Live Free | Credit Score

The Credit Score Basics

Your credit score, and your criminal record. Both depend on your past, both can make you or break you, and both follow you around for a really long period of time. But, only you, and maybe your attorney, know the details of your criminal record. Your credit score is a whole different story. It can be pulled when you apply for a new credit card, go for that new job, try to get a new car, or even try to move in to a new place.

For starters, I wrote a brief summary and explanation. Your credit score is based on a number system that ranks between 300 and 850. A mysterious secret formula (OK, OK a mathematical algorithm that you can look up on the FICA website) will ultimately determine what your score, and your financial fate, will be. Both experts and creditors alike will tell you that they believe your score will be a very accurate prediction of how good a job you are going to do when it comes to paying your bills on time.

And don’t think you’re off the hook, even if you are not trying to get a new job, car, or credit card, your credit score is important. That is because if you already have a credit card, your creditor will glance over your credit score to decide whether it’s a good idea to decrease your credit limit and make you pay less, or give you a higher interest rate and make you pay more. Those financially savvy chosen ones with the highest scores will obtain the lowest rates.

However, don’t despair just yet if you have a crummy credit score. The money gods say you can redeem yourself. A few basic rules of thumb: try to pay your bills on time. Paying a bill late, or even worse, letting one of your accounts go delinquent and into collection will have a negative impact on your credit score. That being said, it logically follows that the longer and more consistently you pay your bills on time, the better your credit score will be.

If you currently have debt, just try to pay it off rather than moving it around. The experts can tell when you’re trying to pull a fast one. It might seem like a good idea to close credit cards you’ve had for a while but haven’t used- less temptation right? But don’t! For credit scores, it looks good to have a lot of credit available for you to use, and for you to use only a little of this credit. Also, that old card leads me to my final tip: maintain longevity. Try your hardest to keep your oldest accounts active, because that’s what looks the best. My final word of advice for people looking to improve their credit score is: for the love of God, don’t open any new accounts. They will lower your average account age, and reduce your account longevity (we just talked about that) and racking up bills and not paying them was what got you into trouble in the first place! Good luck and happy spending.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies.

Debt Collectors

July 16, 2010 · Business, Collection Agencies, Credit, Credit Cards, Credit Score, Debt, Debt Management · (No comments)

The Do-It-Yourself Bailout

Debt collection is a booming business in tight times. Millions of Americans are just weeks away from bankruptcy, trying to make ends meet. Now, debt collectors have new tactics to try to get what they’re owed. And some of those tactics are skeptical.

Beth Givens, a privacy expert with Privacy Rights Clearinghouse, said she sees it as a growing problem. Debt collectors have begun telephoning other family members, friends, even neighbors, trying to locate debtors. Expect mail, emails, even voice mails and texts.

Givens wants people to know they do have rights, and that some of the new tactics may be illegal. “If you are in debt, know that there is a federal law that puts limits on the kinds of communications that debt collectors can have and it pays to really be informed,” Givens advised.

Debt collectors can use references on credit applications and other paperwork to find people you know. You may have used them as references to secure loans or credit. Collectors can ask them where YOU are. But they don’t have to give that information up. And they should know, collectors are not allowed to ask your friends to pay the debt for you.”A collection situation is never easy for a consumer to deal with,” advised Ken Paterson, who is with the Credit Advisory Service.

Paterson said people should also know their own loan companies may act as collectors. That certainly was a shock for Laura Wynn, whose car loan company called her sister.”My sister called me very upset and said that somebody had called and wanted to know if she knew what kind of person I was and the lack of integrity that I held,” she said.

If you do feel harassed, you can file a complaint with the Federal Trade Commission. Beth Givens said she expects collections to boom. “In this time of economic downturn, debt collection is a growth industry, so I think that we’re going to be hearing more complaints about debt collectors.” Your best bet– don’t dodge the debt collector’s call. If they can reach you, they’re less likely to start calling family and friends.

Mallory Megan works for Rapid Recovery Solution and writes articles on third party collection agencies.

The Do-It-Yourself Bailout

When A Bill Collector Is On The Phone, A Methodical Approach Is Best

July 16, 2010 · Collection Agencies, Credit, Credit Cards, Credit Score, Debit Cards, Debt, Debt Management, Debt Negotiation · (No comments)

Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation

If a collections agent is on the line, your immediate reaction might be to ignore the phone calls. Seems easier to do things that way right? But if you owe debt to a creditor, collection agencies are allowed to contact credit bureaus and report the debt, file lawsuits against you, and should be taken very seriously. Rather than ignore the phone calls, take them head on with a methodical approach. Your first step is to determine why you are being called. Find out where the debt comes from and exactly how much you owe.

While you have your collections agent on the phone, ask for their name, the name of the agency, the name of the creditor, the agency’s address, and their fax number. Keep in mind that you have the right to tell a debt collector that you want all future contact to be in writing over the phone, but follow up all requests you make with a written request.

One important thing to remember is that if you request that the collection agent doesn’t contact you at all, the debt collection agency has the right to contact you one more time to let you know how it plans to take further action. If you have issues with personal privacy, you can also request that you be the only person who can be contacted. A good idea is to start a file with details and dates of phone conversations and records of when you mail out letters.

If you do mail any letters or checks to the debt collection company do this by Certified Mail, Return Receipt Requested. This way you will be certain that the letter reached the collector because you will receive a signed receipt as proof. If you are able to negotiate a re-payment plan over the phone, request the terms of the plan be sent to you in writing. Any offer that a debt collector makes to remove or adjust credit history should also be documented.

Be certain that you are paying the right people. Payments are usually made to the agency, not the creditor, unless you are otherwise instructed to do so. Glance over the amount that they are asking you to pay carefully, and get an assessment of any interest, fees or charges that have been added on. By taking this methodical approach, you will feel more empowered and ready to tackle your financial issues.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies.