A creditor does not “have” to place any item on a credit report. Often “good” credit goes unreported completely.  Check your credit report and see how much is positive and how much is negative…I guarantee all of the unpaid bills are there, but where are all of those ones that you paid?  (A subject for another post)  However, an adverse credit account may ONLY stay on a credit report for “up to” 7 years with the exception of some bankruptcies.

Most creditors remove delinquent information at about the 6 1/2 year mark so as not to violate the provisions of the FCRA. However, if you settle with some of these creditors without written confirmation that they will remove the account upon receipt of payment, you may start that 7 year clock all over again with a new (yes NEW) adverse account. Negotiate if you can.  The credtors just want their money.

That is the yes, and the no, now here’s the maybe.  Most debt has an expiration date  just like the milk spoiling in my refrigerator called a “statute of limitations”.  You will want to check the SOL’s for your state and also for the type of debt.  In NV for instance credit card and contractual debt have 2 differerent expiration dates.  Then of course there is “student loan” and “child support” debt which will follow you until you die (and probably beyond).  Do NOT irritate the Government because it will bite you in the butt.

However, every once in a while there are consumer protectin laws that come into play.  Here, specifically the FCRA Fair Credit Reporting Act.  Section 2A means that if the “statute of limitations” is surpassed a creditor may NOT report the debt as outstanding as it is uncollectible.

I put the specific article in here for you “Nervous Nellies” that may doubt that there are actually laws that swing to your side.  Well, let’s keep ‘em while we have ‘em and best of luck to you.

If you have any questions, we are always here to help.

[15 USC 1692e]
(2) The false representation of –

(A) the legal status of the alleged debt

and

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt

Although many people will tell you that inquiries have little to nothing to do with your credit score they impact your ability to get credit in other, unforseen ways.

Because I work with many people that are looking at acquiring SBA loans and other loans I can tell you unequivocally that those creditors taking a peak at your credit report can come back to bite you in the butt.

So, what exactly are inquiries?  An inquiry is anytime anyone requests access to your credit information for the purposes of making a decision to extend to you credit.  Today however, credit reports are also used for employment purposes, criminal proceedings, etc.  For our little demo we are going to stick with just the credit issue.

Inquiries account for approximately 15% of your total credit score.  Not a huge amount, I know.  But, what if I told you that they can still keep you from getting new credit even with scores as high as 780 or higher.  What!?!   No way!!  Way!!

What a lender sees is not your score, which at 780 if that was the only criteria would qualify you for the best rates and usually a pretty substantial credit line.  What they see is that you are applying for credit all over the country and what happens if you get approved for all of them at once?  Yikes, you are now at a huge debt-to-income ratio.

But….What if you didn’t apply for anything?  How could you have inquiries on your report.  Here comes the “did you know?” part.

You must place an “opt-out” message on your credit report to keep creditors from accessing it.

WHAT!?  You read me right.  Much like a “do not call” list you must “opt-out” of receiving pre-approved offers and allowing others to look at your credit report without your permission.  This goes back to remembering that your “credit report” is actually and “information report”.  The bureaus earn their billions every year buying and selling your personal information, often without your knowledge…that is until you attempt to acquire an SBA loan or other loan that you need.

YOU have the right to access your report anytime you wish and it does not affect your inquiry status.  This is known as a “soft pull”.  A soft pull will show when a current lender has accessed your account for review, however this does not affect your score nor is this shared with other lenders.

A creditor accessing your information for the purpose of extending credit is known as a “hard pull” and that information is included in your FICO score and listed on your report.

This information is shared with anyone else that does a “hard pull” including the people that are going to make the decision on your SBA loan and your current lenders that are deciding if you should or should not have your limit raised or reduced.

Very few people are aware that you actually have to tell the bureaus “No, don’t share my information”.  It seems like common sense, but as we have seen very little having to do with credit and the credit reporting agencies has to do with common sense.

The first step is to go to www.optoutprescreen.com to have electronically remove your report from access.  You can even go one step further, and as I find this a great way to help with identity theft, you can request a code from the bureaus that is required for ANY credit inquiry and must be used before your credit can be accessed.  This makes a bit more work for the lender, but as we have seen the rules have been skewed toward the lender for a very long time.  Now it is about taking control over your credit.

As always we are here to assist you with that.

For a credit assessment you can contact me at dwest@740creditnow.com

While it is your legal right to dispute incorrect information on your credit report, it is also important to note that disputing information on your report is NOT A WAY TO AVOID ACTUAL DEBT. But why would I say this when I run a credit restoration company that has helped thousands???  Because if you choose the wrong company it may just come back to bite you in the butt.

