College campuses are swamped by credit card companies trying to get students to sign up for credit cards. Whether the college kids need it or not, the credit card companies dangle freebies and incentives to get them to sign. College kids succumb to temptation easily and sign up without thinking long term. They are soft targets for the credit card companies.
The fact is that most college students don’t need a credit card. I went through college never needing one. I know times have changed, but the basic facts have not. The only time I needed a credit card was when I was working for a company and had to go for a company trip. So my first credit card came almost 1 year after I was working and that too because of a “need”.
College kids have a pressing “need’ to have a credit card. As it is they have very little money. To dangle more money in front of them is asking for trouble. Obviously, they are going to overspend because there is much less thought to long term and more to instant pleasure. Life’s realities have not yet taken hold and they think the party will go on for ever. Most college kids honestly believe that credit card money is “free money”. Truly, college kids are a very ‘high risk’ group. Then why are credit card companies targeting them?
Several reasons. Not only are college students gullible but they know that young people tend to run up huge bills very quickly. If the college student cannot pay then the credit card companies know that they can go after their parents, who are more than happy to help because it is their child after all that is in trouble. It is this indirect assault on parent’s pocket book that credit card companies are counting on. And they also love the fact that college students will hide the bad news as long as they can, thereby running up huge finance charges and other fees. A win-win situation for credit card companies. They love a consumer who spends without regard and runs up HUGE fees. What more could they ask for?
Why do college campuses allow credit card companies to prey on college students? Simple answer ‘easy money’ & ‘greed’. College campuses forget that they are educators. It seems when credit card companies come calling with their lure of big advertising money, most campuses give in as harmless venture. After all, it doesn’t affect the college funds; and the colleges put it on ‘personal responsibility’.
I think most campuses will be better served by guarding their college students from credit card companies. It is teaching several bad lessons to the students. For one, the campus greed for advertising money from credit card companies teaches the student that ‘greed’ at any cost is good. Once they have access to credit cards, it teaches the student that being reckless spenders is in style.
Both are very bad precedents. If campuses give access to credit card companies then they should require them to fund ‘responsible spending’ classes where they teach the students the many perils of credit card abuse. Teach then that not all credit cards are created equal and if they have to have one then how to compare. How to check the fine print? How to look at comparison tables like the one at ‘Look up Credit Cards’ dot com? How to assess which credit card suits them and costs them the least in the long run? That it is not ‘free money’ but giving away your future savings.
Freedom has a price. The credit card companies should be required to fund teaching the college students the ‘freedom of having credit cards’ and how to act smartly. After all, the habits that they develop at college are going to stay with them for a long time. And it is time we help the college students get the right education!
Tuesday, September 4, 2007
Questions to Ask a Credit Repair Firm Before you Sign On
Not a day goes by that people with poor credit histories are not approached in some way by firms that promise that, for a fee, they can help repair damaged credit. Many of those firms promise far more than they can deliver. You can protect yourself from false claims by understanding what can and cannot be done to repair your credit. This article suggests that you ask several questions before getting involved with a credit repair firm.
Ask if the firm can remove a bankruptcy from your credit report. The truth is that, while in some rare cases, bankruptcy can be removed, it is unlikely. Furthermore, a bankruptcy has little impact on the credit score after two-years especially if one has worked hard to restore credit by meeting all financial obligations in a timely manner.
Ask if the firm bills you prior to performing services. If they do that firm is in violation of the law and should not be trusted to do what they promise to do for you.
Ask if you can repair your own credit without their help. If they tell you no they are in violation of the law. In fact, you can do what any credit repair firm does as a do-it-yourself project.
Ask who contacts the credit bureaus. If the credit repair firm warns you about contacting the credit bureaus on your own, they are misleading you. Watch out. You are not only entitled to contact the credit bureaus on your own, you are penalized every time an outside inquiry is made. When you make a consumer inquiry, however, there is no FICO inquiry penalty to your credit score.
