Black Money Business Jobs : Build Good Credit or Repair Bad Credit

Discussion in 'Black Money Business Jobs' started by GrandHustle, Oct 20, 2005.

  1. GrandHustle

    GrandHustle Well-Known Member MEMBER

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    Credit.

    Tip #1 - YOUR CREDIT CHARACTER
    The term "credit character" refers to how responsible you are about paying your bills. To determine your "credit character" a lender will request a credit report to see how well you have handled credit in the past. Many people fail to realize how important it is to get your bills paid on time, yet this is the most important factor that lenders look at in the credit evaluation. You need to only pay the minimum amount due each month to be considered a person who pays on time. Now let's look at some very important character referenceslenders will use in evaluating whether to grant you credit:
    CREDIT REFERENCES: Any account that appears on your credit report can be used as a credit reference, good or bad.
    BANK CARDS: A Visa or Mastercard is the single best credit reference on a report as long as it has been paid on time over a period of time. Lenders like to see six months of steady payments.
    TRAVEL AND ENTERTAINMENT CARDS: American Express, Diners Club, and Carte Blanche require payment in full each month. These are not as strong as a reference compared to a Visa or Mastercard.
    DEPARTMENT STORE CARDS: These are somewhat easy to get and therefore are not looked upon with much weight in the evaluation.
    MORTGAGES: These still count very little towards a credit reference because for the most part they are secured.
    AUTO LOANS: This is also a secured loan and carries little weight. Some auto loans are not even reported to the major credit bureaus.
    CHECKING AND SAVINGS ACCOUNTS: Both are considered in the evaluation process. A savings account is looked upon much more favorably since the ability to save money in these times is considered a bonus.
    EMPLOYMENT: Your position, the type of work you do, and how long you have been working in your field all count towards credit approval. The more stable you have been the better. Usually two or more years at your current job is considered positive.

    Tip #2 - LEARN YOUR CAPACITY
    Lenders look for your capacity when deciding whether to grant you a loan. Capacity refers to your ability and the resources you have to pay back the loan. Here are some capacity factors that lenders use:
    1. INCOME
    No matter what kind of loan you are applying for (mortgage, credit card, or automobile), your income will somewhat determine how much of a loan you are eligible for. From $10,000 to $35,000 is the general minimum income requirements for most lenders. Keep in mind, a high income will not always make up for a poor credit rating in the approval decision.
    2. HOW MUCH CREDIT YOU HOLD
    If you have too much credit already you will rarely get additional credit. Lenders look at how close you are to your credit limits on your revolving accounts and how many credit cards you hold. The closer you are to your credit limits, the more it looks like you need credit. You know the old saying "If you need credit, it is hard to get...If you do not need credit, it is easy to get." The number of cards you hold can also effect your chances of approval. If you have six or more cards, lenders will start to get nervous. Any accounts you have not used in more than a year should be closed. Open unused accounts can harm your chances of additional credit.

    Tip #3 - COLLATERAL
    Collateral is money or property you put up to secure a loan. It is like a guarantee that you will repay the loan. Loans backed by collateral are called collateralized or secured loans. Since most credit cards are unsecured, collateral will not play a factor in the credit decision. There are other types of loans that collateral plays a large part in the approval process. Mortgages, auto loans, and furniture loans are all collateralized by the items being loaned on. If you can't repay the loan, the lender will be able to repossess the collateral. Collateralized loans are the easiest to get approved for since the item that is used for collateral can be taken back and sold.

    Tip #4 - CHOOSE THE RIGHT CARD
    When you go to apply for a credit card, the type of card you apply for can make the difference between an approval or a rejection. If your credit isn't spotless, then your chances of getting a lower interest rate credit card are very slim. Anything lower than 16% is hard to qualify for. A general rule of thumb, the higher the interest rate on the card, the greater the chance of approval, even with less than perfect credit. The last thing you want to do is to apply for a low interest rate card when your credit is shaky, get turned down, and have another inquiry on your credit report. Remember, an inquiry on your report without an associated account doesn't look good to other lenders, in fact, it scares them off. There philosophy is why give you credit if the other company won't. You may not know this but if you write to the bank or credit card company before you apply and ask for the qualification guidelines, such as credit limits, income requirements, and credit standards, your chances of approval are greater than applying blindly. Sometimes the application will give you some information. If the company refuses to give you the information, then take your business elsewhere. There probably very strict on approvals.

    Tip #5 - FIX YOUR INACCURATE CREDIT REPORT
    If you have some inaccurate or obsolete or incomplete information on your credit report, you have the legal right to have itinvestigated by the credit bureaus, and corrected if errors are found. You should check all three major credit bureau's reports for inaccuracies and challenge any inaccurate information. They have up to 30 days to investigate and correct the information. If they are unable to verify the information in 30 days, they must by law, delete the erroneous information in question from your report. If the credit bureau doesn't respond to your investigation request within 30 days then you should write them back and kindly remind them that they by law have 30 days to complete your request and that they have exceeded this time period. Usually this will get them to either send you the updated corrected report or a letter explaining why your report was not changed.

    Tip #6 - STAY AWAY FROM CREDIT REPAIR COMPANIES OR CREDIT DOCTORS
    I'm sure you have seen or heard their ads promising to remove bad credit from your credit report for a sum of money. Please do not waste your hard earned money with these modern-day snake-oil peddlers. They know it is impossible to remove legitimate bad credit from your file. In fact, it is illegal. In essence all they do is fill out dispute letters for you and send them to the credit bureaus hoping that one will slip by the system and something that shouldn't be removed will get accidentally removed by a busy computer operator. The bad credit will eventually get put back on sooner or later. If there is inaccurate information on your report then you can certainly save yourself alot of money and do it yourself. In a few states, including California, it is illegal to collect money up front before the service is completed. Keep this in mind the next time they ask for money up front if for some reason you choose to have a credit repair company do it for you. Do yourself a big favor, do it yourself.

    Tip #7 - THE CREDIT SCORE

    All lenders will use a scoring system much like the one below to screen and approve or reject applicants. Point values are assigned to each item and then tallied up for a total score. Let's look at a typical loan scoring system used by financial institutions.
    EMPLOYMENT
    UNEMPLOYED -1
    UNSKILLED MANUAL LABOR 2
    CLERICAL WORK 3
    MANAGERIAL WORK 5
    PROFESSIONAL 7
    SELF-EMPLOYED 3
    LENGTH OF TIME ON CURRENT JOB
    SIX MONTHS-TWO YEARS 1
    TWO YEARS-FIVE YEARS 3
    MORE THAN FIVE YEARS 5
    NUMBER OF BANKCARDS HELD
    ONE TO SIX 4
    MORE THAN SIX -2
    YOUR INCOME TO DEBT RATIO
    UNDER 35% 5
    36% TO 45% 3
    OVER 45%-1
    PAYMENT HISTORY ON ALL ACCOUNTS
    BANKRUPTCY -9
    COLLECTIONS -8
    COURT JUDGEMENT -7
    IRS LIEN -6
    120 DAYS LATE +-5
    90 TO 120 DAYS LATE -4
    60 TO 90 DAYS LATE -3
    30 TO 60 DAYS LATE -2
    ALWAYS PAID ON TIME 4

    The cutoff score in this chart would be 12. Anybody scoring 12 or more would be automatically approved for the loan or credit card. Any body scoring 9 or under would be sent a denial letter. Anybody on the boderline (10-11) would be referred to a credit manager for personal review. Take a moment to figure your score. Did you get the card? If you didn't get the card you must improve the low scoring areas. Some of the tips in this web site can help you. Most of the credit decisions these days, especially credit card companies, will use a computer to score applicants.

    Tip #8 - UNDERSTANDING YOUR CREDIT REPORT
    Understanding what your credit report says is an important step to obtaining an approval from a lender. They will be looking at the same things that are circled below on the sample credit report. It is important to order a copy of your credit report before you apply for a loan or credit card. You will want to check it over very carefully looking for errors, erroneous information, out-dated information, and to add any new information that may be helpful to you. Your credit report should be laid out like the one below with a few minor differences. Look over the sample report below and learn the areas that lenders will take seriously.

    Tip #9 - IMPROVE CURRENT CREDIT REFERENCES
    If you once held a visa or mastercard that was closed and paid off, contact the creditor and ask that it be re-opened with a small credit limit. You may be surprised at how many lenders will be more than happy to accommodate your request if you have turned your finances around. If you had a fairly good payment history that turned sour, and you had a legitimate explanation of your credit difficulties, you may be able to re-open the account. Remember, a Visa or Mastercard is one of the best credit references to have when it comes to getting approved for a loan. If you went into default with a creditor and currently owe them a sum of money, you can negotiate with them. If you agree to pay back what you owe to them, some creditors may be willing to remove any negative information from your report about the account. Call or write the loan or credit card company and direct your proposal to the credit manager. Someone who is in the position to make this kind of decision. Make sure this is done in writing and both parties agree to the stipulations.

    Tip #10 - ADD NEW POSITIVE REFERENCES
    Try adding new and positive references to your credit report. New and positive references include secured cards , finance company accounts, and one-time references. It is important to point out that not all loans will help you rebuild your credit rating. Avoid any accounts that will not report prompt payments to the credit bureaus. Some companies such as gasoline cards, furniture stores, and mortgages will not report to credit bureaus unless you become a couple of months delinquent. If you would like them to report on a monthly basis then at the time of application you can request this. If you have gone through CCCS (consumer credit counseling services) to help you through negotiations with creditors, they will usually be able to help you establish small accounts with Sears, JC Penney, and mercantile bank. Contact your local CCCS branch or call 1-800-388-CCCS for the offices nearest you. Landlords and other people that you pay on a monthly basis can report to the credit bureaus. Some people know to request that their landlord report their prompt payments to the major credit bureaus on a monthly basis. The fee for doing this is usually picked up by the tenant.

    Tip #11 - CONTACT BANKCARD HOLDERS OF AMERICA
    Bankcard Holders of America (otherwise abbreviated as BHA) is a national non-profit consumer organization dedicated to consumer credit education and advocacy. They publish lists of low rate credit cards, a bi-monthly newsletter, and have scores of credit brochures. They also offer some minor credit assistance to members. They will help you get back on track with their invaluable information on credit companies and banks. They will save you a lot of time in researching the credit criteria's for banks as well as giving you lists of reputable credit companies that offer major credit cards that report to the credit bureaus on a monthly basis.

    Tip #12 - BE COMPLETE
    Fill out your credit application as completely as possible. If your application is incomplete, the lender will send a letter asking you for the missing information, or may outright reject you because they think you might be hiding something or because you were possibly dishonest. If you fail to list all of your accounts, you may be rejected also. This is called "undisclosed debts." If you call the creditor and ask what credit bureau they subscribe to you can then order a copy of your credit report and see what accounts are listed on it and then you can make sure you have the same accounts listed on your application. Some applications are called "mini-apps." These are short applications requiring nothing more than your name, address, and social security number and perhaps one or two credit references. Most of the information they rely on is in your credit report. Unless you are filling out one of these applications, please be as thorough as possible to be sure of getting credit.

    Tip #13 - COSIGNING
    If you are having trouble getting a loan or credit cards you can have someone you know with good credit cosign with you. This means that in case you fail to repay the loan your cosigner will then have to step in and legally repay the debt. The lender will qualify the cosigner as well as you when determining to approve the application. If any information about the cosigned loan (negative or positive), is reported to a credit bureau, another lender reviewing your report will view the cosigned account as if it were your own. You can use a friend or family member to cosign with you. It is best that they have very good credit or you may both be turned down. Cosigning is a big step for the person who is doing the cosigning, so make sure you make them feel as comfortable as possible about cosigning with you. Show them your ability to repay the loan. Remember if you fail to repay the debt and the cosigner has to step in and repay it and if they can't, then you both will have ruined your credit history.

    Tip #14 - CREATE A GOOD RELATIONSHIP WITH YOUR BANKER
    A personal relationship with a banker is a good way to increase low credit limits, establish new credit, and to help yourself out of poor credit. Do you know a member of your family or close friend who has really good credit with a local bank or loan officer? Ask that person to set up an appointment for you with a loan officer. An appointment shows you respect the banker's time. Dress as professional as possible for your meeting. First impressions are most important. Explain your situation to him.(i.e., I have no credit and how do I establish some? or My credit is poor, what can I do to improve it?) Once you develop a personal relationship with your banker, you will begin to see things improve greatly with your situation. He can show you ways to help yourself that you probably never thought of. Some of the ideas he will mention are most likely already in this book. Remember, it will take time for things to develop. A friend who is a banker is the best personal credit reference you can have. You can use them on loan, rental, or credit applications as personal reference, with their permission of course.

    Tip #15 - THE CREDIT LOOP
    With this method you will build a credit report of strength, by having many entries on your credit report. If you make sure that they are all current and reflect responsible behavior on your part, you will be in that enviable position of receiving unsolicited credit card offers, many times pre-approved! You will tie-up $340 for 4 to 6 months but as you can see, it is well worth it for quick and good credit references. Here is the system, step-by-step:
    FIRST: Open a regular savings account with any four local banks (not a savings and loan) by depositing the minimum required. Usually $10 to $20. Do this all in the same week. Next you select one of the four banks with the highest initial minimum deposit (around $300) and deposit this amount into your savings account.
    SECOND: Three business days after you make the initial deposit, approach the loan officer and ask for a loan in the amount of your savings account balance. Explain that you will use your savings account as collateral for the loan and that you "need the loan for personal reasons" Ask for a term of 12 months.(You will actually pay it off much faster, thereby creating a good impression.) Make sure the bank will report your payments to the three major credit bureaus. You now have a savings account and a loan for the same amount with cash in your hand.(Sometimes a bank will only loan you 70% to 80% of your savings balance, don't worry, the system will still work.)
    THIRD: Take this cash and deposit it in the second savings account you opened at one of the other banks. Wait three business days for the deposit to be processed. Then once again approach the loan officer at the other bank for a savings account loan going through the same procedure you did at the first bank.
    FOURTH & FIFTH: You repeat this procedure with the two remaining banks. You will then have four loans (for a total around $1200), four savings accounts,(for a total around $1200) and around $300 in cash from the fourth loan.
    SIXTH: Take the money from the fourth loan and deposit it in checking account. Two weeks after taking out the loans you mail a check to each of the four banks covering the first month's payment. Make your second monthly payment two weeks later, etc., etc. As you can see you will have paid off all four loans within six months and you will have created four new good quality entries on your credit report. If you don't want to wait six months, you can pay off the balance after four months, i.e. the eighth payment. Remember that the longer you pay on these loans, the better it will look on your credit report. If you can make payments for 9 months to a year, that is the best of all worlds. This type of credit is called seasoned credit because it has had time to season.

    Tip #16 - MAKE MONEY FOR THE BANK.
    Did you know that it is much easier to get approved for loans if you do not pay off your balance completely at the end of each month? Why you ask? It is very simple. Banks are in the business to make money. Right? The most profitable way for them to do this is by collecting interest from people who do not pay off their balances each month. If you are having trouble getting credit cards or loans approved and they are not up front as to why, try not paying off the balance completely, but pay only 80% of the balance and carry the rest. After 4 months you will have lenders eagerly awaiting your applications for credit cards and loans. You might even receive unsolicited offers in the mail asking you to sign up.

    Tip #17 - OBSERVE THE 30/45 RULE FOR APPROVAL
    Many creditors will examine how much debt you have in comparison to your income. Here is how it works: Add up your monthly payments on all your bills except your rent/mortgage and utilities. Divide your gross (before tax) monthly income by your monthly debts. You should get a percentage. Here are the ranges you need to know: If your debt ratio is 30% or less, you should have no trouble getting credit cards or other additional loans. If your debt ratio is 31% to 44%, your bills are high and you might have some trouble getting additional credit. If your debt ratio is 45% or more, you will probably not get approved for any more credit.There are some ways to lower monthly debt to get the necessary approvals. You can combine monthly credit card payments into one payment at a lower interest rate. You can also negotiate lower monthly payments with your existing creditors.

    Tip #18 - TELL YOUR SIDE OF THE STORY
    If you find incorrect or incomplete information in your credit report, you have the legal right to include a statement on your credit files that explain your side of the story if for some reason you are unable to remove the negative information. The credit bureau may limit your statement to 100 words or less. They must help you summarize if it is necessary. When writing your statement try to be brief, factual, and clear. If you have documentation supporting your side of the dispute, be sure to mention that it is available in the statement also. A good example of including a statement on your credit file is when you refused to pay for a damaged item that was sent to you by mail that you charged on your card. You could summarize in your statement that your payments are past due because you are in the process of disputing an item with that particular company. Until the dispute is settled and your credit report is corrected to reflect this, a 100 word statement can help. Write your 100 word statement only as a last resort if you are unable to get the information removed through normal channels. You can send it to the credit bureaus listed on our fron page. One of the best ways to get back on your feet to solving your credit problems is by using a secured card. The payments you make on your card are reported to the major credit bureaus. Your secured card credit entry looks just like any other on your credit report so creditors will take it seriously just like a major unsecured Visa and Mastercard. These companies ask you to put up a deposit in their bank in the amount at least equal to your credit limit, usually a $100 minimum. It is usually held at the bank as a C.D.(certificate of deposit) or in a savings account. Both accounts earn interest. Your deposit is untouchable until the card is paid off and closed. Some issuers even give you 150% of your deposit as a credit limit. These cards are usually very easy to get. Most people regardless of credit history are approved. They look like any other Visa or Mastercard. No one but you and the bank will know that it is secured! Remember tip #1, a Visa or Mastercard is the best credit reference to have on a credit report. Secured cards are the best way to get one if your credit is poor, or if you need to establish new credit.

    Tip #20 - CONSIDER PAYING UP
    Paid accounts, even those that went into collections, look better to other creditors when paid off. The reason is that a creditor may still be able to take legal action against you to collect the delinquent, unpaid account. A potential creditor will hesitate to lend you money if other creditors are taking legal action against you. In addition, if a judgment, lawsuit, or lien is listed as unpaid, when in fact is has been paid can affect the length of time information will remain on your credit report. Paying-up does not mean paying off. You can have outstanding balances on your accounts and still get credit. In fact, by reducing some of your existing balance, you can actually trigger the creditor's computer to raise your credit limit(s) up to 200%. If you have decided to pay off an existing account that previously was past due or went into collections, you should negotiate with the creditor. By this I mean in return for your payment on the account the creditor agrees to remove any harmful information that was reported to the credit bureaus. Simply send along a letter with your check for payment in full stating that by cashing this check they (the creditor) agrees to remove the negative information that was reported. You would be surprised how often this works especially if the creditor is currently in the red with company profits. It is best not to lie on a loan or credit card application. Lying can leave you open to legal action if you fail to make your payments on time. If you later go through bankruptcy and the lender finds out that you lied on your application, you may be unable to discharge that debt. Lying refers to overstating your income or assets. It can also mean not disclosing your total liabilities owed to other creditors. There is opportunity to present yourself in the best possible light. If you have tangible assets such as cars, jewelry, stocks, and real estate, list what you might believe the current market value to be of the asset especially if it has risen in value. When you list credit accounts, always include their current outstanding balances, not the original amount of the loan. Income from a part-time job, regular overtime, alimony, child support, or income from investments can also be included if you want them to help you get approved.

    Tip #22 - KEEP GOOD RECORDS
    Try to save copies of all your credit applications. Not only will this make filling out subsequent applications easier, it will also help you to be consistent on items such as income, assets, and other creditors on each application you fill out. Of course, if these items have changed then you should state so in your application.
    Lenders do not like to see inconsistencies or gaps in credit applications or credit files. With the amount of credit fraud today, mistakes on an application can cause a lender to wonder if you are who you say you are. They will compare what you have stated on your credit application with what is currently on your credit report. When you order your credit report, you will see how this is very important. Every time you fill out another application the information on your application is updated to your credit file so if your information is not consistent, the credit report will reflect it. Lenders will be looking for consistent applications when deciding whether to approve an applicant.

    Tip #23 - AGE AND THE CREDIT DECISION
    Age can, and often does, play a factor in lending. Although a federal law, the EQUAL CREDIT OPPORTUNITY ACT, prevents lenders from discriminating against borrowers age 62 or older, anyone between 18-61 is fair game. Some lenders welcome younger borrowers because they know that if they catch them early, they have the potential for developing a long lasting financial relationship. Other lenders prefer middle aged borrowers with assets and stable credit histories. If you are between the ages of 18-21 and 55 or older, you may have trouble trying to establish credit. Most lenders will hesitate to give you credit since you have no credit history. One of the best options for your situation is a secured credit card. For more information on secured cards, see tip #19. If your between the ages of 20-25, now is the time to establish a credit history. If you're planning on purchasing a car or house in the near future, you will want a good and stable credit history of at least two years before you plan on a major purchase, assuming your going to finance it.

    Tip #24 - STABILITY
    Stability is important to lenders. Studies have shown that people who move more frequently are more likely to declare bankruptcy than those who do not. In a lenders eyes, home ownership is a sign of stability. Most lenders prefer a borrower who has been at a job for two years or more. They also prefer people who have lived at a particular residence for more than three years. Lenders are aware of the fact that people in urban areas tend to move more frequently than those in rural areas. People who rent versus own are considered less stable. Stability is also important to people who are in serious debt. The more stable you are at your job and residence the better the chance you have of getting out of debt with a stable paycheck and a consistent monthly budget.

    Tip #25 - WHAT IF YOUR APPLICATION IS REJECTED?
    Rejection letters are sometimes called "adverse action letters". Two important pieces of information must be included in the rejection letter. The specific reason(s) why the person was turned down for credit, and the credit bureau's name and address that was used for the credit decision. The reasons why you were declined must be specific. You have the right to a free credit report every time you are rejected for credit. The next step is to write a letter to the credit company explaining why you should get the card. If you have discovered a mistake on your credit report, let the lender know this and tell him a updated copy of the corrected report will be sent for reconsideration. If your credit report is accurate and you were still denied then try to persuade the lender why they should approve you. Include documentation that will help your case. A lot of times a lender will reconsider an applicant if a letter is sent within 60 days of your rejection letter.

    Tip #26 - Getting out of debt without declaring bankruptcy!
    The following is a list of strategies that will break the cycle of increasing debt quickly:1.Try not to incur any additional unsecured debt.(Unsecured debt is any debt not secured by the item being loaned on.) Take all but one of your credit cards out of your billfold and put them in a safe place. The safest place is cut up in an envelope and thrown away, but not everyone has the guts to do this. 2.Join a support group such as Consumer Credit Counseling or Debtors Anonymous and attend meetings on a regular basis. You can learn how others overcame their debt problems and how you can to. 3.Contact the office of Consumer Credit Counseling or another such company and get help in developing a re-payment plan to your creditors. They will help you in developing a budget and contacting creditors for reduced payments. 4.You must keep records of your daily expenses. This will show you how and where your money is going so you can reduce the areas that are the highest. 5.Make a list of all the people you owe money to and reassure them that you will completely pay them off but it make take
    longer than expected. 6.Reduce your outstanding debts to an absolute minimum. Pay off the accounts with the lowest balances first. Make accelerated payments on the rest of the accounts so you stop paying interest as soon as possible. 7.Find some way to increase your monthly income. Rent out a room in your home. Get a second job, or start a profitable sideline business that will increase your income. Remember, this situation is only temporary, but you need to increase your
    income. 8.Continue to educate yourself on the credit system and how it works. Only knowledge of how the system works will help you beat them at their game. 9.By reducing your debt will come the unexpected side effect of raising your cash flow without getting a raise. The less money that goes towards paying off a debt, the more for you. Rapid Mortgage Reduction A quick and simple way to reduce your mortgage at an accelerated pace is to make an additional payment each month over your minimum mortgage payment. Let's say your mortgage payment each month is $1,000. This is made up of principal and interest. Include a second check for as much as you can spare and write on top of the check "Apply to principal only" Some banks automatically apply any extra payments to the principal, but you need to ask first. By following this system, you will have paid off your mortgage years sooner and saved yourself thousands of dollars in interest you can now spend somewhere else, like reducing your other debts.

    Debt Consolidation
    If you are up to your eyeballs in debt then you need to consider a debt consolidation loan. A debt consolidation loan will combine all your monthly payments to your creditors into one manageable payment. It won't reduce the amount you owe, just reduce your monthly total payments up to 50%. Your interest cost will go up because you are taking much longer to pay off the bills. Debt consolidation is done for three major reasons...
    1. It usually means you won't have to declare bankruptcy.
    2. It gives the lender the chance to adjust the interest rate upward.
    3. The lender has the opportunity to add collateral to the loan.

    Tip #27 - GET THE ERRONEOUS NEGATIVE INFORMATION OFF YOUR REPORT
    Q. Is it really possible to get bad credit removed from my report?
    A. Yes. By following the steps below, it is possible to remove all types of negative information from your credit file. For example, a credit bureau is required to reinvestigate disputed information with your creditor. If the information is found to be inaccurate, it must be corrected. If the information is obsolete, it must be deleted. If the information can no longer be verified, it must be deleted. By negotiating directly with the creditor that put the information on the report, you can have the creditor instruct the bureau to remove or correct the bad credit information. Keep looking until some incorrect information is found on your report, and request that it be corrected or removed. The following is a step-by-step plan for removing negative information from a report.

    1. Obtain your credit report and circle the items you believe incorrect, out of date, or obsolete.
    2. Send the appropriate credit bureau your credit report along with a dispute letter. Only include three incorrect items at one time, otherwise the bureau may think you are trying to be frivolous. Credit bureaus do not like form letters. They ignore them.
    3. Fill out your dispute letter completely indicating all items you are disputing with the creditor names, account numbers, and addresses. Indicate why you believe the item(s) are incorrect. Be specific.
    4. Keep track of the dates when you mailed the dispute. They have 30 business days to act from the time the dispute arrives in their offices, not from the date of mailing. We would suggest sending any dispute certified and return receipt requested. It is $2 more, but well worth it. The credit bureau can't lie and say they never got your mail.
    5. Wait for the credit bureau(s) to investigate the dispute. Remember, they get 30 business days. Saturdays and Sundays are not business day to them.
    6. Repeat the cycle from step 1 until all erroneous negative information is removed.
    7. Keep accurate records of all correspondence sent to the bureaus. Photocopy anything sent to the bureau. If the dispute is done by telephone, get the name of the person you talked to. Also write down the date and time of call.

    Q. What can I do with accounts that I have already paid off but show up with negative remarks?
    A. Many creditors close your file and store it in another location after you pay off an account. They simply do not have the time to find and dig out your old file whenever someone disputes and old account. When we say old, it usually means two-three years since the pay-off date. Because of this filing system, the negative information may not be verified when the credit bureau reinvestigates the dispute. Remember, if the disputed information can't be verified in 30 days, it must be removed!!!

    Q.How do I improve my credit report after filing bankruptcy and possibly remove my bankruptcy.

    A. Any debts that were discharged during bankruptcy will show up as either "Charge-offs" or "BK Liq Reo". The bankruptcy will itself appear under the public record section as a Chapter 7 or 13. The only way to remove the bankruptcy itself from your credit report is to dispute it directly with the credit bureaus. You can usually find some mistake in the reporting of the bankruptcy, since the information is entered by a human. As to the items charged off in your bankruptcy, the best way to remove them is to negotiate directly with the creditor. Negotiate with the creditor that if you agree to pay off a portion of the debt off that they must remove the negative information from your report. Of course, get this in writing signed by both parties first. This does work. Some people also add a consumer statement up to 100 words saying that they never filed for bankruptcy or that the accounts included in the bankruptcy have been paid in full.

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  2. panafrica

    panafrica Well-Known Member MEMBER

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    This is great information GrandHustle, thank your for posting it! I do have one small request though, if you obtained this information from another website, please list the link.
     
  3. MANASIAC

    MANASIAC Well-Known Member MEMBER

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    This is some real Gangsta Info Pimpin.

    Keep pumping it ya dig.
     
  4. Monetary

    Monetary going above and beyond PREMIUM MEMBER

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    I think this is great information for those who must deal with credit. If you can, STAY AWAY FROM IT.

    I know most people believe that credit is unavoidable nowadays and that everyone must use it. But, trust me, it's avoidable. You can live without it. Just plan wisely.

    If you want to keep most of your money and still use credit, then borrow money from a friend.

    For those who like to use credit cards and avoid carrying cash on them, then get a debit card. It acts as a credit card. The amount of money in your bank account is the limit on the card for most banks. If you don't have one, then ask your bank about it. Btw, I think everyone should keep some amount of cash on them.
     
  5. GrandHustle

    GrandHustle Well-Known Member MEMBER

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    Hello PanAfrica,

    Thank you of for the reply. I bought resale and distribution rights to the information posted in the thread in 2002. Throughout the years and even now I sell this information. Its been beneficial to me. I thought it could be beneficial to our community.


    Hello Manasiac,

    Thank you for your reply.


    Hello Monetary,

    Credit is outright necessary for us to obtain various properties. Example we may not have 300,000 in liquid assets to purchase real estate but credit can allow us to this. The whole US system is based on a credit system for the most part. We could go and on about this. You do have a very valid point. Any many cases its better to pay for items outright. However I don't suggest borrowing from friends. (OR family)

    Thank you for visiting the thread
     
  6. HODEE

    HODEE Well-Known Member MEMBER

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    Good info. Thanks for sharing.

    You can't rent a car, hold tickets without a credit card. One could pay for all those things on their bank debit card. If you want to buy a house you have to get into the stream and get wet in debt.
     
  7. $$RICH$$

    $$RICH$$ Lyon King Admin. STAFF

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    great info that we can build upon thankz for this here......

    their was things i didn't know until now thankz
     
  8. karmashines

    karmashines Banned MEMBER

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    Do you have a website where you are selling this information?
     
  9. Monetary

    Monetary going above and beyond PREMIUM MEMBER

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    Credit is the illusion of inclusion. It's the keeping up with the Joneses. I am not against credit. I'm against paying double and triple for things. If you document all of the money that is spent out on finance fees and late charges, you'll see that you're paying too much for whatever it is you bought. Of course, I'm assuming that you miss the due date for a payment here and there for whatever reason...legitimate or not.

    Financial knowledge and credit savy will help us to be financially stable. But, this takes descipline. And that's where it ALL begins...DESCIPLINE. After you have developed your plan, you MUST stick to it. And that's where a lot of us go wrong.

    You mentioned that we should understand the credit system and how it works. Well, part of that is knowing where you are financially. Most people don't know where they are financially. But, the banks know. The credit institutions know. And they know that most people aren't saving...which puts you in a position where you're living from paycheck to paycheck. And that's not good when you've borrowed money and have to pay it back. And what's sad is that people who earn $90,000 and above are in the same financial situation as someone who's in the working poor.

    I'm in the process of developing several ways to bring in money. I think everyone should do this. You should always have your money work for you and not just you working for the money. You should have a job or two. You can be a financial partner to a company. You don't do the work but you get paid because you bankroll the company. Or, you can get into the buying and selling of real estate or housing (apartments or houses). You can invest in stocks and bonds on your own or via an investment club or group. We all should have additional funds coming from somewhere. More money coming in is always better than more money going out. It's as simple as that.

    Wait a minute. I got carried away. You're only speaking of credit. My bad. I'm speaking of a way of living. :lol:
     
  10. Nisa

    Nisa Well-Known Member MEMBER

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    Thanks I needed this,im ready to start my financial aspect of life..stocks...bonds...real estate,good credit..etc etc
     
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