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Military Credit Repair |
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MNN recommends Lexington Law for professional credit repair
assistance. |
Credit Repair:
Self Help May Be Best
You see the advertisements in newspapers, on TV, and on the
Internet. You hear them on the radio. You get fliers in the mail.
You may even get calls from telemarketers offering credit repair
services. They all make the same claims:
 "Credit
problems? No problem!"
"We
can erase your bad credit - 100% guaranteed."
"Create
a new credit identity - legally."
"We
can remove bankruptcies, judgments, liens, and bad loans from your
credit file forever!"
Do yourself a favor and save some money, too. Don't believe these
statements. Only time, a conscious effort, and a personal debt
repayment plan will improve your credit report.
This page explains how you can improve your creditworthiness
and gives legitimate resources for low or no-cost help.
The Scam
Everyday, companies nationwide appeal to consumers with poor
credit histories. They promise, for a fee, to clean up your credit
report so you can get a car loan, a home mortgage, insurance, or
even a job. The truth is, they can't deliver. After you pay them
hundreds or thousands of dollars in fees, these companies do
nothing to improve your credit report; most simply vanish with
your money.
The Warning Signs
If you decide to respond to a credit repair offer, look for these
tell-tale signs of a scam:
companies that want you to pay for credit repair services before
they provide any services.
companies that do not tell you your legal rights and what you
can do for yourself for free.
companies that recommend that you not contact a credit reporting
company directly.
companies that suggest that you try to invent a
"new" credit
identity - and then, a new credit report - by applying for an
Employer Identification Number to use instead of your Social
Security number.
companies that advise you to dispute all information in your
credit report or take any action that seems illegal, like creating
a new credit identity. If you follow illegal advice and commit
fraud, you may be subject to prosecution.
You could be charged and prosecuted for mail or wire fraud if you
use the mail or telephone to apply for credit and provide false
information. It's a federal crime to lie on a loan or credit
application, to misrepresent your Social Security number, and to
obtain an Employer Identification Number from the Internal Revenue
Service under false pretenses.
Under the Credit Repair Organizations Act, credit repair companies
cannot require you to pay until they have completed the services
they have promised.
The Truth
No one can legally remove accurate and timely negative information
from a credit report. The law allows you to ask for an
investigation of information in your file that you dispute as
inaccurate or incomplete. There is no charge for this. Everything
a credit repair clinic can do for you legally, you can do for
yourself at little or no cost. According to the Fair Credit
Reporting Act (FCRA):
You're entitled to a free report if a company takes adverse
action against you, like denying your application for credit,
insurance, or employment, and you ask for your report within 60
days of receiving notice of the action. The notice will give you
the name, address, and phone number of the consumer reporting
company. You're also entitled to one free report a year if you're
unemployed and plan to look for a job within 60 days; if you're on
welfare; or if your report is inaccurate because of fraud,
including identity theft.
Each of the nationwide consumer reporting companies
- Equifax, Experian, and TransUnion - is required to provide you with a free
copy of your credit report, at your request, once every 12 months.
The three companies have set up a central website, a toll-free
telephone number, and a mailing address through which you can
order your free annual report. Do not contact the
three nationwide consumer reporting companies individually. They
are providing free annual credit reports only through
www.annualcreditreport.com,
1-877-322-8228, and Annual Credit Report Request Service, P.O. Box
105281, Atlanta, GA 30348-5281. You may order your reports from
each of the three nationwide consumer reporting companies at the
same time, or you can order your report from each of the companies
one at a time.
You can dispute mistakes or outdated items for free. Under the FCRA, both the consumer reporting company and the information
provider (that is, the person, company, or organization that
provides information about you to a consumer reporting company)
are responsible for correcting inaccurate or incomplete
information in your report. To take advantage of all your rights
under this law, contact the consumer reporting company and the
information provider.
STEP ONE
Tell the consumer reporting company, in writing, what information
you think is inaccurate. Include copies (NOT originals) of
documents that support your position. In addition to providing
your complete name and address, your letter should clearly
identify each item in your report you dispute, state the facts and
explain why you dispute the information, and request that it be
removed or corrected. You may want to enclose a copy of your
report with the items in question circled. Your letter may look
something like the one on page 6. Send your letter by certified
mail, "return receipt requested," so you can document what the
consumer reporting company received. Keep copies of your dispute
letter and enclosures.
Consumer reporting companies must investigate the items in
question - usually within 30 days - unless they consider your
dispute frivolous. They also must forward all the relevant data
you provide about the inaccuracy to the organization that provided
the information. After the information provider receives notice of
a dispute from the consumer reporting company, it must
investigate, review the relevant information, and report the
results back to the consumer reporting company. If the information
provider finds the disputed information is inaccurate, it must
notify all three nationwide consumer reporting companies so they
can correct the information in your file.
When the investigation is complete, the consumer reporting company
must give you the results in writing and a free copy of your
report if the dispute results in a change. If an item is changed
or deleted, the consumer reporting company cannot put the disputed
information back in your file unless the information provider
verifies that it is accurate and complete. The consumer
reporting company also must send you written notice that includes
the name, address, and phone number of the information provider.
If you request, the consumer reporting company must send notices
of any correction to anyone who received your report in the past
six months. You can have a corrected copy of your report sent to
anyone who received a copy during the past two years for
employment purposes.
If an investigation doesn't resolve your dispute with the consumer
reporting company, you can ask that a statement of the dispute be
included in your file and in future reports. You also can ask the
consumer reporting company to provide your statement to anyone who
received a copy of your report in the recent past. You can expect
to pay a fee for this service.
STEP TWO
Tell the creditor or other information provider, in writing, that
you dispute an item. Be sure to include copies (NOT originals) of
documents that support your position. Many providers specify an
address for disputes. If the provider reports the item to a
consumer reporting company, it must include a notice of your
dispute. And if you are correct - that is, if the information is
found to be inaccurate - the information provider may not report
it again.
Reporting Accurate Negative Information
When negative information in your report is accurate, only the
passage of time can assure its removal. A consumer 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.
The Credit Repair Organizations Act
By law, credit repair organizations must give you a copy of the
"Consumer Credit File Rights Under State and Federal Law" before
you sign a contract. They also must give you a written contract
that spells out your rights and obligations. Read these documents
before you sign anything. The law contains specific protections
for you. For example, a credit repair company cannot:
make false claims about their services
charge you until they have completed the promised services
perform any services until they have your signature on a written
contract and have completed a three-day waiting period. During
this time, you can cancel the contract without paying any fees
Your contract must specify:
the payment terms for services, including their total cost
a detailed description of the services to be performed
how long it will take to achieve the results
any guarantees they offer
the company's name and business address
Have You Been Victimized?
Many states have laws regulating credit repair companies. State
law enforcement officials may be helpful if you've lost money to
credit repair scams.
If you've had a problem with a credit repair company, don't be
embarrassed to report it. While you may fear that contacting the
government will only make your problems worse, remember that laws
are in place to protect you. Contact your local consumer affairs
office or your state Attorney General (AGs). Many AGs have
toll-free consumer hotlines. Check the Blue Pages of your
telephone directory for the phone number or check
www.naag.org for
a list of state Attorneys General.
Need Help? Don't Despair
Just because you have a poor credit report doesn't mean you won't
be able to get credit. Creditors set their own credit-granting
standards and not all of them look at your credit history the same
way. Some may look only at more recent years to evaluate you for
credit, and they may grant credit if your bill-paying history has
improved. It may be worthwhile to contact creditors informally to
discuss their credit standards.
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.
Most credit counselors offer services through local offices, the
Internet, or on the telephone. If possible, find an organization
that offers in-person counseling. Many universities, military
bases, credit unions, housing authorities, and branches of the
U.S. Cooperative Extension Service operate nonprofit credit
counseling programs. Your financial institution, local consumer
protection agency, and friends and family also may be good sources
of information and referrals.
If you are considering filing for bankruptcy, you should know
about one major change to the bankruptcy laws: As of October 17,
2005, you must get credit counseling from a government-approved
organization within six months before you file for bankruptcy
relief. You can find a state-by-state list of government-approved
organizations at www.usdoj.gov/ust. That is the website of the
U.S. Trustee Program, the organization within the U.S. Department
of Justice that supervises bankruptcy cases and trustees.
Reputable credit counseling organizations can advise you on
managing your money and debts, help you develop a budget, and
offer free educational materials and workshops. Their counselors
are certified and trained in the areas of consumer credit, money
and debt management, and budgeting. Counselors discuss your entire
financial situation with you, and help you develop a personalized
plan to solve your money problems. An initial counseling session
typically lasts an hour, with an offer of follow-up sessions.
Do-It-Yourself Check-Up
Even if you don't have a poor credit history, some financial
advisors and consumer advocates suggest you review your credit
report periodically
because the information it contains affects whether you can get
a loan or insurance - and how much you will have to pay for it.
to make sure the information is accurate, complete, and
up-to-date before you apply for a loan for a major purchase like a
house or car, buy insurance, or apply for a job.
to help guard against identity theft. That's when someone uses
your personal information - like your name, your Social Security
number, or your credit card number - to commit fraud. Identity
thieves may use your information to open a new credit card account
in your name. Then, when they don't pay the bills, the delinquent
account is reported on your credit report. Inaccurate information
like that could affect your ability to get credit, insurance, or
even a job.
Sample Dispute Letter
Date
Your Name
Your Address
Your City, State, Zip Code
Complaint Department
Name of Company
Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file. The
items I dispute also are encircled on the attached copy of the
report I received.
This item (identify item(s) disputed by name of source, such as
creditors or tax court, and identify type of item, such as credit
account, judgment, etc.) is (inaccurate or incomplete) because
(describe what is inaccurate or incomplete and why). I am
requesting that the item be deleted (or request another specific
change) to correct the information.
Enclosed are copies of (use this sentence if applicable and
describe any enclosed documentation, such as payment records,
court documents) supporting my position. Please investigate this
(these) matter(s) and (delete or correct) the disputed item(s) as
soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing)
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them. To file
a complaint or to get free information on consumer issues, visit
ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY:
1-866-653-4261. The FTC enters Internet, telemarketing, identity
theft, and other fraud-related complaints into Consumer Sentinel,
a secure online database available to hundreds of civil and
criminal law enforcement agencies in the U.S. and abroad. |
Building a
Good Record
On your first attempt to get credit, you may face a common
frustration: sometimes it seems you have to already have credit to
get credit. Some creditors will look only at your salary and job
and the other financial information that you put on the
application. But most also want to know about your track record in
handling credit, namely, how reliably you've repaid past debts.
They turn to the records kept by credit bureaus or
credit-reporting agencies, whose business is to collect, store,
and report information about borrowers that is routinely supplied
by many lenders. These records include the amount of credit you
have received and how faithfully you've repaid.
Here are several ways you can begin to build a good credit
history:
Open a checking account or a savings account or both. These do
not begin your credit file but may be checked as evidence that you
have money and know how to manage it. Cancelled checks can be used
to show that you pay utilities or rent bills regularly, a sign of
reliability.
Apply for a department store credit card. Repaying credit card
bills on time is a plus in credit histories.
Ask whether you may deposit funds with a financial institution
to serve as collateral for a credit card; some institutions will
issue a credit card with a credit limit usually no greater than
the amount on deposit.
If you're new in town, write for a summary of any credit record
kept by a credit bureau in your former town. (Ask the bank or
department store in your old hometown for the name of the agency
it reports to.)
If you don't qualify on the basis of your own credit standing,
offer to have someone cosign your application.
If you're turned down, find out why and try to resolve any
misunderstandings.
Credit Histories for Women
Under the Equal Credit Opportunity Act, reports to credit bureaus
must be made in the names of both husband and wife if both use an
account or are responsible for repaying the debt. Some women who
are divorced or widowed may not have separate credit histories
because their credit accounts were listed only in their husbands'
names. But divorced and widowed women can still benefit from such
a record. Under the Equal Credit Opportunity Act, creditors must
consider the credit history of accounts women have held jointly
with their husbands. Creditors must also look at the record of any
account held only in the husband's name if a woman can show that
it also reflects her own creditworthiness. If the record is
unfavorable--for example, if an ex-husband is a bad credit
risk--she can try to show that the record does not reflect her own
creditworthiness. Remember that a wife may also open her own
account to ensure starting her own credit history.
Example:
Mary Jones, when married to John Jones, always paid their credit
card bills on time from their joint checking account. But the card
was issued in John's name, and the credit bureau kept all records
in John's name. Now Mary is a widow and wants to take out a new
card, but she's told she has no credit history. To benefit from
the good credit record already established in John's name, Mary
should point out that she handled all accounts properly when she
was married and that bills were paid by checks from their joint
checking account.
Maintaining Complete and Accurate Credit Records
Mistakes on your credit record can cloud your credit future. Your
credit rating is important, so be sure that credit-bureau records
are complete and accurate.
The Fair Credit Reporting Act says that you must be told what's in
your credit file and have any errors corrected.
Negative Information. If a lender refuses you credit because of
unfavorable information in your credit report, you have a right to
get the name and address of the agency that keeps your report.
Then, you may either request information from the credit bureau by
mail or in person. You may not get an exact copy of the file, but
you will learn what's in the report. The law also says that the
credit bureau must help you interpret the data in the report
because the raw data may take experience to analyze. If you're
questioning a credit refusal made within the past 60 days, the
bureau cannot charge a fee for giving you information.
If you notify the bureau about an error, generally the bureau must
investigate and resolve the dispute within 30 days after receiving
your notice. The bureau will contact the creditor who supplied the
data and remove any information that is incomplete or inaccurate
from your credit file. If you disagree with the findings, you can
file a short statement (100 words) in your record, giving your
side of the story. Future reports to creditors must include this
statement or a summary of it.
Old Information. Sometimes credit information is too old to give a
good picture of your financial reputation. There is a limit on how
long certain information may be kept in your file:
Bankruptcies must not be reported after 10 years. However,
information about any bankruptcies at any time may be reported if
you apply for life insurance with a face value over $150,000, for
a job paying $75,000 or more, or for credit with a principal
amount of $150,000 or more.
Suits and judgments paid, tax liens, and most other kinds of
unfavorable information must not be reported after 7 years.
Your credit record may not be given to anyone who does not have a
legitimate business need for it. Stores to which you are applying
for credit may examine your record; curious neighbors may not.
Prospective employers may examine your record with your
permission. |
Maintaining
Your Credit
The best way to maintain your credit standing is to repay all
debts on time. But there may be complications. To protect your
credit rating, you should learn how to correct mistakes and
resolve misunderstandings.
When there's a problem, first try to deal directly with the
creditor. Credit laws can help you settle your complaints without
a hassle.
What Laws Apply?
THE FAIR CREDIT BILLING ACT sets up procedures requiring creditors
to promptly credit your payments and correct billing mistakes and
allows you to withhold payments on defective goods.
TRUTH IN LENDING gives you three days to change your mind about
certain credit transactions that use your home as collateral; it
also limits your risk on lost or stolen credit cards.
Billing Errors
The Fair Credit Billing Act requires creditors to correct errors
promptly and without damage to your credit rating.
A Case of Error? The law defines a billing error as any charge
for something you didn't buy or for a purchase by someone not
authorized to use your account
that is not properly identified on your bill or is for an amount
different from the actual purchase price or was entered on a date
different from the purchase date
for something that you did not accept on delivery or that was
not delivered according to agreement.
Billing errors also include
errors in arithmetic
failure to show a payment or other credit to your account
failure to mail the bill to your current address, provided you
told the creditor about an address change at least 20 days before
the end of the billing period
an item on your bill for which you need more information.
In Case of Error. If you think your bill is wrong, or want more
information about it, follow these steps:
1. Notify the creditor in writing within 60 days after the first
bill was mailed that showed the error. Be sure to write to the
address the creditor lists for billing inquiries and to tell the
creditor
your name and account number
that you believe the bill contains an error and why you believe
it is wrong and
the date and suspected amount of the error or the item that you
want explained.
2. Pay all parts of the bill that are not in dispute. But while
waiting for an answer, you do not have to pay the amount in
question (the "disputed amount") or any minimum payments or
finance charges that apply to it.
The creditor must acknowledge your letter within 30 days unless
the problem can be resolved within that time. Within two billing
periods, but in no case longer than 90 days, either your account
must be corrected, or you must be told why the creditor believes
that the bill is correct.
If the creditor made a mistake, you do not pay any finance charges
on the disputed amount. Your account must be corrected, and you
must be sent an explanation of any amount you still owe.
If no error is found, the creditor must send you an explanation of
the reasons for that finding and promptly send a statement of what
you owe, which may include any finance charges that have
accumulated and any minimum payments you missed while you were
questioning the bill. You then have the time usually given on your
type of account to pay any balance.
3. If you still are not satisfied, you should notify the creditor
in writing within the time allowed to pay your bill.
Maintaining Your Credit Rating
A creditor may not threaten your
credit rating while you're resolving a billing dispute.
Once you have written about a possible error, a creditor must not
release information to other creditors or credit bureaus that
would hurt your credit reputation. And, until your complaint is
answered, the creditor also cannot take any action to collect the
disputed amount.
After the creditor has explained the bill, if you do not pay in
the time allowed, you may be reported as delinquent on the amount
in dispute, and the creditor may take action to collect. Even so,
you can still disagree in writing. Then the creditor must report
that you have challenged your bill and give you the name and
address of each person who has received information about your
account. When the matter is settled, the creditor must report the
outcome to each person who has received that information. Remember
that you may tell your own side in your credit record with a
100-word explanation.
Defective Goods or Services
Your new sofa arrives with only three legs. You try to return it;
no luck. You ask the merchant to repair or replace it; still no
luck. The Fair Credit Billing Act allows you to withhold payment
on any damaged or poor-quality goods or services purchased with a
credit card, as long as you have made a real attempt to solve the
problem with the merchant.
This right may be limited if the card was a bank or travel and
entertainment card or any card not issued by the store where you
made your purchase. In such cases, the sale must have been for
more than $50 and must have taken place in your home state or
within 100 miles of your home address.
Prompt Credit for Payments and Refunds for Credit Balances
Some creditors will not charge a finance charge if you pay your
account within a certain period of time, often called a grace
period. In this case, it is especially important that you get your
bills, and get credit for paying them, promptly. Check your
statements to ensure that your creditor follows these rules:
Prompt Billing. Look at the date on the postmark. If your account
is one on which no finance or other charge is added before a
certain due date, then creditors must mail their statements at
least 14 days before payment is due.
Prompt Crediting. Look at the payment date entered on the
statement. Creditors must credit payments on the day they arrive,
as long as you pay according to payment instructions, for example,
sending your payment to the address listed on the bill.
Credit Balances. If a credit balance results on your account (for
example, because you pay more than the amount you owe or you
return a purchase and the purchase price is credited to your
account), the creditor must make a refund to you. The refund must
be made within seven business days after your written request or
automatically if the credit balance still in exists after six
months.
Canceling a Mortgage
Truth in Lending gives you a chance to change your mind on one
important kind of transaction--when you use your home as security
for a credit transaction. For example, when you are financing a
major repair or remodeling and use your home as security, you have
three business days, usually after you sign a contract, to think
about the transaction and to cancel it if you wish. The creditor
must give you written notice of your right to cancel, and if you
decide to cancel, you must notify the creditor in writing within
the three-day period. The creditor must then return all fees paid
and cancel the security interest in your home. Until the three
days are up, a contractor may not start work on your home, and a
lender may not pay you or the contractor. If you must have the
credit immediately to meet a financial emergency, you may give up
your right to cancel by providing a written explanation of the
circumstances.
The right to cancel (or right of rescission) was provided to
protect you from decisions that are hasty or made under pressure,
possibly putting your home at risk if you are unable to repay the
loan. The law does not apply to a mortgage to finance the purchase
of your home; for that, you commit yourself as soon as you sign
the mortgage contract. If you use your home to secure an open-end
credit line--a home equity line, for instance--you have the right
to cancel when you open the account or when your security interest
or credit limit is increased. (In the case of an increase, only
the increase would be cancelled.)
Lost or Stolen Credit Cards
If your wallet is stolen, your greatest cost may be inconvenience
because your liability on lost or stolen cards is limited under
Truth in Lending. You do not have to pay for any unauthorized
charges made after you notify the card company of loss or theft of
your card. So keep a list of your credit card numbers and notify
card issuers immediately if your card is lost or stolen. The most
you will have to pay for unauthorized charges is $50 on each card
even if someone runs up several hundred dollars worth of charges
before you report a card missing.
Unsolicited Cards
It is illegal for card issuers to send you a credit card unless
you ask for or agree to receive one. However, a card issuer may
send, without your request, a new card to replace an expiring one.
(Source:
FTC.gov) |
Consolidation Loans for Military
(MNN recommends Pioneer Military
Loans for consolidation loans.)
Pioneer Military Lending has spent the past twenty years
exclusively serving the military community. In fact, thirty
percent of their associates are either current or former members
of the military or they have spouses who are.
This experience means they truly understand the unique lifestyle
needs of active-duty and career retired service members. Every
day, their associates strive to influence service members' lives
for the better by providing a voice for issues within the
community.
Military
Loans for all ranks and branches
Loans
from $500 to $10,000 - 24-hour service
Avoid
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Every
loan is backed by a 15-day, no-cost return policy. If, for any
reason, you are not completely satisfied, you can cancel your loan
within 15 days at no cost to you ... guaranteed
Their
Military Scoring Model recognizes the unique military lifestyle
and more accurately judges a military customer's true credit
worthiness, leading to the best rate and a fair price
For more than two decades, Pioneer Military Lending has provided
military families with military loan solutions that are fair,
secure and geared towards helping you get the money you need
without excessive charges. |
Testimonial
"When I joined the Army I had a lot of civilian debts. After
joining, I used a Pioneer Military Loan to consolidate my debts
into one easy allotment payment. Before I knew it I had paid off
my allotment and was debt free."
- James M. (U.S. Army) |
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