Ask if you should obtain a new SSN or apply for an FEIN to skirt around the system. If a credit repair company suggests that you create a new identity by obtaining a new social security number or forming a corporation and obtaining a FEIN number as a way around a poor credit score – run away! You are being advised to break the law, to commit a felony. You will be caught and you will be prosecuted in federal court. It is not worth the risk.
Ask if the credit repair company disputes all items on your credit report or if they are selective in what they will or will not dispute. If they use the scrambled eggs against the wall technique of disputing everything hoping that something sticks on the wall, they are doing you a disservice. Not only will disputing everything send up red flags at the credit bureaus, it will damage your efforts to challenge or appeal decisions that are made by the credit bureau that are not initially in your favor.
Ask if the firm can remove a bankruptcy from your credit report. The truth is that, while in some rare cases, bankruptcy can be removed, it is unlikely. Furthermore, a bankruptcy has little impact on the credit score after two-years especially if one has worked hard to restore credit by meeting all financial obligations in a timely manner.
Ask if the firm bills you prior to performing services. If they do that firm is in violation of the law and should not be trusted to do what they promise to do for you.
Ask if you can repair your own credit without their help. If they tell you no they are in violation of the law. In fact, you can do what any credit repair firm does as a do-it-yourself project.
Ask who contacts the credit bureaus. If the credit repair firm warns you about contacting the credit bureaus on your own, they are misleading you. Watch out. You are not only entitled to contact the credit bureaus on your own, you are penalized every time an outside inquiry is made. When you make a consumer inquiry, however, there is no FICO inquiry penalty to your credit score.
Ask if you should obtain a new SSN or apply for an FEIN to skirt around the system. If a credit repair company suggests that you create a new identity by obtaining a new social security number or forming a corporation and obtaining a FEIN number as a way around a poor credit score – run away! You are being advised to break the law, to commit a felony. You will be caught and you will be prosecuted in federal court. It is not worth the risk.
Ask if the credit repair company disputes all items on your credit report or if they are selective in what they will or will not dispute. If they use the scrambled eggs against the wall technique of disputing everything hoping that something sticks on the wall, they are doing you a disservice. Not only will disputing everything send up red flags at the credit bureaus, it will damage your efforts to challenge or appeal decisions that are made by the credit bureau that are not initially in your favor.
How To Remove Collection Accounts From Your Credit Report
Collection accounts can remain on your credit report for 7 years from the date of the initial missed payment that led to the collection (the original delinquency date).
If you haven't paid your collection account yet, negotiate with the collection agency. Let them know that you plan to pay them off. You can try to negotiate less than the full amount if you want. The important thing is getting them to agree to remove the item from your credit report. It’s wise to get this agreement in writing before submitting your payment.
If you've paid a collection account in full and the item remains on your report. You will want to dispute the item with the credit bureaus by mail. When a collection account is paid in full, it will be marked "paid collection" on the credit report. It is NOT removed from your report and is still considered a negative account. For this reason, you want to have the account removed from your credit report.
Always remember that the burden of proof is on the credit bureaus. You have nothing to prove to them. They have to prove to YOU that the account is yours. Simply dispute by stating something like "Please provide documentation that the following account belongs on my credit report and that my rights have not been violated; otherwise please delete this damaging data immediately." That’s all you need to say. One line. The credit bureaus then must conduct an investigation; they have 30 days to do so. If the collection agency can’t verify the account (most of the time they can’t), then they must remove the collection account from your credit report.
If you haven't paid your collection account yet, negotiate with the collection agency. Let them know that you plan to pay them off. You can try to negotiate less than the full amount if you want. The important thing is getting them to agree to remove the item from your credit report. It’s wise to get this agreement in writing before submitting your payment.
If you've paid a collection account in full and the item remains on your report. You will want to dispute the item with the credit bureaus by mail. When a collection account is paid in full, it will be marked "paid collection" on the credit report. It is NOT removed from your report and is still considered a negative account. For this reason, you want to have the account removed from your credit report.
Always remember that the burden of proof is on the credit bureaus. You have nothing to prove to them. They have to prove to YOU that the account is yours. Simply dispute by stating something like "Please provide documentation that the following account belongs on my credit report and that my rights have not been violated; otherwise please delete this damaging data immediately." That’s all you need to say. One line. The credit bureaus then must conduct an investigation; they have 30 days to do so. If the collection agency can’t verify the account (most of the time they can’t), then they must remove the collection account from your credit report.
Be Realistic about Repairing Your Credit
In my work I speak to many people that have unrealistic, almost grandiose, ideas about repairing their credit. My response to the person whose expectations exceed the limits of the possible is to send them to someone else. One of the factors contributing to damaged credit in the first instance is that attention is not paid to the possible allowing grandiose ideas to stand in the way of sound financial planning.
When working to repair one’s credit there are three factors that must be considered. First, is the item you would like removed from your credit report legitimate? If it is it will generally stay a part of your report until time takes care of the item. Secondly, how old is the item you would like removed? The further away from the present the item is the less it impacts your FICO score. Finally, what has your credit history been in the past 12 to 18 months? If potential creditors see a pattern of on time payments and sound financial practices, it is more likely that they will offer additional or new credit even if your score remains somewhat damaged.
Credit repair consists of two important stages, both of which mirror the concerns mentioned above. The first stage is to work to remove inaccurate or mistaken information from one’s credit report that have an adverse impact on one’s credit score. Some items may look bad but have little effect on one’s overall score. A tax lien, for example, that has been discharged may continue to appear on one’s credit report for up to ten-years and, under some circumstances, even longer. But that discharged lien has a low impact on one’s overall score and may not be worth the effort to try and remove it. A pattern of late payments, on the other hand, may have a high impact on one’s score and may well be worth the effort to remove or re-age if removal is impossible.
The second stage in credit repair is to make sure that from the moment one begins to actively repair one’s credit that no additional adverse be recorded on the credit report. Not only does that defeat the purpose of the credit repair effort, it sends up red flags for the credit bureaus to not take your repair efforts seriously. That is the last thing one wants when working to restore one’s credit score to acceptable numbers. This stage requires a change in lifestyle, as one must relearn sound fiscal habits that will assure no additional adverse information be recorded by the credit bureaus.
Effective credit repair seeks to eliminate inaccurate, mistaken and unverifiable adverse information from one’s credit report. It cannot remove items that are legitimate, verifiable and true. To claim otherwise is unethical and may even be illegal.
When working to repair one’s credit there are three factors that must be considered. First, is the item you would like removed from your credit report legitimate? If it is it will generally stay a part of your report until time takes care of the item. Secondly, how old is the item you would like removed? The further away from the present the item is the less it impacts your FICO score. Finally, what has your credit history been in the past 12 to 18 months? If potential creditors see a pattern of on time payments and sound financial practices, it is more likely that they will offer additional or new credit even if your score remains somewhat damaged.
Credit repair consists of two important stages, both of which mirror the concerns mentioned above. The first stage is to work to remove inaccurate or mistaken information from one’s credit report that have an adverse impact on one’s credit score. Some items may look bad but have little effect on one’s overall score. A tax lien, for example, that has been discharged may continue to appear on one’s credit report for up to ten-years and, under some circumstances, even longer. But that discharged lien has a low impact on one’s overall score and may not be worth the effort to try and remove it. A pattern of late payments, on the other hand, may have a high impact on one’s score and may well be worth the effort to remove or re-age if removal is impossible.
The second stage in credit repair is to make sure that from the moment one begins to actively repair one’s credit that no additional adverse be recorded on the credit report. Not only does that defeat the purpose of the credit repair effort, it sends up red flags for the credit bureaus to not take your repair efforts seriously. That is the last thing one wants when working to restore one’s credit score to acceptable numbers. This stage requires a change in lifestyle, as one must relearn sound fiscal habits that will assure no additional adverse information be recorded by the credit bureaus.
