Credit & Credit Repair

For all those who are celebrating today, HAPPY THANKSGIVING!

Take some time out and forget about all the money worries, credit worries, and any other drama you have going on in your life. Check out the parades this morning and for those football lovers out there today…

Detroit vs. Green Bay 12:30pm est
Oakland vs Dallas 4:15pm est
New York Giants vs Denver 8:20pm est on NFL Network

Have a great holiday from all of us at Epic Internet Ventures!

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

There is one common theme to every credit repair discussion I have…PATIENCE! About 75% of the people I have talked to about credit repair over the last 15 years of my career need to have their credit report repaired in a short time frame. Everything from buying a house this month to I need to buy a car cause mine died, from trying to get a job in a specific industry to I am thinking about bankruptcy! I have heard just about all there is to hear.

What I tell people is, they didn’t get, build, and ruin their credit overnight. What makes you think that you can repair it overnight? The answer is…YOU CAN”T! There is nothing you can do to change that. The world of credit, credit repair, credit reports, and credit scores operate on a due process timeline. You have to allow the laws of our country handle your request in time.

The old “I don’t need credit, I pay cash for everything” doesn’t apply to most. If you don’t have a lot of money there is a real good chance you will need credit somewhere down the road. If you are rich you still may need credit, but what if you lost all that money…then you may need credit again. Even nation averages contribute to the overall big picture.

Start repairing your credit when you do not think you need to, start repairing your credit when you don’t need credit, or plan into your master scheme of things to allow 6 months or so to repair your credit. Don’t think about fixing your credit 30 days before you buy that house, or plan for that vacation, or need to buy that car. Think ahead, remember you need to exercise some patience and allow the laws to handle your request. No one is going to say “ooooo…here is Mr. Soandso’s request, let me handle this right now”. it doesn’t happen in the real real world.
You have to order your credit reports, and wait. Then sometimes you get a letter from the credit bureau asking you to verify your identity, so then you need to send that information…and wait. Then when you get your credit reports back you have to type all your letters and mail them back to the bureaus…and wait 30 days. Once that period in time lapses and you get your requests back 35 days or so later, you may actually have to type more letters in response to the bureaus letters. or maybe you have to send more disputes, so then you have to wait…another 30 days! Now after 90 days or so, you have determined that you need to work on settling your debts cause nothing you can do will get that item deleted from your credit report, then what? You call the collection agency or the creditor, offer a settlement, send the money (…and wait), now you have to either wait for the agency to notify the bureau that your bill is paid and the item gets updated, or you have to mail the bureaus a copy of your satisfied letter and request a manual update…and wait some more. Then to add insult to injury, you may have to wait another 30 days or more for it to actually start helping you, and worst of all…now you have to wait 7 years for that item to drop off your credit report!

So save yourself some stress, save yourself some agony, and learn where others have failed to learn. Exercise some patience in credit repair, it will do a lot for your sanity down the road, trust me!

Created by Russell Simmons in 2003, the RushCard and BabyPhat RushCard have fast become a staple for building of new credit. Here is a card that will report on your credit report and build your credit, when everyone else is turning you down. Yes, the downside is it is a pre-paid card, however you run no liability with a card like this. Just use the card 1 time a month and it will reflect active. Pay it off every month and there you have it, a card that will show credit history without the liability or the crazy APR of a normal credit card. There is no extended line of credit.

Check out the new Black Diamond and Purple Diamond cards.

Remember you have to build time and keep the card balance under 50% of your current credit limit.

Anything you can pay with a credit card, put on this card and send the money the day you charge it. Keep the card active and make sure you are using it a minimum of 1 time a month. That way the card will show active current charges and payments. Even if you have to put a tank of gas, or buy a pack of gum 1 time a month, do it.

If you have amazing credit, scores above 750 then you can pretty much call the shots on what credit card you get, what the terms are, and what kind of incentives you can get with it. If you have a 700+ score you are still in real good shape. About 42% of Americans have a sub 680 credit score, and that was last check. So what about those with tarnished credit? What about those with credit that is in the process of healing? How do you build credit when you have collections and accounts with bad history on your credit report?

I know it may seem like a uphill battle that may seem to never end. If no one will give you any type of credit instrument to build credit, go with a pre-paid card. Make sure that the card is reporting on your credit. Try to get a card with no annual fee (if possible), and find one you can afford! I know it may be a bit hard to make demands, as the old saying goes “beggars can’t be choosers”; and while that is true, you sill do not want to get ripped off in the process. Or we will call it, minimizing the collateral damage.

Remember, you didn’t ruin your credit history overnight! You did not go out and run up all your cards and the very next day, woke up with terrible credit. NOPE, it happened over time. So just like trashing your credit, repairing and restoring your credit will take some time. I generally see people with tarnished credit having to spend about three times the amount of time repairing their credit, than they did destroying their credit (sometimes that figure is even higher)!

Most people have about a 6-12 month period where everything goes bad. The time frame will extend a bit further depending on some other factors like Bankruptcy, garnishments, judgments, and how long it takes to pay the bad debt on your credit report to 0. But as a general rule I normally see people spend 3-5 years restoring your their credit after they have stopped the bleeding!

Now there are two different schools of thought here. Some people will tell you to suffer the extra 2-3 years or so and wait out your debt to fall off your credit report. And the other half of people will tell you pay it off (or settle it). To be honest with you, it comes down to personal preference.

There can be circumstances where someone would want to wait it out and let it fall off. For instance, what if you didn’t make a lot of money, or have a lot of money. Your probably reading this right now and saying “well isn’t that most everybody?” Not really, depends on if you can afford to pay it back. If you don’t make a lot of money, all money you do have is dedicated to paying bills and living day to day, then you may not have the resources to pay off your debt. Sometimes people go through medical issues, failed marriages and businesses, or even a death in the family. I also have some friends who went into schooling debt, paying for tuition, books, and room and board; only to get out of school and find their degree to be 100% worthless! Happens a lot now with the economy being in turmoil.

I highly recommend paying your debt, making payments, calling your creditors and settling your debt. Sometimes a $0 balance card with a few lates can help your credit more than having NOTHING there at all. Being a credit ghost with a 0 FICO can suck too, without a credit score of any kind. I have seen people with terrible credit get approved for credit and watched people (including myself at one point in time) get turned down over and over with a 0.

Which ever route you decide to take, paying it or waiting it out; you have to make sure what you decide is what is best for you. Listening to people tell you what decision to make at this crossroads is the worst thing you can do! People who will tell you this do not know your situation, do not fully understand your morals (they may, but most likely will not), they do not have the same credit score you do, they do not have the exact same financial situation you have. No two situations are exactly alike, so do not trust anyone who tells you. Make your decision, stick to it, and hammer out a plan of attack.

I have set up an online resource, for the every day person to learn about credit. You can get the information you need as you need it. You can sign up for a FREE newsletter to stay up to date about all things credit. Check out The United Credit Authority! And if you have not gotten started on cleaning up your credit, then crab my 100% FREE Credit Repair Course. It has a step by step walk-through and 4 letters to get you going. If you want everything, all at once, all in one place; check out our Credit Repair Systems page. There I have reviewed some of the top web courses on the market…everything from an attorney’s handwritten course to a program that you point and click! It can be that easy, depending on what your time is worth!

As always, if you have any questions at all, just shoot me an email and I will respond within a day.

Good Luck!

I cannot tell you how many times I have been asked how settling your outstanding debt effects FICO! People I speak with in all walks of life tell me “I was told that settling my debt will lower my credit score”. Well yes and no, let me explain.

When people say “lower my credit score”, I have to stop and ask them; “lower than what? Lower than it is now?” Chances are that if they have negative debt on their credit report, simply paying off a settlement will help their credit score. If they have a very high credit score to begin with then yes, it very well could hurt their credit score. Most people with high credit scores have good credit, have the money to pay debt, and probably should not have any reason to have bad debt to begin with anyway, in theory.

If they’re struggling day to day, paycheck to paycheck, or experiencing a hardship and do not have any way out in the near future. The simple act of paying the debt will reduce their debt to income ratio, and by doing this alone this can increase their credit score.

Now, I don’t have the formula for FICO, and I have read on the internet where other people seem to be able to calculate it. To be honest I have never met anyone who was able to give me a straight answer on how to calculate FICO and I have not met anyone who can calculate it themselves. So most of us are at the mercy of the bureaus calculating it and telling us what it is.

There is a hidden clause that most people and creditors will not tell you about when dealing with settling debt. The IRS repercussions, yep that’s right; Uncle Sam has his hand in this cookie jar too! By IRS (federal) law, anything more than $600.00 can be reported to the IRS as unearned income. Think about it, the creditor is due this money, the debt has been created; the creditor has 2 choices here…they can pawn the debt off on you and make you pay taxes on it or they can pay the taxes themselves. Since they are not receiving any compensation for the write-off amount, they don’t want to pay the taxes on something they never recovered. So most companies will 1099 (IRS tax form that you will get at the beginning of the year) you for the difference in the outstanding balance and the amount you settle the debt for.
FREE Credit Repair Course.

Clay Bowden has been a debt collector for 15 years, and is now the owner of Epic Internet Ventures. Which “Empowers People With Information So They May Help Themselves”. You can also visit The United Credit Authority to learn more about credit and credit repair laws.