Why it is Hard to Remove Collection Accounts

Why is it so hard to remove collection accounts?

You send in a dispute letter to the three national credit bureaus because you don’t recognize the collection account on your credit report. Almost 30 days later you receive an updated report from each bureau stating that the account is, “verified as belonging to you”, or that, “This item has been reported correctly”. You have no more information than you did before. You’re confused. At this point some people give up; some send another dispute thinking the results will be different. If all this happens, you are among the lucky ones.

The credit bureaus are not on your side.

The bureaus have a vested interest in not having your credit report changed or your credit scores improved. Their real clients, the ones that give them the vast amount of profit, are their subscribers – your creditors. They continuously purchase tons of your personal credit information to make decisions who to market to and who to watch or cut off.

Stalling Tactics

This is why they send form letters stating things like, “We’re sorry we are unable to honor your request – we need more proof of your address (or, the proof you sent is not legible, or some such nonsense). We’ve sent clear copies that are enlarged (for the reading impaired -LOL) and still get this letter. Now and then they just don’t reply hoping you will forget about them. If you continue to pursue them you have lost at least another 45 days! It is all done to get you to give up and build your frustration so you won’t ever try again. Besides, who has the time?  

The credit bureaus don’t always do their jobs.

One day, a client came in with an order from a judge vacating a Judgment in 2008. You would think all you had to do was send the bureaus a letter with the document and, presto, the judgment would be removed. After the bureaus coming back TWICE that the account was accurate and verified, I wrote a strongly worded and threatening custom letter that finally got it removed. How they verified a judgment that no long existed is disturbing to say the least.

The bureaus are not the only ones playing games.

I have an acquaintance that use to own a large collection agency. At one of the national conferences for the credit repair industry, he confided in me that every Monday when he came into the office, he would go onto e-Oscar, (Online Solution for Complete and Accurate Reporting) the software owned by the credit bureaus to communicate back and forth with the data furnishers. He would reply to every dispute from the credit bureaus that the account information was verified as accurate. What he received was a two or three digit code that stood for a specific dispute, and, would send back the code stating the account was verified. He usually took all morning to do this without so much as peeking at any of the accounts. If you sent along documents supporting the dispute, they are never transmitted by the bureaus. I informed him this was an illegal activity. He argued, but eventually admitted it wasn’t quite the right thing to do. If he was taking this short cut how possible is it that others are doing the same? The mentality of some of these collection agencies, that are huge in size, is; if we can get away with it, so what – prove we didn’t investigate your dispute.

A new breed of Collection Agencies

It used to be that Collection Agencies got a percentage of the moneys collected. Today, more and more companies are pursuing a new model – they are debt BUYERS. Known as Junk Debt Buyers they buy huge amounts of consumer debt for pennies on the dollar! One company in a three month period purchased $2.3 BILLION dollars of consumer debt for $121,000,000. Another had, as of last September held more than 34,000,000 individual accounts and paid only 2.54 percent of their original $42 Billion dollar value. There is just too much profit at stake.

A more recent trick is to ask YOU to provide them all information, (even on accounts that are not yours). It is THEIR job to prove the debt, not yours.

With all these tactics is it any wonder anyone can get inaccurate or unverifiable information off their credit reports as required by consumer credit laws. The average consumer has little chance. This is why there is a need for Professional Credit Repair Companies like our company, Credit Scoring Advisor, to even the playing field and aggressively go after tradeline that should be removed. We average 70.2% success rate on removal of the accounts we go after.

          --------------------------------------------------------------------------------------------------------

At Credit Scoring Advisor we are the experts. We have trained and coached many credit repair companies throughout the United States and Daniel Sater, our founder, has spoken at numerous trade conferences on credit scoring and credit repair and have created several certification exams for the industry. You have continued access throughout our process to a recognized credit expert. Give us a call for a free consultation at 631-392-8685.

Frustrated by Mortgage Closing Delays by an “IN DISPUTE” account?

Frustrated by Mortgage Closing Delays Caused by an Account Being “IN DISPUTE”?

by Daniel Sater – Nationally Recognized Credit Expert         631-392-8685          www.CreditScoringAdvisor.com

The mortgage industry has gone through numerous challenges, changes, and restrictions over the past 5 years but it is pure frustration to have the “IN DISPUTE” notation come up at the last minute delaying a closing, and worse, cause possible anger and frustration on the part of the home buyer.

Homebuyers Seldom Check Their Credit Before Applying for a Mortgage

This situation happens more time than we would like to see due to the mortgage application and credit pull being the first time many buyers have looked at their credit reports and scores. In the US it is estimated that about 40,000,000 credit reports have errors or misleading information on them.

It is at this point that home buyers start writing the credit bureaus or hire a professional credit repair companies to assist them in removing inaccurate, incomplete or unverifiable information from their credit report as provided for by the consumer laws. If an account isn’t deleted the “IN DISPUTE” notation will stay with it forever.