Effective credit repair seeks to eliminate inaccurate, mistaken and unverifiable adverse information from one’s credit report. It cannot remove items that are legitimate, verifiable and true. To claim otherwise is unethical and may even be illegal.
Credit Repair After Bankruptcy
Credit repair after bankruptcy is not only possible, it's critical for the individual to accomplish or they will continue to only barley keep their heads above water. There are a certain number of law firms that specialize in credit repair, for any reason, credit repair after bankruptcy is just one of many. Another important aspect of credit repair after bankruptcy is to review your credit report very carefully, remembering not to overlook anything.
According to legal experts, credit repair after bankruptcy is possible. Credit repair after bankruptcy or after any event which damages one's credit rating, is not free. Learning how to repair bad credit may seem like a very daunting task for anyone because of the many terms and tasks involved. Anyone who thinks credit repair after bankruptcy will be easy is kidding themselves.
The experts recommend that before you make any major purchase (whether or not you have a past bankruptcy) credit repair may be beneficial. So start credit repair after bankruptcy as soon as possible and you will soon discover the benefits of a good credit rating. Some companies will offer credit immediately after bankruptcy, at very high interest rates, but buying a home or a car may not be possible for several years.
Once you have filed for bankruptcy, you will need to be very careful about how you handle your money in the future. For example, many people have to get credit repair help from a credit repair company when they have more than a certain amount of money in credit card, or any other debt. To borrow again, you need to prove that you can handle money, and the best way to do that is to show that you have some savings and skill with handling money.
According to legal experts, credit repair after bankruptcy is possible. Bankruptcy should be used as a last resort since credit repair after bankruptcy is extremely difficult to do, despite the fact that it seems to solve the initial problem of paying back creditors.
According to legal experts, credit repair after bankruptcy is possible. Credit repair after bankruptcy or after any event which damages one's credit rating, is not free. Learning how to repair bad credit may seem like a very daunting task for anyone because of the many terms and tasks involved. Anyone who thinks credit repair after bankruptcy will be easy is kidding themselves.
The experts recommend that before you make any major purchase (whether or not you have a past bankruptcy) credit repair may be beneficial. So start credit repair after bankruptcy as soon as possible and you will soon discover the benefits of a good credit rating. Some companies will offer credit immediately after bankruptcy, at very high interest rates, but buying a home or a car may not be possible for several years.
Once you have filed for bankruptcy, you will need to be very careful about how you handle your money in the future. For example, many people have to get credit repair help from a credit repair company when they have more than a certain amount of money in credit card, or any other debt. To borrow again, you need to prove that you can handle money, and the best way to do that is to show that you have some savings and skill with handling money.
According to legal experts, credit repair after bankruptcy is possible. Bankruptcy should be used as a last resort since credit repair after bankruptcy is extremely difficult to do, despite the fact that it seems to solve the initial problem of paying back creditors.
How to Remove a Judgment from Your Credit Report
Being sued by a debt collector can be very intimidating. If you are being sued, never let a default judgment be entered. You have nothing to lose by disputing the validity of the judgment or even settling it out of court to avoid that nasty record landing on your credit reports.
The statute of limitations (SOL) on judgments is very long; usually 12 to 20 years. More and more collection agencies are starting to seek litigation simply for the fact that judgments are renewable. Once they get a judgment, it may be renewed if the creditor files a new suit seeking to renew the judgment prior to the expiration of the original judgment) therefore, technically, a judgment could follow you around for life.
Even if you pay a judgment you will be stuck with a 'satisfied judgment" for 7 years from date satisfied not filed! This can be a hopeless situation so avoid being sued at all costs!
However, if you already have a judgments reporting on your credit report, there are ways to have them removed. There are many strategies and options one could use to remove a judgment from their credit report. You have more rights and are protected by more federal and states laws than I could ever write about in one article. The most common is disputing it with the credit bureaus. Another way is simple to negotiate with the creditor. Many people use “pay for delete” letters when negotiating. It’s always important to get the agreement between you and the creditor in writing as once you have paid; they have no other motivation to remove it from your credit report.
