Many people find themselves in a bad credit situation. There are many companies that claim to know credit repair secrets that can put you back in good credit status in no time flat. What are these secrets and how can you find them?
Well, to begin with, let’s first reveal to you one secret; there actually are no credit secrets. Sorry, I didn’t mean to burst your bubble; it’s for your own good. Please read on.
You see, scam credit repair companies want you to believe that there is some big credit secret that only they know, just to get your money. What there really are, are what are better called open secrets. That is, secrets that you can discover yourself given the right information source.
And yes, they can also be loosely called credit repair secrets because not many people know about them.
There is yet another reason they can be called “credit secrets”. Banks, credit bureaus, payday loans with no credit checking, debt collectors and others who stand to make more money out of your lack of knowledge don’t want to keep it that way. Knowledge is power, and they want to keep you powerless. Why?
When more people get charged higher interest rates due to low or mediocre credit scores, it’s not hard to guess who stands to gain.
When a debt collection agency buys an old “uncollectable” debt for pennies on the dollar and then harasses the debtor into paying off… well, it’s easy to see why lack of knowledge on the consumer’s part is money in the bank for the collector.
Now let’s take a look at some of these open credit repair secrets:
1. Credit reporting statute of limitations (SOL): There is a seven year statute of limitations on reporting bad credit notations for bad closed accounts, collections and public records. Bankruptcies can stay up to ten years and tax liens can stay up to seven years from the date paid. However collection agencies can trick you into acknowledging an old debt, which restarts the SOL. There also are some unscrupulous collection agencies that give old accounts new names and numbers and then report them as new. When an account is nearing its SOL you can offer a fraction of the amount owed and demand a deletion from your credit report. However be careful with your words lest you restart the SOL.
2. State SOL: There is a period outside of which a debtor or collector cannot take you to court for an outstanding debt. This differs from state to state, so check your state’s stipulation. If the SOL in your state has expired, you can use this as leverage to get the reporting party to delete the negative notation on paying a fraction of the full amount. Again, you should be careful with what words you use lest you restart the SOL.
3. The FCRA and FDCPA: The Fair Credit Reporting Act (FCRA) is the law that governs how your credit is reported. The words are “fair and accurate”. Though the requirements of this law are not hard for the bureaus to meet, errors and omissions happen all too often. You can use these to get derogatory information reported. The Fair Debt Collection Practices Act (FDCPA) governs what debt collectors can or cannot do. Again, the “secret” is to knowledge and learning to use that knowledge to your advantage. You can stop the collection agency dead in its tracks by demanding validation of the debt. Once more, the language you use matters or it can backfire in your face.…