The Requirement to Remove all “IN DISPUTE” Notations

Recently, Fannie Mae and Freddie Mac have decided that this notation has skewed the FICO scores and demanded that this notation must be removed.  One of the problems is that their assumptions are wrong. There are two dispute notations; the first one is a temporary notation the credit bureau reports during investigation which suspends the scoring model from scoring the negative information. With the new software used to communicate between the bureaus and the data furnishers this may last 5 days. If the creditor verifies the information as accurate they will add a permanent notation of “IN DISPUTE”. Even with this notation the negative information is now scored!

How To Remove the “IN DISPUTE” notation quickly.

A simple letter to the creditor stating that, “This account is not in dispute. Please remove the Compliance Condition Code “XB” from reporting.”

This is the code at the credit bureau that enters on your report “Acct information disputed by consumer under FCRA” and “IN DISPUTE”. If you send a letter to the credit bureaus most likely they will refer you to the creditor and take no action.

We do this for our credit repair clients seeking a mortgage all the time, and now, any mortgage professional can do the same for their home buyer.

Daniel Sater is a Nationally Recognized Credit Expert who founded Credit Scoring Advisor, a national credit repair company specializing in Rapid Credit Repair for their clients. In addition Dan trains and Coaches numerous Credit Repair Companies across the country, he is a Speaker and Author. He last book, "The Top 20 Toxic Credit Mistakes" is available on the Credit Scoring Advisor website. He can be reached at 631-392-8685.

5 Deadly Mistakes to Avoid When Looking for a New Home

5 Deadly Mistakes to Avoid When Looking for a New Home

By Daniel Sater C.C.E CFP

Nationally Recognized Credit Expert, Author, Speaker, and Credit Coach to the Credit Repair Industry

631-392-8685        www.CreditScoringAdvisor.com      ©2012 CREDIT SCORING ADVISOR

1)      Not Paying Down Credit Card Accounts with Balances in Advance of Applying for Credit

The credit scoring model takes 30 to 60 day to reflect what you do today and Mortgage lenders will no longer allow you to pay off credit cards to improve your debt to income ratios. This area accounts for approximately 30% of your credit score. I have seen more damage done in this area due to the consumer’s lack of knowledge. As you use more of your credit limit you lose more points from your score. Max out 5 or 6 credit cards and you may lose 80 to 125 points. Paying down your credit balances is one of the fastest ways to boost your scores. The best is to have your balances below 10% usage prior to applying for new credit or a big ticket item.

2)      Closing Accounts, or not Using Credit Card Accounts to Keep them Active.
According to Fair Isaac, the people who developed the FICO Scoring Model, ALL account reporting on your credit report are scored, OPEN OR CLOSED. There is little distinction between open and closed accounts. You NEVER get a scoring benefit by closing tradelines. Closing a tradeline will NEVER help your scores but can only lower your score. So will not using or having Credit Cards.

In addition to the effect on your debt to available credit ratio, you also run the risk of shortening your credit history. Over time, these closed accounts will drop from your report, eliminating a good account and reducing the number of accounts you have successfully had.

3)      Missing Payments

For some reason people get complacent when paying bills and don’t thinks one slip means that much. If your score is high, (>750) one missed payment will cost you 80 to 110 points. (Good News! If your score is already 550 you might lose on 10 to 20 points.) A rule of thumb, the more recent the more damage will be done. Also, the more severe (90 days late vs 30 days late) and/or the more frequent the lower your score. It doesn’t matter if it’s $10.00 of $10,000. If you have missed a payment, bring it current as soon as possible.

4)      Apply for New Credit of Any Kind.  Including those “You have been pre-approved” credit card invitations that you receive in the mail.  Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately.  Depending on the elements in your current credit report, you could lose anywhere from 2- 15 points for one hard inquiry. New Credit will also change your scores.

5)      PAYING OFF COLLECTIONS OR CHARGE OFFS during the process thinking they will be removed from your credit report or improve your score. IT WON’T HELP. This is where a Professional Credit Restoration firm with the knowledge and skills can help Boost your Scores. We average a 70% deletion record. Give us a call. 631-392-8685
 -----------------------------------------------------------------------------------------------------------------------
Daniel Sater is a Nationally Recognized Credit Expert who founded Credit Scoring Advisor, a national credit repair company specializing in Rapid Credit Repair for their clients. In addition Dan trains and Coaches numerous Credit Repair Companies across the country, he is a Speaker and Author. He last book, "The Top 20 Toxic Credit Mistakes" is available on the Credit Scoring Advisor website. He can be reached at 631-392-8685.

The Truth About Credit Repair Companies

The Truth about Credit Repair Companies

Many people have advised you to be wary of Credit Repair Companies. You were told that they can’t remove accurate tradelines, and that almost all negative entries will stay on the credit report for 7 years. Repairing you credit takes time. They go on to tell you that anything Credit Repair Companies can do, you can do for yourself at little or no cost. They imply and sometimes actually say that Credit Repair is only a scam.

