.

I suspect that one reason your credit is still in the dumps is because you don’t have much of a current credit history of good and on-time payments. The primary way you overcome bad credit is to close the door on old debts by paying them off or with bankruptcy and then start using credit again to report good information. If you don’t, then your credit history is a report card of only bad news.

There is no need for you to use a credit repair or credit restoration service for this. I think you can handle it all by yourself. Once you follow the steps above and have reviewed your credit report and started to address any remaining open past due accounts that were included in your bankruptcy but still show as open, I think you should find a local mortgage broker to work with.

Go to the mortgage broker and explain your situation and your goal of wanting to buy a house. The broker will help you to understand what will be necessary for you to be able to qualify for a home loan. At that point you’ll be able to see and identify the target and execute your plan to achieve it. At the same time, make sure you are saving up cash for a down payment. Banks like that.

Big Hug!

@GetOutOfDebtGuy

How Long Will it Take Me to Raise my Credit Score by 100 Points? – Thomas

Steve Rhode — Wed, 18 Mar 2009 15:08:13 +0000

From How to Get Out of Debt

Thomas

“Dear Steve,

530-590 credit score… have gone late on several payments on credit card and car loan over past year… (current for the past 3 months) Had one item (an old utility bill) go to collections. I had no clue my score was this low.

How long does it take to raise your credit score by approximately 100 points.

Thomas”

The Answer:

Dear Thomas,

How long will it take, depends? It depends on what the current situation really is and cleaning that up. Once you do that then we need to start getting new good credit reported about you.

The first step here is to get a copy of your consolidated credit report. Click here to get this consolidated credit report. It is the one I use and I think it is the easiest to read and makes information from all three three credit bureaus easy to read and compare. When you order your consolidated credit report be sure to order your credit score with it.

If you do that the credit score with your consolidated credit report will tell you exactly what you need to do to raise your score.

How long will that all take? It will take as long as it takes you to do all of the above, clear the things that are bringing your score down and start to add new good credit.

You can add new good credit by getting a secured credit card that reports to the credit bureaus. It is best if it reports to all three major credit bureaus.

Big Hug!

@GetOutOfDebtGuy

How Can I Get Out of Debt Quickly and Fix My Credit Report? – Manny

Steve Rhode — Thu, 05 Mar 2009 00:59:55 +0000

From How to Get Out of Debt

Manny

“Dear Steve,

I have five credit cards and I have made agreement with two out of five creditors, the other 3 creditors do not want to help me out. What can you advise me to do. I have five cards all five cards comes to 21000, my daughter will be in colllege in about 51/2 years and I want to clear my credit by then so I could help her out through college. Please give me your best advise. thank you

Manny”

The Answer:

Dear Manny,

It is no secret on how to get out of debt, just pay as much as you can each month using the debt snowball method to pay your debt down.

Just don’t use the cards or go further into debt as you try to dig yourself out of this debt hole.

Since you said that some of your creditors did not want to work with you I would guess that you have had some problems making payments to your creditors. If that is the case, you could always go bankrupt now and use the years in between a current bankruptcy and college to rebuild your credit. If you are struggling to make it month-to-month and you don’t think you will be able to keep sending extra payments each month, then consider talking to a local bankruptcy attorney and see what bankruptcy would mean for you.

Follow these step-by-step directions to clean up your credit report.

Big Hug!

@GetOutOfDebtGuy

Bre Wonders Why Her Credit Report Still Shows Negative Items That She Thought Should Have Been Removed By Going Bankrupt

Steve Rhode — Thu, 20 Nov 2008 17:42:03 +0000

From How to Get Out of Debt

Bre

“Dear Steve,

I filed chapter 13 bankruptcy and little to my knowledge my attorneys who represented me did not clear my credit after the filing or even in the process so in essence I still have all the listings of old creditors on my credit report and it’s a bit tasking to have them removed.

Any suggestions on how to do so? My credit score has not increased even after filing actually the calls has just stopped and I’m still in ChexSystems so what’s the purpose of bankruptcy if there is not a reflection of it to clear your credit and increase your credit score?

Do you know a great attorney that actually will clear your credit in the process?

I did see the physical results in my bankruptcy however, I desire my credit report to represent the “paper effects” of it as well.

Bre”

The Answer:

Dear Bre,

Wow! I’m stunned that you thought that going bankrupt would somehow clean your credit report and improve your credit score. It won’t. In fact bankruptcy adds another big negative item, bankruptcy, to your credit report and lowers your credit score in the short run.

Let me use a school analogy to help you better understand your credit report. A credit report is not like a report card, it is more like a transcript. The transcript lists all the classes you attended and the grades, good or bad, that you got. Dropping out of school does not wipe the records off your transcript. Going bankrupt does not remove negative but accurate items off your credit report.

I am very surprised that throughout your discussions with the bankruptcy attorney and the pre-bankruptcy credit counseling that this was not clarified for you.

Now that you have gone bankrupt there are ways to repair your credit and improve your credit score.

Get a copy of your consolidated credit report and look for any negative but inaccurate items that are listed. Use the dispute procedure shown in this credit report and have those items removed.
To rebuild your credit score you will need to start having good information reported on your credit report. To do this you will need to get a major credit card that will both give you a card and report to the credit reporting agencies.
There are credit cards available for people with bankruptcy on their record.
As you continue to pay your new account on time and more time passes from your bankruptcy, your credit score will improve.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Bogus and Scam Credit Counseling Groups Become Target Of Florida Legal System

Steve Rhode — Tue, 21 Oct 2008 04:39:01 +0000

From How to Get Out of Debt

TALLAHASSEE, FL – Attorney General Bill McCollum today unveiled his office’s latest consumer protection initiative in the form of a coordinated enforcement effort targeting potentially improper tactics in Florida’s debt relief industry. In a statewide initiative, the Attorney General’s Economic Crimes Division has taken legal action against five companies and opened formal investigations into the practices of an additional five companies, all of which were purportedly offering debt relief services including credit counseling, credit repair, debt management, and credit card rate reduction services.

“As more Floridians facing financial difficulties are turning to debt relief organizations for help, an increasing number of these companies are taking advantage of the nationwide financial situation and defrauding consumers,” said Attorney General McCollum. “Our efforts will send a message to this industry that preying on consumers in financial distress will not be tolerated.”

The statewide initiative was launched in response to the growing number of consumer complaints regarding the debt relief industry. To date this year, the Attorney General’s office has received more than 1,400 debt relief-related complaints, which represents a 62-percent increase from the previous year. Complaints allege that certain companies promise services and savings that they don’t provide, refuse to make refunds, and often leave the consumer worse off financially than they were when they signed on.

Consumer advocacy groups recommend that consumers with mounting debts try first to resolve their financial problems themselves, before seeking the assistance of a debt relief organization.

“Many times a collection agency will settle for a lower payment, and even eliminate late fees and penalties if a consumer tries to negotiate their debt. This may leave a blemish on a consumer’s credit report, but it’s one of several ways to stop the downward spiral into deep debt,” said Brad Ashwell, a consumer advocate for the Florida Public Interest Research Group. “However, fraudulent practices can devastate consumers already suffering from debt and I commend the Attorney General’s aggressive actions against these harmful practices.”

The following legal actions were announced today:

Lawsuit filed against IXE Accelerated Financial Services

The Attorney General’s Economic Crimes Division filed a lawsuit against an Orlando-based company accused of making misleading promises regarding credit card rate reduction services. IXE Accelerated Financial Services (IXE) allegedly offered credit card rate reduction and credit counseling services to consumers primarily through telephone solicitations and collected fees from consumers, but never provided the services.

Lawsuit filed against Enterprise Technology Group, Inc.

A second lawsuit was filed against Dunedin-based Enterprise Technology Group, Inc., doing business as Ameritrust Financial Card. The lawsuit states Ameritrust charged enrollment fees for a credit card that the company promised would operate like a normal credit card while improving the consumers’ credit score through Ameritrust’s monthly reporting. In reality, Ameritrust’s cards were usable only on Ameritrust’s online catalog and the company allegedly never reported consumers’ accounts to any credit bureau.

Pending litigation against two Jacksonville companies

The Economic Crimes Division is also currently in litigation against two Jacksonville-based companies. United Debt Solutions, Inc., allegedly offers to assist consumers in negotiating settlements and paying off debts, but fails to do so and makes unauthorized withdrawals from consumers’ bank accounts. The Attorney General’s Office has also obtained a default judgment against the corporate defendants from Provident Financial Services, Inc., also known as Future Financial Direct, Inc. Provident was allegedly failing to negotiate, reduce, and consolidate consumer’s debt as promised. Litigation is ongoing against the company’s principal owners, Curtis Wood and Ryan Boyd. The default judgment was reached in July.

Settlement reached with New Leaf Associates, LLC

The Attorney General’s Office reached a settlement with multiple defendants named in a Pinellas County lawsuit that involved a “debt elimination” scheme operating under the name of New Leaf Associates, LLC. New Leaf victimized thousands of consumers nationwide by promising consumers there was a secret “legal administrative process” to completely eliminate debt and improve credit scores in the process. The Attorney General obtained an injunction to stop the operation of the scheme, but has been litigating to obtain a return of the funds to the consumers. The settlements with 16 defendants prohibit the defendants from participating in or marketing any similar scheme and require payments of costs and fees and restitution for Florida victims amounting to approximately $320,000 and additional settlement negotiations are ongoing with other defendants.

Subpoenas served

Subpoenas have been served against other debt relief organizations including Financial Freedom Resources, Inc., of Clearwater; Specialized Funding, of Largo; United Debt Solutions, ADA Tampa Bay, also known as American Debt Arbitration, of Tampa; Nodelay Enterprises, Inc., also known as Nodelay Account Services, of Orlando; and Equity First Financial Corp., of Casselberry.

Companies examined in conjunction with this initiative are suspected of violating Florida’s Deceptive and Unfair Trade Practices Act along with other laws regulating telephone solicitations, telemarketing, credit counseling organizations, and credit service organizations. While the exact practices of each company vary, most of them allegedly charge consumers illegal up-front fees, fail to provide consumers with written contracts and refunds as required by law, and regularly misrepresent the nature and benefits of their services. There are a total of 31 debt relief organizations currently under review for potentially misleading or deceptive practices.

Jennifer Says “We Have Accumulated So Much Debt And Bad Credit. What Do We Do?”

Steve Rhode — Wed, 15 Oct 2008 20:25:55 +0000

From How to Get Out of Debt

“Dear Steve,

We have accumulated so much debt our credit score is to low to even buy a house. I’ve been looking into different programs to help, unfortunately the charge money I can’t afford either, we have to do this on our own.

If a creditor is offering to let you pay over 4 payments and only 55% of what you owe is this going to help our credit or hurt it more

Jennifer”

The Answer:

Dear Jennifer,

To get out of this situation it is going to wind up costing you something. You’ll either pay for a professional to manage your debt recovery, like in a debt management program, or, like many, you’ll try it on your own and make costly mistakes. Either way, you wind up paying.

Let’s see if I can’t create an inexpensive way for you to deal with this situation.

My first recommendation is going to cost you a little but I want you, using this link, to get a consolidated credit report and get the credit scores at the same time. This consolidated credit report is the best I know of and when you purchase it with the credit scores it will tell you exactly what you need to do to increase your credit scores. It is a small price to pay for very specific and direct information that will give you the exact guidance you need to increase your credit scores.

Your statement about repaying a debt for less than you owe is actually a form of debt settlement. The amount of debt forgiven is reported to the IRS and you may have to pay income tax on that forgiven debt. Read Beware of the IRS if You Settle or Default on a Debt. However, because it is a creditor that will allow you to pay it over four payments it makes it sound like this is a relatively small debt.

The forgiven debt is also reported on your credit report as a bad debt so while it gets you out of debt, it does not address your number one goal of increasing your credit score. If your number one goal is to increase your credit score then maybe you’ll want to repay the debt in full if you can afford it. That will then show the debt was delinquent but satisfied rather than delinquent and part written-off as a bad debt.

My second recommendation would be that while you are using the specific steps in that consolidated credit report I recommended I would urge you to consider getting a secured credit card that reports to the credit bureaus. You see, addressing your old bad credit is one step but if you are going to improve your credit report, better and faster, we also need to get new good information on there as well. These credit cards for people with poor credit will help you do that.

My final recommendation is for you to download my free book, Eliminate Your Debt Like a Pro and follow the advice and steps in there.

Big Hug!

@GetOutOfDebtGuy

How to Get Out of Debt With the Get Out of Debt Guy » credit-repair

The Financial Expert Group Says for a Fee They Can Make My Bad Credit Go Away. – Carol

The Answer:

Get a Copy of Your Consolidated Credit Report

Boosting Your Credit Score With Good Credit Using a Secured Card

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