If you have collections on your credit report, there’s no doubt you just want them to go away. This is because they may be weighing down your credit score and preventing you from getting loans or qualifying for better interest rates. While we have some tips to help you remove collections from your credit report, you should know that it’s going to take time and effort on your part.
To understand the need to remove collections from your credit score, it is important to understand how collections come about. What are collections? When a debt isn’t paid, the creditor will turn it over to a collection agency or a debt collector in hopes of recouping the money. That action is then reported to the credit bureaus— Experian, Transunion, and Equifax.
Collection agencies will continue to report your collection account for seven years from the date you first fell behind with the original creditor. However, if it’s been seven years, the collection agency might still sue you to collect. But they can’t report it to the credit bureaus.
If your collection account has already dropped off your report, there’s no way to get it back on. However, if you pay off a collection and then re-default, that account could come back onto your credit reports (even if the original delinquency was outside the seven-year reporting period because the new late payment would create a new delinquency date.
If your collection account has over $2500, it can affect your credit report by at least 20-25 points.
The short answer is, Yes! According to Aaron Huebner, the executive director of Ascent Network, there are two keywords that you need to keep in mind as you try to remove collections from your credit report— Verify and Validate.
The federal government requires credit bureaus to provide correct information on each item on your credit report. They also have to make sure that the debt has not expired. Here is a case:
If the amount a collector is trying to collect from you is below $1000 and isn’t from a financial institution, you may have some success asking for proof of the debt. Why? Because the law requires collectors to provide proof of the debt if you ask for it within 30 days, and since the debt might have gone through so many collection agencies, they may not have the original documents, which will prompt them to remove the collection from your credit report.
Remove Collections from Your Credit Report( How to Do It)
For you to be successful, you have to do these three things:
? Check your credit report
? Check for errors in your credit report
? Choose an action plan
Check Credit Report
You have to check your credit account from AnnualCreditReport.com and review your credit reports to see if the information is correct. The report should show if the collection is paid or not, the remaining balance, the date you defaulted, and the original creditor.
Compare the information in the credit report against your records. You can check your payment records when you log in to the account listed if you don’t have the records. And know the statute of limitations for collecting debts in your state.
Dispute Any Inaccuracies
In case of an error on the part of the debt collector, ask them to validate the debt. You should dispute the collection within 30 days from the date the collector contacted you. If the collector can’t validate, the collection should be removed from your report. However, you must follow up to ensure they remove the collection from your credit report.
You should also dispute the collection if the debt is too old to be reported. The federal law in many states requires that any delinquent account should be removed after seven years. If you can still find a delinquency report showing up after seven years, you should file a dispute with the credit bureau that still shows it to have it removed.
Request for a Goodwill Deletion/ Pay for Delete
Have you been making regular on-time payments? If yes, the first step is to mail the collection agency and ask for a “goodwill deletion.” If you have been making regular on-time payments, mail the collection agency a “goodwill letter” and explains your situation. This goodwill letter should explain to the collection bureau that you are trying to buy a house and see if they can honor your request.
There is no guarantee that they will accept your request and if they do, be sure to follow up to ensure they have removed collection from your credit report.
Pay for delete often works if you’ve had only one collection on your credit history. The collector should comply if you pay in full and make a written request that they remove it from your credit reports.
When negotiating pay for delete, it is best to visit the credit collection agency and have the agreement in writing. You can negotiate to pay 30% of the money owed in exchange for deletion and then continue to pay the debt as per the agreement. Remember, a late payment on the debt will be reported as a new entry in your credit report.
Professionals have years of experience repairing credits and know the exact procedure to remove the collection from your report. A credit repair agency like The Ascent Network has for many years helped many improve their credit score, remove collections from their credit reports, and are thus best-suited to help you, should you feel the procedure involved is confusing.
It is possible to have collections reports removed from your credit report if you are keen enough. You have to ensure that the collection agency validates and verifies the collection report they have on you. Failure to which they will have to remove the collection from your credit report. We hope that the above information will help you improve your credit score, remove collection from your credit score, and ease your mind.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
When people are just starting out building their credit or want to improve their credit score, often the fastest way to get started is by becoming an authorized user on someone else’s credit card. An authorized user is a person who has permission from the primary account holder to use the account. While authorized users don’t have to make payments on most accounts, they can still take advantage of their share of the credit limit.
An authorized user is someone who is added to a credit card account by the primary cardholder. The primary cardholder is responsible for making payments on the account while you get the authorization to use the credit card.
For example, you have a credit card, and your son, Tom, wants to have his credit card. You can call your bank, ask for an additional card, and tell them that you want Tom as an authorized user. They will send you another credit card, which you can give to him.
Once Tom makes purchases using that card, the information about those purchases will show up in your credit report and in his credit report. That way, both you and Tom are responsible for the debts on that account.
An authorized user gets a credit card tied to the account but won’t make changes to the account. This means they don’t have the authority to add other authorized users or request a credit increase.
Authorized users are often spouses, children, or other family members of the primary cardholder. By adding an authorized user, the primary cardholder enables another person to purchase using the primary cardholder’s account.
Your credit history is built from many different aspects of your financial life, including:
? payments (both on time and late)
? credit limits
? account balances
? length of time the accounts have been open
? types of accounts (credit cards, student loans, mortgages, etc.)
? new lines of credit opened
When another person adds you as an authorized user to their account, you are given access to that card. All of the payment history and credit limits associated with it go onto your report. This helps you:
1. Build your credit in several ways. If the account has a long history of on-time payments and has a high credit limit compared to the balance on the card, it means a low utilization rate.
2. It helps you repair your credit. If you suffered bankruptcy or missed payments, being an authorized user helps you repair your credit as the on-time payments will reflect on your credit account
3. It helps you manage expenses. You only spend money on necessary items, so you don’t go over the limit. Married couples manage bills well when they are authorized users of each other’s cards. Thus, helping them manage their budget and reduce the credit utilization rate.
The cardholder also benefits from having an additional authorized user on their card. The cardholder will have to increase the overall credit limit. They will now be able to spend more than they would with just their accounts. This may reduce their credit utilization ratio, which may increase their FICO score.
Tip: To calculate the utilization rate, divide your total credit card balances by your total credit card limits.
The person who has the credit card is known as the primary cardholder. He can add you to his account by calling the card issuer and giving them your full name, date of birth, and Social Security number.
If the issuer approves you being added. After that, you should receive your credit card. A family member or an employer can add you as an authorized user by logging on to their online account and adding you or contacting the card issuer by phone.
To process this request, the primary cardholder will need:
? your name
? address
? date of birth
? social security number
The person who added you as an authorized user won’t be affected by your credit history. A credit card company looks at the credit of the primary account holder, not the authorized user. As long as the primary cardholder makes an on-time payment, your credit shouldn’t be affected.
The performance of an authorized user is not factored in when calculating the primary cardholder’s score. But just because it won’t hurt you doesn’t mean you shouldn’t be careful.
As much as you want to help others build their credit history or repair their credit, you have to take certain precautionary measures to maintain a good credit history. Below are some of the measures you should consider.
Avoid overspending
No matter who it is, the authorized user can do a lot of damage to the primary account holder if they get carried away with spending on their card. If that happens, it could cause enough added debt for the primary account holder to have trouble making their payments. And if they miss one payment, their score could plunge some points — enough to cause problems for both your credit scores.
Don’t let your authorized users keep too high a balance on their cards
That can hurt both your credit limit utilization rate and your FICO score. For example, if a card has a $5,000 limit and you spend $3,000 and add an authorized user who spends $1,500, you’re already carrying 50% of your limit in debt before you add them to your account. Ensure you only add an authorized user if you can stay on top of your finances.
Keep tabs on spending habits
To curb overspending and for this arrangement to work, it’s important that you keep tabs on the authorized users’ spending habits. Adding an authorized user makes it easy for someone to rack up debt and negatively affect your credit score.
The primary benefit of being an authorized user is that you have a credit card in your name that reports positive payment history to the three major credit bureaus, which helps you build good credit. This is especially valuable if you’re new to credit, are recovering from a poor financial situation, or want to improve your score.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
There are many reasons why people stop paying their debts. Some borrowers use credit cards irresponsibly and end up with huge outstanding balances they can’t afford to repay. Others suffer temporary financial setbacks, such as job loss or divorce, and fall behind on their bills. And some people have no intention of repaying their debts and simply stop making payments after receiving goods or services from creditors.
Despite your circumstances, it is important to learn about the statute of limitations. Determining the debt collection statute of limitations in your state is important if you have any outstanding debt that a creditor has not received payment on.
The statute of limitations is the amount of time each state allows creditors and collectors to sue consumers for payment on delinquent debts. Generally speaking, it begins when consumers fail to make their last payment.
Knowing this time limit is important because a collector cannot file a lawsuit against you to collect the debt after that time has passed. However, if you are sued for the debt and do not respond, the creditor may get a default judgment against you. It is up to you to prove that the debt is past the statute of limitations.
Once the statute of limitations expires, lenders can no longer sue you for unpaid debts in court. And once a debt has “expired,” it is considered “time-barred” and is no longer legally collectible. Even so, you may continue to receive collection calls after that date.
A statute of limitations varies depending on where you live and what type of debt you have, so it’s important to understand what these laws are in your state.
There are legal debt agreements, and each agreement has its own statute of limitations. The four types of legal agreements are:
• Written contract
• Oral contract
• Promissory agreement
• Open-ended agreement
A written contract is a signed agreement in writing which specifies you and the collection agency on loan terms. You can refer to this document in case of illegalities.
An oral contract is a verbal contract between the agency and the client. It is challenging to prove oral contracts in the courts as it will be your word against theirs.
A promissory agreement is an assurance you make to your creditor through a written promissory note to the creditor agreeing to pay back a debt. It includes the interest rate and period in which to handle the debt.
An open-ended agreement works where there is a revolving balance. A good example is in-store credits and credit cards, which you can borrow over and over. An account that only allows you to borrow once is not an open-ended account.
The length of the statute depends on a few factors. Some of these factors are:
State Laws
Most states have statutes of limitation ranging from three to six years, but some states have statutes that extend beyond six years.
Type of Debt Owed
Credit card debt and medical bills typically have shorter statutes than mortgage loans and car loans.
When Does the Clock Start Ticking?
The statute begins on the date of your last payment (the last activity date). If you make even a small partial payment toward your debt, you can reset your statute-of-limitations period because your last activity date will be later than it was before.
You are probably wondering how the statute of limitations affects your credit score. The good news is that it does not lengthen or shorten its time on your credit report.
You will get a negative report on your credit history after defaulting on your payment. The negative remark stays on your report for seven years or ten years, depending on the debt you took.
As time goes by, the negative report on your credit report will have less impact on your credit score. What this means is — you may have a good score despite having four-year-old delinquency on your credit report.
A statute of limitations only bars debtors from suing you but not from contacting you. Since you have a debt, you are required by law to pay the debt, and the debt collectors will continue contacting you to convince you to pay.
If your debt collector contacts you about a time-barred debt. Be extra careful about what you say to a collector. Anything you say or sign may revive the time-barred debt as they may take it as an acknowledgment that you owe them.
If you also agree to pay an old debt with a debt collector, you will have also revived, extended, or waived the debt.
The Bottom Line
Knowing how the law protects consumers helps you ease the pressure you may have whenever you have to deal with debt collectors. What you say or do in case of delinquency will be “used against you in the court of law.” Ascent Network is dedicated to helping debtors understand their rights while improving their credit scores.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
If you want to stay on top of your finances, a good credit score is essential. Your credit score
can help you qualify for loans, give you better interest rates and even get you a lower
insurance premium.
If your score is not looking good, It is worth taking the time to improve your number. Here are
seven things you can do that will help improve your credit score.
This is the first point that can’t go without mentioning. It is what gets most people on the
lower end of the score. If you want a good credit score, you need to pay all your bills on time.
This has the biggest impact on your overall rating.
Your credit utilization ratio (how much of your available credit you’re using) is another major
factor in your FICO score. Keeping your balances low will help improve your score in this
area. Avoid using more than 30 percent of each card limit each month.
The higher the balance in comparison to the limit, the more it can affect your score
negatively. Utilizing less than this amount will help keep your score up while paying down
balances. This means if you have $15,000 in available credit across several cards and use
more than $5,000 at any given time, it can hurt your score.