What you should know is that all the characterization comes originally from Fair Isaac Corp., the developers of the FICO Scoring Model, and the three main credit bureaus. So methodical was their campaign that the State Attorney Generals, the Federal Trade Commission, various consumer groups, and the clueless media credit experts and reporters that gain their “knowledge” from news services and staff that research the topic by contacting the people who are creating the lies to begin with, and then, accepted their words without question. To prove their point, they hold up the scam operations that have ripped off the public. What they don’t tell you is that every industry has their share of unethical people. They even have influenced congress to write what I believe are restraint-of-trade laws that state, if you use or consult a credit repair company they can view your dispute as “frivolous”.

Why have they done this you ask? Changes to the credit model costs them money. In fact, they have a vested interest in you having credit scores lower than they should be. Their subscriber (your creditors), make more money off your debts that way. They are actually afraid of what credit repair companies have been able to do for their clients.

Professional credit repair companies are able to achieve better and faster results for their clients due to their experience and training.
  ---------------------------------------------------------------------------------------------------------------------

At Credit Scoring Advisor we are the experts. We have trained and coached many credit repair companies throughout the United States and have spoken at numerous trade conferences on credit scoring and credit repair and have created several certification exams for the industry. You have continued access throughout our process to a recognized credit expert. Give us a call for a free consultation at 631-392-8685.

Mistakes You Can't Afford to Make with a Debt Collector

Mistakes You Can't Afford to Make with a Debt Collector

By Daniel Sater CCE, Certified FICO Professional

Avoid these mistakes when dealing with a debt collector. Here is what you need to know: 

           

#1  Mistake: Giving a debt collector your banking or credit card information.

 If you tell a collector to take $75 per month out of your account and at some point in the future they empty your account, you’re screwed. Why? Because the collector is going to say you gave them permission and it becomes at best a “he says, she says” type of situation. Any attorney will tell you you don’t have much of a case against them. NEVER give a collector you credit card or bank information. Send a money order instead. Best to get the money order from a bank you don’t use.

Never do Check-by-Phone or Western Union

#2 Mistake: Sending money to a debt collector without getting paperwork FIRST,

showing who they are, what you owe, how they arrived at that figure, who the original creditor and what was the original amount. It also pays to ask if they were assigned the debt or if the bought the debt. (Ask for papers showing their authority to collect for the creditor).

Don’t let them intimidate you. You have what they want – the money. Believe me, it’s all about the money and getting it as soon as possible. You have the upper hand; ask for them to prove the facts. If they cross the line you can threaten them with a lawsuit, and that you will notify the BBB, their States Attorney General and the Federal Trade Commission FTC.

 #3 Mistake: Not showing up in court, or answering a court suit, when served.

If you don’t appear, you automatically receive a default judgment. It goes on your record for seven years as a judgment. It will continue to accrue interest and depending on your state can follow you for ten years and possibly be renewed for an additional ten years. Many attorneys file a suit in court because they know you likely will not show up (90% don’t show), so it’s an easy payday for them, they've done their part by submitting the paperwork. The judge thinks, the consumer doesn't care, why should I? He’ll even add on court cost.

 NEVER ignore a lawsuit; we can help you with referrals to local consumer law professionals. Don’t tell me you can’t afford a lawyer, you have no idea how easy it is to hire one. It can be a lot more expensive not to.

REMEMBER, even if the Statues of Limitation has expired barring them from getting a judgment, if you don’t show up, the Judge won’t question how old the account is and issue a judgment. Once the judgment is on your record, it can be enforced. You must be there to claim an affirmative defense regarding the Statutes of Limitation or you lose.

#4 Mistake: Signing an agreement or legal document without consulting with an attorney.

Don't do it, even if you are threatened. Again, get in touch with us; you have options, let’s discuss them.

#5 Mistake: Failure to dispute the validity of the debt and dispute any credit bureau reporting. These are important steps in protecting your rights, invoking the federal laws that protect you and making these bottom feeders back up their claims. We can offer you Dispute Validation Forms, credit disputing tips and access to the brightest consumer law professionals in the country. Debt collectors have to abide by the law, make them realize you know your rights, make them work for it.

#6 Mistake:  Document everything, phone call times and dates and who called. Request that all communication is done in writing. 

It can take most of the possibility of intimidation and threats out of the conversation. It’s the best way to keep a record of conversation.

#7 Mistake:  Thinking paying off a debt will automatically remove it from your credit report.

All you will have is a paid collection, that is paid. You will avoid al lawsuit, and, your file being sold to yet another collector who will hound you for money.

If you request that payment will have them remove the item reported, get the agreement in writing FIRST.

 -----------------------------------------------------------------------------------------------------------------------

At Credit Scoring Advisor, we are the Experts. We have helped thousands of clients reach the goal of buying a home, a new card or just be able to get credit cards for everyday use.

Daniel Sater has trained and coached numerous Credit Repair Companies across the country to have a better understanding of how the FICO scoring model works and how to get the best results in repairing their client’s credit. We are proud members of NACSO the Credit Repair Industry’s Trade Association.

If you need help improving your credit, give us a call at 631-392-8685 – you’ll be glad you did. We provide rapid, personalized credit repair – you will be working directly with a Nationally Recognized Credit Expert.