How To Solve Your Credit Problems

Your credit report can influence your purchasing power, as well as your opportunity to get a job, rent or buy an apartment or a house, and buy insurance. When negative information in your report is accurate, only the passage of time can assure its removal.

A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years.

Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

If you are having problems paying your bills, contact your creditors immediately. Try to work out a modified payment plan with them that reduces your payments to a more manageable level. Don’t wait until your account has been turned over to a debt collector.

Here are some additional tips for solving credit problems:

• If you want to dispute a credit report, bill or credit denial, write to the appropriate company and send your letter “return receipt requested.”

• When you dispute a billing error, include your name, account number, the dollar amount in question, and the reason you believe the bill is wrong.

• If in doubt, request written verification of a debt.

• Keep all your original documents, especially receipts, sales slips, and billing statements. You will need them if you dispute a credit bill or report. Send copies only. It may take more than one letter to correct a problem.

• Be skeptical of businesses that offer instant solutions to credit problems: There aren’t any.

• Be persistent. Resolving credit problems can take time and patience.

• There is nothing that a credit repair company can charge you for that you cannot do for yourself for little or no cost.

If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable.

For example, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Click here to get more information on consumer issues or contact our firm at 718-674-1245.