Every time someone pulls your credit report, it shows up as an “inquiry” and can lower your
score slightly. Credit inquiry doesn’t have a huge effect as long as you get the quotes within
30 days of each other. Doing so will limit the impact on your credit score. Also, ensure you
aren’t opening many new accounts or have more than six inquiries.
When applying for new credit cards or loans, get quotes within 30 days of each other. Doing
so will limit the impact on your credit score.
If you suspect unauthorized inquiries, dispute those errors. The fastest way to dispute
and boost your score is with the help of a credit expert like Ascent Network. Limit Inquiries
on Your Credit Report.
Paying off debts is a great way to improve your credit score or utilize debt consolidation
services. The lower the debt you have, the better your chances of improving your score.
You can also consolidate your debts into a single large debt with favorable interest rates and
payoff terms and pay them quickly. Focus on paying off your credit cards with the highest
interest rates first and, if possible, pay more than the minimum payment due.
Don’t close old accounts that you don’t use anymore. But rather keep them open and active
by using them once in a while. If they don’t have an annual fee, there’s no reason to close
them in order to improve your credit score.
If you have bad credit, you’re not alone. According to the Federal Reserve, more than half of
Americans have a credit score under 680.
It is very important to check your credit history at least thrice a year to know your credit
score. You will detect fraudulent activities since it is easy for criminals to open credit cards in
your name.
A secured credit card will help you manage your finances better since you will be required to
deposit some cash to open the account. Credit card companies will report your credit score
to credit bureaus as you keep using the secured credit account. So, be sure to make at least
minimum payments on time to improve your score.
What should you do to manage your finances and not default in repaying your debts? Organize: Make sure your files are in order, so it’s easy to find bills and statements needed to create a budget.
? Set goals: Determine what you want to accomplish, such as paying off debt or
building an emergency fund of three to six months’ living expenses.
? Create a budget: Figure out how much money comes in each month and where it
goes. You may need to cut back on spending money on unnecessary things until you
reach your goals.
? Build an emergency fund: This will help you pay debts even when you lose your job
or in the case of unexpected expenses. Have savings worth three to six months in
your emergency fund.
Key Takeaway
Credit scores are used by lenders as a way to predict how likely you are to repay the money
you borrow. The higher your score is, the more willing lenders will be to take a chance on
you. People with higher scores than yours are offered lower interest rates and better terms
on loans and credit cards. It is best to take charge and improve your credit score to enjoy the
benefits.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network
a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is
available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho
Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
If you have one or more credit cards, you probably have a credit score. This is a number that summarizes your credit history, and it’s based on the information in your credit reports (the detailed records that creditors keep about how much you borrow and how well you repay). There are several different types of credit scores, but most major lenders use the FICO scoring system. You get a score, generally between 300 and 850, from each of the three major consumer credit bureaus:
Experian, Equifax, and TransUnion. The higher your score, the better your credit looks to lenders. And, the better your credit looks to lenders, the more likely they are to offer you lower interest rates when you need to borrow money
A credit score is an indicator of the likelihood that you will pay your debt obligations. Your score is derived from information contained in your credit report. The higher the number (700-850), the better your score.
Lenders use this number to determine whether they want to extend a loan to you and at what interest rate.
Given that your score may not be good, you may be wondering: How can I improve my credit score in 2022? Is there a way to repair the damage and get you to the good books?
It is important to get a copy of your credit report to ensure it is accurate. If you find any inaccuracies (like a suspicious credit account you didn’t open), dispute such fraudulent activities with the appropriate credit bureaus to have them removed.
The best way to do this is through AnnualCreditReport.com. You can get one free copy annually from all three major reporting agencies (Equifax, Experian, and TransUnion).
You can also consider ordering a copy every few months since one agency may have information that another doesn’t. This way, you can monitor your progress as you work to raise your score.
If there are negative marks in your history that are valid, it is still possible to raise your score over time. You will need to be proactive and responsible in managing your debt going forward. What are things you can do to improve your credit score?
Consider a balance transfer
If you’re carrying a lot of debt and you are wondering about how to improve your credit score in 30 days, then paying off your debts should be your top priority. You might want to consider a balance transfer card that charges no interest for a period of time, allowing you to pay down debt faster.