What could some of these consequences be?

The newest, latest and greatest that I have seen – Automated Underwriting Systems being set to sort and sometimes reject based on whether a client has disputed items on their credit report.

I always stop a dispute process if the client is making a large purchase, i.e. home, car in the next 30-60 days because anything that is currently is dispute is NOT included in your FICO score.   Well, that makes sense because, well duh, a decision has not been made on that particular trade-line so how could they include it any scoring model.  Okay, everyone is with me so far.  This sort of makes sense, but what about the trade-line the shows it was disputed???  Past tense. Not current?!!?

My client was given a conditional approval for a VA loan.  There was a debt that was from several years ago, far past the statute of limitations for his state, long past the time that it COULD be reported on his report, however it was a “zombie debt” that had been resold over and over to several collection companies violating laws under both the FCRA and the FDCPA.

So, because this was not legally supposed to be reporting the client exercised his right to dispute the item several years ago.  Unfortunately, like so many others he didn’t get past the gates at the bureaus and gave up.

Now this debt is so old that it is not severely affecting score like a NEW adverse account would.

Here is where Credit Restoration can get tricky.  Do you chance a lower score if the item does not come off in the first dispute thereby possibly creating a NEW ADVERSE account or do you dispute it knowing the law is on your side but the client may not get it removed in time????  Well, at this point he doesn’t have a choice but to dispute it again.  The reason, as I learned were the Automated Underwriting Systems at the VA are being set to detect disputed items.  This requires now manual underwriting, letters of explanation by the broker or loan officer and client, and possible delay of a sale.  Many loan officers don’t or won’t do this.

Now the decision to move forward is with a human underwriter.  The VA guidelines state that they may use their “best judgement”.  Seriously???! The lenders are all about “shutting the barn door after the horse has escaped” as my grandmother would say.  Now we find lenders so fearful and uneducated about what is in a credit report they believe that a bureau report is an indicator if credit risk. Puhleeze.

This is just one example of the intricacies of working with credit.  Like any other profession there are good and bad “credit repair” companies.  Make certain that you clearly state your objected goal, i.e. better credit, home purchase, education, etc.

Consumer Credit Files Rights Under Federal Law

You have the right pursuant to 15USC§1681i to dispute the completeness or accuracy of any item contained in any file maintained by any consumer credit reporting agency.

What do you think about a system that auto-selects to deny your loan application based on exercising your legal rights???  And just because you have the right, should you use these to dispute anything you don’t care for on your report???  Please let me know what you think.

We are always here to answer questions or assist you in your Credit Restoration needs.

For your credit assessment contact me at dwest@740creditnow.com

Most people are not aware that credit restoration companies are regulated by the Credit Repair Organization Act of 2005 and were we not lumped in with the payday loan companies and a few other iffy type industries we would not even make the top 500 worst industries with which to do business.  I believe we rank 542 with the FTC falling behind video game makers if you can believe that.

The truth of the matter is that we have a stigma, and not undeserved.  However, since 2005 and moving forward the ones that take this industry seriously want to remove that stigma and create an industry that can be helpful, but also one that doesn’t immediately scare the hoohaa out of a client just by considering speaking to us.

Okay, so now that we have discovered that basically EVERY industy has good and bad guys, let’s talk about how to tell the white hats from the black hats in credit restoration.

1.  Do they ask for a lot of money up front?- This is a no-no.  Although most CRC’s (credit restoration companies) will take a small set up fee, this covers actual work being done.  This should encompass your first letters, postage, etc.  All of which is money out of the pocket of the CRC.  The reason that I charge a small fee is that like CRC’s there are clients that are out for a free ride as well.  I cannot tell you how many clients get what they want out of the program and then suddenly decide that I don’t need to get paid for my work.  The laws are scewed in favor of the client wherefore we must perform a task prior to payment.  This is why letters are sent before your first check is cashed.

2.  Do you have contact with the company?- You should then have contact with your case manager on at least a monthly basis.   Again, services must be provided prior to payment being made.

3.  Does your CRC understand your goals, i.e. home purchase, car, clean up credit, etc?- Do they have a plan and timeline?

4. Do they guarantee results?- CRC’s may NEVER guarantee an outcome.  If someone promises you such and such will happen…run far and run fast!!!!

5.  Do they “require” you obtain one of their credit cards?- Chances are they are getting a kick-back and while it may be fine, ultimately this entire process is meant to be looking out for your best interest not theirs.

6.  Are their fees reasonable?- I am about to lay the truth out to you.  Unless you are a victim of identity theft, almost any fee is reasonable, within reason (follow that?).  Working on your credit is not going to be free.  Even the so called non-profits can become quite expensive.  Unreasonable is anything that makes you think twice.

Okay, so you weren’t real smart about the whole credit thing, but you probably have a sixth sense when it comes to someone trying to fleece you.  Especially combined with any of the above scenarios.

There are other ways to tell, but sometimes it will just be in the way that the rep speaks with you or the feeling that you get from them.

The best programs are the ones that offer not only work on the adverse accounts, but assist you about education in obtaining new and good positive accounts.  If all you wanted to do was get rid of “bad” credit you would file for bankruptcy, but if you want to learn to have and use credit to your advantage, find a CRC that offers both.

Good Luck!!!

And as always, we are here to assist you with your credit knowledge needs.

For your credit assessment contact me at dwest@740creditnow.com

Wrong?  You read me right, wrong!  Now it would make sense that if the client so chose they could pay the debt, theirs or not, the creditor (by this time I am certain it’s a collection company) has their funds and everybody’s happy.  But that would make sense, and this is of course credit we are speaking of.

I tell all of my clients and apparently don’t make it clear enough but the 3 big personal reporting agencies Experian, Equifax, and TransUnion are NOT “credit reporting“ agencies.  They are “information reporting” agencies.

Once people have a firm understanding of that, it becomes much easier to understand that things we do may seem “smart” or the “common sense” or the “right” thing to do, but may actually, according to the bureaus mathematical formulas, just be stupid.

So here is the likely outcome- you pay a $100, 5 year old debt that you knew nothing about.  Again, probably because it is not even your debt.  Now the scoring models used, which are all different versions of Fair Isaac Corporation, do not differentiate between payment on an old debt or a new report of a bad account.  And here’s a wake up call.  I know this is confusing, which is why I have a job… That 5 year old debt probably was having very little impact on your credit score.  Now it is being reported as a new “Paid” collection account, but a new collection account just the same.  You very likely dropped between 20-30 points.  Yikes! The horror.

Okay, so what could you have done differently?  First, find out if the debt is actually yours…you ding-dong.  Collection companies buy debt in bulk and one transposition of a number and you could end up with someone else’s debt.  Second, the collection company must by law provide you with a verification of debt, which means that they must provide the documentation showing that the account does in fact belong to you.  Yes, your credit report is in most cases nothing more than a list of allegations against you (you have probably noticed more negative than positive) and it is up to the creditor to show proof.  Ask for this proof.  If it does not exist, by law the creditor or collection company must legally and permanently remove it from your “information” file.

Second, okay so you find out it is yours.  It’s one of those deals where you moved and didn’t leave a forwarding address for the garbage company or in some cases an unpaid parking or moving violation ticket will show up on your “information” file.  Either way you forgot and now you want to make things right.  How to pay it without it becoming a newly reporting PAID collection?

Call and negotiate, but this is where it is sometimes best left to the professionals.

Ultimately the creditors want their money.  They have bought the debt for an average of approximately 10¢ on the $ and hope to get all but in all likelihood will settle for 30-50% of the debt.  They are still making a killing.

Ask for a deletion letter…in exchange for payment they will remove the entire trade line from your credit report. Do NOT let them tell you that they must keep it on for 7 years. This is not true.  An adverse account MAY stay for no longer than 7 years but can be removed at any time.  Get it in writing that they will remove the account from you “information report” upon receipt of payment.  DO NOT TAKE THEIR WORD FOR IT.  Again this is where a professional is of great assistance as we are not emotionally involved and we are aware of the traps that the collectors will use to tangle you in their web.

We can assist you with this.  Before making any payments let our team of experts give you a FREE credit analysis and a plan of action.

We are here to help.  Please contact us at 702-686-8218

For your credit assessment contact me at dwest@740creditnow.com

Sorry, that last just slipped out.  I have as many referrals come from broker’s whose clients are denied because of lack of credit or payment history as I am for “credit restoration”.

Many people are also looking to re-establish credit after a bankruptcy, short-sale or divorce or short-sale.

Yikes, so where do you start when nobody is willing to take a chance on you?  As anyone that hasn’t been living under a rock for the last 5 years can attest everything we used to think we knew about credit no longer exists.  We will pause here while this sinks in…continue when ready.

It’s a good thing that I have been doing this for long enough to have learned a thing or two.  Yes, even getting the “starter” store credit card is crap shoot and one that has very little chance of succeeding. I never recommend that clients have store credit cards anyway unless they have them when they enter my program.  They usually have higher interest rates, they can be used at only one place and little known fact, but they don’t appear to garner as many points as “bank issued” credit cards.

There are several different types of credit but for our purposes and for most people we are looking for installment loans and revolving credit trade lines.

Examples of installment loans would be a car, mortgage, furniture purchase (unless on a store credit card), payday loans (eek!) and a personal loan.  These are loans which have a fixed interest rate and have a set monthly payment.

Examples of revolving credit are credit cards or perhaps a HELOC or line of credit where the interest rate is set but your payment amount depends upon the amount that is outstanding at the time of the statement date.

Every person should have both.  I am not advocating for going out and applying for every loan possible…in fact the exact opposite is true.  However, it is important to know that many people that have lived “off the grid” and not thought much about their credit or established credit… these same people are usually surprised to see that when they receive their credit report it is nearly made up of entirely negative accounts.  This is because early on creditors realized that in order to collect monies from you, they could use the whole “pay or we’ll ruin your credit” gambit and people usually paid (whether their account or whether accurate or not).  The other problem for those that have been very lucky and never owed a debt is that there is simply not enough information to provide the FICO scoring models enough data to generate a score for you, so a lender simply cannot make a sound judgement for a high ticket item.  (Yes, your utility provider will place your account on your credit report if you move and forget to pay your last bill, but they don’t put the 15 years of on-time payments on your credit report!)  Definitely wrong, (on so many levels) but there it is.  The system is broken so we have to work within it.

Generally, I have discovered that it takes at least 4 current trade-lines (preferably positive) to generate a FICO score.

Now, you may be asking what are your options?

Well, there are a few.  It used to be quite simple.  Walk into the GAP or JC Penney’s and they would fall over themselves to give you a credit card.  Another option, visit a college campus.  No job, no problem.  As you have probably realized the world and credit have changed a bit.  No longer are credit card companies allowed to solicit on college campuses and apply for credit for that extra 10% off on your initial purchase at your own risk.  These are no longer considered “starter cards”.

Instead the reality, as hard as it is to swallow may be…(gulp) the secured card, the authorized user, the secured line of credit or the dreaded, absolutely last option “sub-prime” credit card lender.

How do they stack up against each other, you ask?  And a darn good question indeed.

Well let’s start with the obvious a credit card – without a co-signer the chances of someone with no credit getting an unsecured card from a bank are credit union are somewhere around the chances of me being picked for “America’s Next Top Model”.  Although it could happen (in an alternate universe where everyone drinks copious amounts of alcohol and fashion is designed for 5’4″ women) it is highly unlikely. So your options for a credit card come down to these: secured, authorized user, or sub-prime.

Although secured credit cards do not garner as many points in your FICO scoring model, consider this “training wheels” for how to responsibly use credit.  After all, it is your money.  Once it is your money and not some faceless bank (or the millions of taxpayers that bail it out) it becomes a little more real.  We will talk about the best use of credit cards to garner points in another post.  This is my recommendation for all clients starting out.  If you keep in mind that credit was never meant to be used for “I want” purchases you can start to use credit wisely.

Second is the “Authorized User”.  Although in 2009 FICO was to role out a new scoring system FICO 08 (in ’09) but alas, I have yet to see any of the lenders that I work with using it.  This would have severely limited the use of the “authorized user” ability for persons trying to establish credit.  My thoughts are these with regards to “authorized user” accounts… for a child it is a great way for them to begin using and understanding credit.  For a spouse that may not have their own credit again, a good way to begin using and understanding credit.  The thing that people need to keep in mind is that if you are an authorized user on an account, your payment history will be exactly that of the primary card holder.  Therefore, if they go skiing and run into a tree and miss a payment it is going to show on your report, too.  Guess what?  The bureaus don’t care that you are only and authorized user.  So use this option wisely.

A third option may be a secured line of credit or a secured CD offered by many banks and credit unions.  These report as installment loans on your credit report and as we said earlier you should have a mix of both installment and revolving credit lines. My understanding is that it works much like a secured credit card except that you place the money into a CD or line of credit and borrow against the money.  You pay the money back monthly, therefore establishing a positive payment history (right?…on time payments required).

And last and certainly least is the “sub-prime” credit card.  Now I know that they serve a purpose…opening doors for b&e crews, drinking games at parties (or so I’ve been told) etc.  However, I find little use for them for people that are serious about establishing credit.  Many have avoided restrictions imposed by the Credit Card Consumer Bill of Rights and the C.A.R.D. Act by raising their interest rates (some as high as 79.9%), doing away with grace periods, etc..  I find that although they may many times be easier to acquire the penalties are severe so I don’t recommend these unless you have a full understanding of how credit cards work.

Okay, so those are several options to start to establish trade lines (just the minimum) so that you can at least generate a score, just in case you decide one day to purchase a home, car or any other high dollar item.

For this and other strategies for building positive credit, contact us at 702-686-8218 or by email any time.

For your credit assesment contact me at dwest@740creditnow.com

So, we learned a lesson then right? WRONG!  We made an even bigger mess this time with our “American Dream”.  Now, I know that this is news to no-one but there is one question that I truly would love to have anyone answer for me…and that is who do you have to kill or anything else to get a Loan Modification these days? Seriously?

I have clients who have come to me with a common story that I believed what just simply miscommunication between them and their banker…UNTIL

That’s right.  It happened to a member of my own family.  Now, I know that many people look at the declining values of their homes and decide “hey, I don’t want to pay this amount anymore so I am going to ask for a loan modification”.  That is not what loan modifications were intended for and understandably I can see where the banks would be vigilant when granting this.  However, this was not the case with my Daddy.

My daddy is one of the all-time great guys.  I know little girls always think that, but he really is.  And he and his wife have always been very responsible and they were living the “American Dream”. Then about 4 years ago, right in the middle of the storm, my little brother (almost 40 now, but still my baby bro) got cancer.  He is fine now, but he went through all of the awful stuff you go through.  My parents helped emotionally, financially and every other way that a parent would.  He got back on his feet, back to his good job and is doing well again, but remember what I spoke of in an earlier post about medical bills.

So, we are thinking “whew” close but everyone still on their feet.  My daddy had a good but very physical job and about a year after my brother I get a call from my sister that my daddy has had a stroke on the job.  Now, before you think the worst, he got medical help immediately and he is doing great, but he can no longer do that very physical job he did.  His company is wonderful, he has been there approximately 25 years, but now he is behind a desk.  With that came a severe reduction in wages not to mention the time off from the stroke itself.

Okay, so they are still making their payments.  They have lived in their house for almost 15 years, made dozens of improvements, love the area, but because of both my brother’s and my daddy’s illnesses, they are just barely making ends meet.

So they listen to the advertisements about how easy it is to get a loan modification and they go to their bank C#^$E and meet with their banker to discuss a loan modification.  They are immediately told that they can’t have one until they are at least 2 payments behind (seriously someone told them that).  This is so against my daddy’s nature that it is almost physically painful, but this is what they are told to do, by the bank no less.  Then after those 2 months they are given paperwork for which they have to hire a u-haul to take it home and start supplying to the bank, papers going back to and including grade school report cards and the family tree for at least 6 generations (he’s from AR, that part didn’t take long).  All of the other crap paperwork takes approximately 6 months during which they are given a “temporary payment amount” (have you seen this little piece of b.s.?) which they pay, then at the end of that 6 months they are denied because they were making the payments up until the time they were told to stop.  I feel like Alice down the rabbit hole.  Anybody else think this is insanity?

I am seriously about to have a stroke writing this.  Of all of the stupid, moronic, boneheaded, etc, etc people the banking institutions are by far right at the top.

Now, their credit is crap (dropped nearly 100 pts).  Why you ask?  Well, 2 missed payments will be harsh, but it was the 6 months of the temporary payments that the bank told them to make!!!! Because it wasn’t the full payment from the original amount they just simply counted it as late.

Now the bank now has an empty house that can’t be bought for what the loan could have been modified for.  You had a buyer with 15 years in the home without missing a payment until you told them to you boneheads, and you have ruined their credit so that they can’t get a loan through you again.  The home was eventually sold through a short-sale, but had it sat any longer I don’t know what the outcome would have been.

So, I ask the question again. Who do you have to kill or anything else to get a loan mod around here?

If you need this question answered or you need help mitigating damage done after a failed loan modification attempt, we are here to assist you.

For a credit assessment you can contact me at dwest@740creditnow.com

So what are some of the things that people do with good intentions that net bad results?

1. You do what everyone is doing these days and you order a copy of your credit report…YIKES!!!  There’s a $36 bill from ABC Collection Co from 6 years ago that you don’t even remember.

So being the responsible person that you are, you pay it because who wants a collection account on their credit report???  Hmmm?  Now it would seem logical that that would be the end of the story, you breathe a sigh of relief, you just know your scores have gone up and you couldn’t feel better.

2.  You have a couple of credit cards… one is a MonkeyMan Clothing with a limit of $200.  You have only gone over the limit a couple of times, but you always pay before the due date (well except that one time but the amount was only $13) and usually for more than the minimum amount because that is what you have been told to do.  The other is a $500 secured credit card from XYZ bank with an outrageous interest rate but in 2 years it will go to an unsecured status if you show a good usage history.  You have never gone over the limit on this one and are always careful to make at least a payment and a half.

3.  You spent some time out of work because it is seasonal, and decided to see if you could make some settlements on some of your old debts.  You have been paying them, but you have been told that if you threaten to stop or do stop they will take a settlement (after all this is what most “debt settlement” or “debt consolidation” companies do so it must work).  It does (or does it?).  You settle 3 installment accounts for pennies on the dollar, Yippee!

So you spend countless hours on the phone combing through your credit report trying to get your finances under control.  You have done everything that the “so-called” financial experts have said to do and now it is time to pull your credit report again.

Oh, my… I can hardly stand the excitement!  Drum roll please ….WHAT THE #%&!!!!! Your score has dropped by nearly 100 points.  That can’t be right!!!

I would love to know what you, the reader, might think went right or wrong.  I will be back with the answers in a follow up.

However, if this story describes you, don’t wait! We are here to help!

For a credit assessment you can contact me at dwest@740creditnow.com

Yes, boys and girls, these are the things (lower case, not italicized) of which I speak.  These are the things that provide stability, security and that warm and fuzzy feeling that we all strive for.  Even the most jaded of people out there know of which I speak.

The one thing that cannot be bought is “peace of mind”.  It can, however, be achieved.

So, to our topic…does bad credit only impact your ability to get a loan?  The short answer “NO“

Some of the things that having good or bad credit affect… insurance rates (both auto and home), renters, health and life.  Ability to get a job in fields such as security, law enforcement, government, banking, education, real estate and the list goes on.  Approval for rentals for an apartment (very much in need in today’s market) or rental home.  Emergency repairs on an automobile.  Doctor’s visits.

There are many other items that are affected by negative credit that I am certain that I have failed to mention.  I am also certain that my readers will let me know what they are and I welcome those insights.

However, I am going to go out in a limb and say that the number one 1 UNO reason that I recommend for improving your credit score (that pesky little 3 digit number) is “PEACE OF MIND”.  It’s being able to know that if the unthinkable happens, you have the ability, financially to handle it.

Let us help you reach your goals.  We are here to help!

For a credit assessment you can contact me at dwest@740creditnow.com

Now, you didn’t really think there was a straight answer to anything having to do with your credit score, did you?  The truth is that there are some rules that can help you know the answer to that.

First, did you pay the debt? (That is assuming that it was in fact your debt…which is NOT always the case as we have seen) If so, the creditor has no reason to report the paid debt to the 3 major reporting bureaus unless you ask them to do so.  Why would you ask them to do so?  Not all reported debt is bad.  For instance your 5 years of on-time car payments should be reported and stay on your report FOREVER.  So as we see, some debts should be reported.  More on this in another post.

Okay, you didn’t pay the debt, either because you didn’t know about it or you weren’t able to pay it at the time.  Most people, if asked will tell you that bad credit has to remain on your credit report for 7 years with a couple of exceptions (Chapter 7 BK or Tax debt).

Pssst, I am going to let you in on a secret, there is no law or statute that states that adverse credit MUST remain on your credit report for 7 years.  That is simply the longest time that it can be reported.  Naturally, a creditor or collection company is going to say whatever is necessary to get money from you, so as stories of Santa Claus and the Toothfairy have become “truth” for some, so has this misinformation.

Now, back to our question.  Maybe you really do owe the debt but you are able to show that it was misreported. Under the FCRA it must be legally and permanently removed.  Yeah!!!….but wait.  Just because it is not on your credit report, does not mean that it does not exist.

Other factors can play into whether or not you MUST pay a debt, such as your state’s statute of limitations.  But, it’s always best to take recent debt, especially less than 2 years old, and try to make arrangements for payment in exchange for removal of the item from your credit report.

Remember that just because you got it removed from a bureau report, the creditor usually has a longer memory.

We’d love to help you with these and any other credit issues.

For a credit assessment you can contact me at dwest@740creditnow.com