The statute of limitations (SOL) on judgments is very long; usually 12 to 20 years. More and more collection agencies are starting to seek litigation simply for the fact that judgments are renewable. Once they get a judgment, it may be renewed if the creditor files a new suit seeking to renew the judgment prior to the expiration of the original judgment) therefore, technically, a judgment could follow you around for life.
Even if you pay a judgment you will be stuck with a 'satisfied judgment" for 7 years from date satisfied not filed! This can be a hopeless situation so avoid being sued at all costs!
However, if you already have a judgments reporting on your credit report, there are ways to have them removed. There are many strategies and options one could use to remove a judgment from their credit report. You have more rights and are protected by more federal and states laws than I could ever write about in one article. The most common is disputing it with the credit bureaus. Another way is simple to negotiate with the creditor. Many people use “pay for delete” letters when negotiating. It’s always important to get the agreement between you and the creditor in writing as once you have paid; they have no other motivation to remove it from your credit report.
3 Ways To Effectively Use Interest Free Credit Cards
Interest free credits cards really refer to cards that offer an interest free introductory period. This interest free term can last anywhere from a couple of months to a full year. The most important thing about the interest free period is to not waste it. Use it to the best advantage, but make sure you pay your entire balance before the end of the interest free period. The worst thing you can do is end up paying interest on purchases when you didn't have to. Follows are three ways for consumers to make the most of the interest free credits cards in their pockets.
Large Purchases
If you need to make a substantial purchase you should consider using an interest free card for the purchase. Using this type of card for an expensive purchase, such as a new dishwasher or bedroom set, will help finance the purchase without costing you a lot in finance charges. In fact many stores offer no interest on purchases over a certain amount (usually a couple of hundred dollars) for a certain number of months. Always make sure that you can pay off the entire balance before the interest rate goes up or you will end up paying unnecessary finance charges.
Transfer Balances
The ability to transfer balances is the reason most people eagerly seek out interest free credit cards. Transferring balances from other high interest cards to no interest cards in order to more rapidly pay it off, is a good plan for getting out of debt. A word of caution, though, many credit card companies charge lofty fees for the privilege of an interest free payoff period so be sure to factor that fee in when considering which card to get.
Improve Your Credit Score
There are a couple of ways interest free credit cards can help improve your credit score. With the balance transfer, you'll get the chance to pay off debt which will raise your credit score. Also, having less of a balance on your other cards will make your score rise providing the interest free card doesn't have more than a fifty percent balance on it. Unfortunately it can be difficult to get a high credit limit (or balance transfer) on an interest free card if your credit isn't at least good. However if you have near excellent credit, this could be the push towards perfect that you need.
Large Purchases
If you need to make a substantial purchase you should consider using an interest free card for the purchase. Using this type of card for an expensive purchase, such as a new dishwasher or bedroom set, will help finance the purchase without costing you a lot in finance charges. In fact many stores offer no interest on purchases over a certain amount (usually a couple of hundred dollars) for a certain number of months. Always make sure that you can pay off the entire balance before the interest rate goes up or you will end up paying unnecessary finance charges.
Transfer Balances
The ability to transfer balances is the reason most people eagerly seek out interest free credit cards. Transferring balances from other high interest cards to no interest cards in order to more rapidly pay it off, is a good plan for getting out of debt. A word of caution, though, many credit card companies charge lofty fees for the privilege of an interest free payoff period so be sure to factor that fee in when considering which card to get.
Improve Your Credit Score
There are a couple of ways interest free credit cards can help improve your credit score. With the balance transfer, you'll get the chance to pay off debt which will raise your credit score. Also, having less of a balance on your other cards will make your score rise providing the interest free card doesn't have more than a fifty percent balance on it. Unfortunately it can be difficult to get a high credit limit (or balance transfer) on an interest free card if your credit isn't at least good. However if you have near excellent credit, this could be the push towards perfect that you need.
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