Lower your credit utilization ratio
One easy way to improve your score is to lower your credit utilization ratio (the percentage of your total credit limit you have used). If you can get it below 30%, that’s a great start. But if you can reduce it further, such as by paying off some debt or asking for an increase in your limit, do so and watch your score climb even more.
Limit your credit card application
It’s best not to apply for new cards unless there’s a good reason, such as better terms on a balance transfer or a rewards rate. Applying for multiple cards at once can be seen as a negative. It suggests someone desperate for money. Instead, apply only when you have a good chance of approval.
To improve your credit score:
Pay bills on time
If you want to get your score moving in the right direction, take care of every little detail, especially your bills! Since bills might slip your mind at times, set up autopay on your credit accounts. This helps you stay on course even when you may be too busy to remember.
Become an authorized user
A close friend or family member can add you as an authorized user on their cards. You don’t need to have a card. This enables you to raise your score. However, ensure the cardholder uses the card responsibly so your score doesn’t sink any further.
Consolidate your debts
Consolidating all your debts into one monthly payment can help improve your credit because you are making only one payment. For example, if you have five loans with different due dates, it’s easy to forget to pay one or confuse the due dates.
Not only does consolidation help simplify monthly payments and make them easier to manage, but it also helps prevent late payment charges, which lower your score. The longer you make payments on time, the better the effect is on your credit history.
Do not close old accounts
Lenders favor old credit account holders. This is because your credit card gives them a detailed history of how you pay your debts. Closing credit cards while still having balances on other credit cards negatively impacts your credit score. This could knock off a few points because of the increase in your credit utilization ratio.
Lower insurance premiums: Companies that offer home and auto insurance often base their premiums on an applicant’s credit score. The better your credit, the less you may have to pay for insurance.
Easier time finding a place to live: Many landlords check prospective tenants’ credit scores as part of the application process. If they see something they don’t like, they might not approve your rental application.
Lower loan rates: If you’re getting a mortgage, car loan, or any other type of loan, a poor credit history could increase the amount you pay in interest and fees or prevent you from getting approved altogether.
Better employment prospects: Some employers pull applicants’ credit reports as part of their background checks. If your report shows you are poor in managing your finances, they will not trust you with their jobs.
Negotiate for better interest rates: Banks are happy to offer you loans when you have a good credit score. Banks and credit companies are always on the lookout to find borrowers with good credit scores. This puts you in a position to negotiate for better interest rates. You will also obtain a mortgage with more favorable terms.
Credit scores matter. Even a difference of a few points on your credit score makes a big difference in the interest rate you pay when you borrow money. A high credit score lets you take advantage of better credit card offers and gets more attractive deals on mortgage, car loans, and insurance.
Because a good score saves you so much money, it’s worth taking steps to improve a poor credit score over time.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
If you have collections on your credit report, there’s no doubt you just want them to go away. This is because they may be weighing down your credit score and preventing you from getting loans or qualifying for better interest rates. While we have some tips to help you remove collections from your credit report, … Continued
Read MoreWhat is an Authorized User? An authorized user is someone who is added to a credit card account by the primary cardholder. The primary cardholder is responsible for making payments on the account while you get the authorization to use the credit card. For example, you have a credit card, and your son, Tom, wants … Continued
Read MoreThere are many reasons why people stop paying their debts. Some borrowers use credit cards irresponsibly and end up with huge outstanding balances they can’t afford to repay. Others suffer temporary financial setbacks, such as job loss or divorce, and fall behind on their bills. And some people have no intention of repaying their debts … Continued
Read MoreIf you want to stay on top of your finances, a good credit score is essential. Your credit score can help you qualify for loans, give you better interest rates and even get you a lower insurance premium. If your score is not looking good, It is worth taking the time to improve your number. … Continued
Read MoreExperian, Equifax, and TransUnion. The higher your score, the better your credit looks to lenders. And, the better your credit looks to lenders, the more likely they are to offer you lower interest rates when you need to borrow money Why your credit score matters A credit score is an indicator of the likelihood that … Continued
Read MoreWE COMMUNICATE WITH ALL THREE CREDIT BUREAUS FOR YOU:
