Credit Restoration Importance

Credit Restoration – Why is it Important?

What is Credit Restoration? Why is it Important?

People suffering from poor credits often find themselves puzzled, frustrated, and troubled. With a bad credit score and several questionable items on their credit report, how can they, or potential lenders for that matter will ever see them in a favorable light?

If you too are someone who has made your credit and finances a big time mess and are now sinking in the mire, struggling to get your loans approved or making a no drama purchases, then credit restoration is your need at the moment.

What is Credit Restoration?

Credit restoration, which is also referred to as credit repair, is the process fixing a bad credit report and rebuilding its health in a way that you become eligible to get loans, take a job, and get your purchases approved without a hitch. It involves eliminating all the negative entries from your report and improving the FICO score, after which you may qualify for loans with decent interest rates. The aim of credit restoration is to ensure that you are creditworthy and can pay off your debts on time.

Why Credit Restoration is Important

Banks, credit card companies, and other establishments approve you for a loan or credit card on the basis of your 3-digit credit FICO score that lies between 300 and 850 for consumers. The higher the score, the higher is your creditworthiness. If you have a score over 740, which is considered excellent, you will qualify for the best loans & rates and get approved for higher limits as well. If you have a good credit score (700 or above is generally considered good), you are likely to obtain home and vehicle loans, mortgage, and insurance with great ease. However, if so is not the case and they find it bad (anything ranging between 300-579) then chances are bright that your loan applications and credit card requests will be turned down.

After assessing the risks involved in lending you money, bank or lenders will make a decision. With a sound credit score, your requests will get approval right in the first place with reduced interest rates. While on the flip side, if you are up with a bad credit score, you’ll be taken as a high-risk borrower. This means that you will be charged higher interest rates given a smaller credit limit. People with really poor scores may be denied for the loan/credit card too.

Rewards of having good credit

Having a clean credit report is important for more than one reason- credit restoration will help you have an entirely fair, accurate, and substantiated credit report that will bring along a long list of benefits. People who have a good credit report in hand are considered more responsible and trustworthy and they win the trust of potential lenders. Other rewarding benefits of having a perfect credit report includes-

  • Buy a Home or Apartment: People with a bad credit report have to face several hardships while buying a property for their own. People who choose to get credit restoration services and get their credit report improved can get easy home loans at decent rates, something that will help them save some serious amount of their hard-earned money.
  • Get a Job: No kidding here- a good credit report can contribute in helping you land your dream job. Credit scores may have a serious impact on your employment opportunities; your employers may choose to go through your credit history and if they find it deteriorated with low credit scores, you might lose a promising opportunity. Credit restoration will avoid such unlikely confrontation and let you excel in your professional life the way you want.
  • Finance a car: No matter you are turning to your local bank to get an auto loan, or making up a mind to opt for dealer financing, your credit history and scores will be taken into account. Your good credit score will let you negotiate for lower interest rates and relish a difference of thousands of dollars.
  • Rent an Apartment or Home: More often than not, all landlords and rental agencies tend to check the credit history of those people who want to take their property on rent. This is done in order to evaluate that whether or not as tenants you are able to pay your rent on time. With credit restoration services you can easily secure the rental property you think is ideal for you.
  • Borrow Money: If you are in need of loans, then borrowing money becomes easy with strong credit scores. Lenders validate your credit scores so as to determine the interest rates and judge your ability to pay off the loans.
  • Get a Credit Card: You can obtain excellent credit card deals if you have a great credit history. After analyzing your credit scores, credit card companies provide you a credit card with lower interest rates and also offer some additional perks like rewards, handsome cash back, and cash advances.
  • Make a Significant Purchase of a Furniture or Appliance: If you are all set to make a major purchase of furniture or a modern appliance on credit, then your credit scores are going to play a crucial role. Credit restoration will empower you to go ahead with your purchase with confidence and align your activities in an exemplary fashion.

Aforesaid benefits reflect why you should seriously consider credit restoration. To legally clean up your credit report and improve FICO scores, it is recommended to connect with leading credit repair companies. This will help you shape a better credit report and lead to the path of a brighter financial future.

So, are you keen to take steps and get your credit report cleaned? Get in touch with leading credit repair companies and avail their credit restoration services to enjoy the perks of getting low-interest loans and attain the best financial options and opportunities.

Credit Repair for Couples

Credit Repair for Couples

If you’re in a serious relationship or are married, chances are you have merged almost everything together. Naturally, many new newlyweds assume their credit scores will be legally combined as well. But this is not true. Even if you’re married, you can’t combine your individual credit history with your spouse’s. Credit repair for couples can be tricky, since there are two credit scores to take into account.

How Credit Scores for Couples Actually Works

Even though your credit scores do not merge, you would be negatively impacted by your significant other’s bad credit score. For instance, if you and your spouse are considering purchasing a house together, both of your credit scores impact the loan offer you’ll receive. So even if you have perfect credit, if your spouse has poor credit, you won’t be able to get the best interest rate on your loan. In fact, if one score is really low, you might not qualify for any joint financing at all.

This is why it can be difficult to build a financial future together. It can be even more challenging when you have a very different credit history from your significant other.

Steps to Repair Credit Together

Thankfully, there are ways that you can work with your significant other or spouse to repair your credit together.

  1. Start by pulling both of your credit reports from all three reporting agencies. Go through all three credit reports thoroughly, item by item, to make note of anything that is a negative listing. If there is a negative listing, send a letter to the credit bureau requesting validation for this debt. This is a process that can take months, but if you do it, it will be well worth it. Even a single negative removal may significantly impact your credit score
  2. Pay off any debt that you and your significant other have. This can be a touchy subject to broach. In some cases, one person in the relationship might have a significantly higher debt than the other. Working to pay off any debt that either party has can be beneficial for both of you. This is especially true if you are able to collectively pay off any debt that hasn’t been sent to collections.
  3. Once you have removed any negative listings from your credit report that you can, and paid off any of your recent debt, consider cosigning a credit card with your partner. If you do this and you keep the card in good standing (e.g. by paying off each of your monthly balances on time), your credit scores may improve.
  4. Naturally, you want to make a budget together and stick with it if you haven’t already. Record every penny. Get a good sense of where your money is being spent so that you can allocate funds as necessary.

Getting Help from the Best Credit Repair Companies

There are companies out there that can help you repair your credit. They’ll go through all of the credit repair steps for a small fee. These companies can provide a great deal of benefit for couples. They provide an even bigger benefit if you sign up together because in most cases you get a great discount for signing up as a couple. There are a handful of reputable credit repair companies that offer couple programs, which you and your spouse might want to use.

  1. Ovation Credit offers couples a 20% discount for both parties signing up.
  2. Sky Blue Credit gives you a couples discount upwards of 16% off the monthly plan, charging you only $99 per month instead of the normal $118 per person.
  3. Lexington Law offers 50% off the first work fee for you and your spouse when you sign up together.
  4. The Credit People give you $20 off when you sign up with a spouse.
  5. CreditRepair.com lets you sign up for just $50 each, and with that you can sign up family or friends too.
Married couple discussing credit repair companies

How Marriage Affects Your Credit Score

How Marriage Affects Your Credit Score

Marriage is a wonderful thing, and yet in one instance it can bring with it a serious problem: credit. Marriage affects your credit score, but it’s often not an issue that newlyweds think about.

How Both Scores Are Taken Into Consideration

When you get married, your credit scores do not combine. However, your spouse’s credit score impacts your ability to get a good interest rate. For instance, if you have very poor credit and your spouse has very good credit, both of these scores are considered when you apply for a joint loan. In the worst case, you might not get a loan at all. In slightly better cases you get the loan but with extremely high interest rate.

Financial Liability

Another major problem is the fact that you can become financially liable if you choose to combine assets. Consider, for example that you have worked tirelessly over the past few years to cultivate a great credit score. You have finally reached the 800 mark, but your spouse has done the exact opposite. If you fail to discuss personal assets and debts before you get married, it can land you in a tight spot. You don’t want to wait until after the honeymoon is over to learn that your spouse has three different accounts sent to collections and a myriad of bills that are not regularly paid on time.

Be Honest

The main learning is that you should have honest conversations. Then, carefully choose whether or not to put both of your names on things. You might think to put both of your names on a car will make it easier to pay the regular bills. But in so doing so, you might not realize that now your credit will be negatively impacted. Doing so without realizing this ahead of time may subsequently drop your credit score as a result.

What’s more, couples who are brand-new to marriage and might not necessarily talk about every aspect of monthly bills might set aside money for a specific mortgage or electricity bill but then one of the parties forgets and doesn’t pay on time. Even small things like paying a bill a few days late can negatively impact your scores.

How Credit Repair Can Help

There are other options if you and your spouse need help. There are organizations that help you to repair your credit as a married couple.

Incorrect negative marks on your credit history and many other things can all be rectified within a few months to help you improve your credit score. This is wonderful news for new couples, especially those who are looking to purchase their first home or maybe their first car together. By taking a few months to work with a professional service and improving both scores, you can set yourselves up for better interest rates when you go in to make a decision.

Credit Repair Companies That Work With Couples

These companies offer great programs for couples who want to work together to repair their credit. The top five companies that you might want to consider include the following:

  1. Ovation Credit offers couples a 20% discount for both parties signing up.
  2. Sky Blue Credit gives you a couples discount upwards of 16% off the monthly plan, charging you only $99 per month instead of the normal $118 per person.
  3. Lexington Law offers 50% off the first work fee for you and your spouse when you sign up together.
  4. The Credit People give you $20 off when you sign up with a spouse.
  5. CreditRepair.com lets you sign up for just $50 each, and with that you can sign up family or friends too.
credit-card-companies

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

The average household has just over $16,000 in debt. However, this doesn’t mean that you are out of luck. There are things you can do to improve your credit score and help reduce some of your debt. How? Simply ask your credit card company to help you with one or two of these five things.

1. Waive late fees

Everyone panics when they realize that the deadline for payment has passed. The issue that credit cards charge you an average late fee between $10-$49. What most people don’t know is that many banks will erase the first late fee if you simply ask them.

In fact, 89% of people who ask will get get the fee waived. This is something very important for you if it is your first time being late. It’s always best to have a pristine record, but sometimes there are legitimate reasons. There might have been a family emergency or an illness. Obviously, don’t make a habit of calling to ask for forgiveness, but every once in a while if something goes wrong, simply talk to the credit card company or the bank. Ask them if they can get rid of that fee. They are people too, and you may be surprised by how often they are willing to make exceptions.

2. Lower minimum payments

Ask for a lower minimum payment. If you have currently fallen on hard times, do not hesitate to call your credit card company and ask them about this If, for example, you have recently become unemployed, calling to ask about a forbearance agreement or long-term repayment plan something like this to help you press pause essentially on the deck below until you find another job. This will help me to stay in good standing without breaking your bank.

3. Reduce your APR

Ask your company to reduce your APR. But, be prepared to make a case. There are a negotiation tactics you can use.

If you receive mail from other credit card companies asking you to sign up now, don’t necessarily throw it away. While you might not plan on using it, keep it to negotiate with your current credit card company. This proves to your existing credit card company that you have other options and that other companies want your services. For instance, show them that the competing credit card is offering you a 15% interest rate and that yours is currently at 20%. Be polite, but ask them clearly if they can match that 15%.

If you have been a longtime client, reminds the company that you have been a loyal customer.

If your bank offers to reduce your APR by a few percentage points, but don’t hesitate to ask for a little more than that. 78% of people that ask for a lower APR end up getting one. This makes a big difference. With $5000 of credit card debt and an APR of 18%, it would take eight years to pay it down with a $100 monthly payment. On the other hand if you get your interest rates dropped by just 3%, it would only take a 6.5 years.

4. Change your due date

If you have an odd due date for your bills, call the company to change it. A lot of people end up having bills at various times throughout the month because of when they signed up for service. If you forget to pay your bill regularly because your credit card payment comes in between your two paychecks, just ask the company to change it. It’s all about making your payments on time, each time. If you only get paid once a month at the first of the month, ask them to set a due date at the beginning of the month before your money has gone to other needs.

5. Ask about bonuses

While you are calling your credit card company company, also ask if they have any additional rewards that you might be able to use. A lot of people miss out on unused and untapped potential with a credit card. Today, almost every single credit card out there as an option for a perk. These perks are things that give you rewards for each dollar you spend. If you’re smart about it, you can use a credit card to help rebuild your credit score will simultaneously earning points that get you free plane tickets or free meals at your favorite restaurant.

Takeaways

After all of these changes, you may feel like you’re getting back on track. However, perhaps there are incidents before calling your credit card company that leave a stain on your credit report. What can you do in that case? You always have the option of choosing a top credit repair company in that situation. A reputable credit repair company can also increase your credit score. Often, some combination of credit repair options is needed for optimal results.

buying a car with bad credit

Tips For Buying a Car With Bad Credit

Tips For Buying a Car With Bad Credit

Having bad credit can put you in a bind. Without a good credit score, you can’t obtain support financially for the most common adult purchases like that of a house or a car. Here are a couple of tips to consider when buying a car with bad credit.

1. To improve your credit score, don’t pay for everything with cash

Paying for a car in cash is not going to help you prepare your credit. The only way for you to improve your credit is to take out a loan and make small payments on a regular basis. You can subsequently improve the interest rate that you receive on any loans. Understand that by taking out a car loan for a new or used vehicle, there’s a chance for you to repair your credit or build up some credit out of nothing. Every step you take toward improving your credit score will help you later on down the line.

2. Lower your interest rate with a cosigner

The second is doing something to combat the interest rate you receive. Obviously people’s biggest concern here is the fact that if you have a bad for you were going to get slapped with a higher interest rate. You want to consider getting a cosigner in this situation.

If your a parent or spouse has a very good credit score, ask the auto dealer to give you an estimate for your interest rate if both of you were owners of the car. Having cosigners generally means that they take the average of your two scores which can help you. Even viewpoints can help you reach the next level.

3. Have a high interest rate? Consider a higher down payment

If you need to take out a loan with a high interest rate, you’ll be better off in the long run if you can afford a higher down payment. The more cash you can pay upfront, the better the interest rate and deal you will get on the car itself.

Understand that a lot of people do not buy their cars in full. Most people go to a dealer and pay their minimum and then get charged a ridiculously high interest rate for the next 10 or 15 years. You can avoid this by offering a $5000 down payment instead of the asking price of $2000. Something like that shows that you’re good for the money and that clearly you are getting the loan to help your credit.

4. Don’t splurge on your purchase

If you can, consider saving up the cash you need for a lower rate car, perhaps one that is used and only cost a few thousand dollars. If you can do this, you can show the dealer that you have the full price in cash but that you still want to take out a loan. By paying a higher down payment and already having the money set aside, you can give yourself financial peace of mind while potentially lowering the interest rate your will be charged.

5. If all else fails…

Remember to take into account whether or not you are able to afford the interest rates offered to you. Try different dealers. If nothing pans out, postpone leasing your car for six months and use that time to really work at improving your credit score and saving money to make a bigger down payment.

Why debt is important for a good credit score

It may seem counterintuitive, but in order to prove that you are worthy of receiving credit, you have to take out of debt. Most people, especially those who went to college after 2009, have been taught that debt is bad. And yet, the one secret that the credit-savvy know is that debt is necessary to build credit.

The trick is how you look at it. More financially savvy individuals will see that minimal debt that you can pay back is helpful. The word “debt” is not necessarily a bad word. The more financially savvy individuals will tell you a completely different story. In order to prove you are worthy of receiving credit, you have to prove that someone can give you money and you can pay it back in a timely fashion.

The more you borrow money and pay about a timely fashion, the better your credit score looks because you have built a reputation for paying that. So remember, controllable debt is good.

Takeaways

Review these 5 tips when buying a car with bad credit:

  1. Don’t pay for the entire car in cash. Rather, take out a low-interest loan to show that you are credit-worthy.
  2. If you are given a high interest rate, consider getting a cosigner.
  3. If you put down a higher down payment, your loan will be smaller. Therefore, the total interest you’ll pay will be lower as well.
  4. Get an economical car. This is not the time to be buying a new high-end luxury car.
  5. If all else fails, try different dealers or even hold off on getting a car. Instead, work on getting your credit score back up and try again. You can use one of our recommended best credit repair companies to help improve your credit score and get you back on track.
legit-or-scam

Is Legit Credit Repair Real?

Is Legit Credit Repair Real?

If you find yourself with a credit score lower than what you really want, it can be all too easy to jump at what appears to be the first chance to fix your credit. The sad truth of the matter is that many websites which post articles on credit scores or which have links to credit card companies often don’t have your interests in mind. Some of these ads might boast the ability to help you repair your credit instantly. There are many scams out there, but there is also such a thing as legit credit repair. The trick is to know how to identify which ones are which.

If you are able to do this and find a great credit repair company, you can avoid getting scammed and you can start saving thousands of dollars in the long run. It’s important to know how to distinguish the legit credit repair companies from the scams.

Debt management organizations

Credit repair agencies will help you improve your score in one of two ways. The first is by helping you manage and pay off your debt. The second is by disputing any negative items on your credit report which are not true.

First of all, repairing your credit score by managing and paying off your debt has no shortcuts. This is the type of credit repair that usually involves a lot of hard work and a lot of time. If you are truly serious about improving your credit score you might need to get better about managing her finances. These are the groups I can help you do that. Most of the debt management organizations are nonprofit which means that their goal is not to make money off you like other companies but to help you and educate you.

These groups encourage you to engage in self-help so that you can repair your own credit. This starts with understanding what makes up your credit score and what things build better habits and how you can repair your credit in the long-term. All things in life worth having will take a lot of effort and a lot of time. Nothing worth having is acquired easily.

What it’s like working with them

When you work with these companies, they’ll first want to get a sense of your comprehensive financial picture before they advise you. So, they’ll probably start by looking at your credit. And if your credit is really bad, chances are you have that. Effectively managing that that will help you to increase your credit score. These organizations help you set up repayment plans with your creditors. They act as a Coordinator between you and the creditors. They can help you lower any interest rates are facing and help you to change your total monthly payments.

Another perk to setting up a plan with a debt manager is that they might let you pay off your debt with a lump sum. When you pay off your debt with a lump sum, something that you can typically do if your bills have been sent to collections, you won’t have to keep track of dozens of bills or each different due date. Instead you can have it managed in one day.

For a lot of people, especially people who are faced with bad credit and a lot of debt, working with different companies, getting everything straight, sifting out old stuff from current stuff and figuring out what has to be paid when is exhausting and terrifying. When you have somebody that you pay to act as a Coordinator on your behalf, it takes away that fear.

Disputing negative items

Other credit repair agencies help you to dispute items on your credit report. These companies look over your credit report from all three of the credit bureaus and then they draft dispute letters to object any negative items. By law you have the right to dispute negative items on your credit score. You can dispute negative listings that you think are untimely, incomplete, unclear, unverifiable, or inaccurate. If the issue cannot be verified then it has to legally be removed from your credit score. One example of what an unverified thing means is, in an instance where one of your creditors when out of business but there’s no way for the three credit report euros to verify any item on your report from the creditor so it has to be removed.

Again, the nice thing about having agency represent you is that they are persistent. If these negative items are not removed immediately they will continue to dispute them in order to maximize the chances of getting the outcome you want. These companies will charge you an initial startup fee which can range from anywhere between $20 and $100 but the average fee is about $60. Some of them won’t even let you pay until you get results while others have a money back guarantee if you choose to no longer use their services.

Avoiding the scams

No matter which method you choose to improve your credit score, check the companies by name. Simply Google them and see if they have a long history, see if they have a lot of consumer feedback. Check and see if they have a Better Business Bureau rating. Take into consideration how you heard about the company. It was a late-night television advertisement it might not be reputable. If the company has been around for 20 years, chances are it’s a legit credit repair service.

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Credit Card Statute Of Limitations By State

Credit Card Statute Of Limitations By State

What is a Statute of Limitations?

Debt collectors and creditors only have a certain timeframe to sue you for unpaid credit card bills. The statute of limitations protects you. Debt collectors and creditors cannot sue you after the evidence has disappeared. Debts that have passed their statute of limitations are called time-barred debts. This is why, if you have unpaid credit card debt, you should know your state’s statute of limitations. For an in-depth look at statute of limitations, check out the article to learn everything you need to know about credit card statute of limitations. Below is more information about the statute of limitations by state.

Difference in Statute of Limitations by State and Individual

State laws determine the statute of limitations on credit card debit. Therefore, you should check out the statute of limitations for your particular state. Our state by state listing below is a great starting point. When looking at your specific state laws, you should understand that many state laws and codes don’t exactly use the word “credit cards” or “credit card agreements.” You should look for phrases like “written contracts” or “open accounts.”

Another important thing to consider is that legislation can change these state laws. Amendments, recent court rulings, and different applications of the law are all natural results of the law-making process. That’s one of the reasons why you should read the state laws with an open mind. Your interpretation of your state law may not be the one that’s actually practiced. This is why it’s important to consult a professional.

Judges, in particular, may interpret state laws differently from each other. On top of that, those court rulings may be overturned. When considering your own case, you should know that your particular judge may rule on your case based on where you live or where the card issue is located. Therefore, it’s important to know your state’s statute of limitation laws.

A Note on Our Listing Of Statute Of Limitations By State

Below is a state by state listing of open-ended accounts, written contracts, and oral contracts. Read more about a closer look on how these different types of debts can affect you. The table below is for informational purposes only and will be a great starting point in researching the statute of limitations for your particular date. Please double-check your current state laws and rulings by going to a local law library, contacting your state consumer protection agency, or doing some research on the internet. This may also be a good time to consult a lawyer or reputable credit repair company.

State by State Listing

StateCredit Card AccountsWritten contractsOral Contracts
Alabama3 years3 years6 years
Alaska3 years3 years6 years
Arizona6 years6 years3 years
Arkansas5 years5 years3 years
California4 years4 years2 years
Colorado6 years6 years6 years
Connecticut6 years6 years3 years
Washington, D.C.3 years3 years3 years
Delaware3 years3 years3 years
Florida5 years5 years4 years
Georgia6 years6 years4 years
Hawaii6 years6 years6 years
Idaho5 years5 years4 years
Illinois5 years10 years5 years
Indiana6 years10 years6 years
Iowa10 years10 years5 years
Kansas3 years3 years3 years
Kentucky5 or 15 years15 years5 years
Louisiana3 years3 years10 years
Maine6 years6 years6 years
Maryland3 years3 years3 years
Massachusetts6 years6 years6 years
Michigan6 years6 years6 years
Minnesota6 years6 years6 years
Mississippi3 years3 years3 years
Missouri5 years5 years5 years
Montana8 years8 years5 years
Nebraska4 years4 years4 years
Nevada4 years4 years4 years
New Hampshire3 years3 years3 years
New Jersey6 years6 years6 years
New Mexico4 years4 years4 years
New York6 years6 years6 years
North Carolina3 years3 years3 years
North Dakota6 years6 years6 years
Ohio6 years6 years6 years
Oklahoma5 years5 years3 years
Oregon6 years6 years6 years
Pennsylvania4 years4 years4 years
Rhode Island10 years10 years10 years
South Carolina3 years10 years10 years
South Dakota6 years6 years3 years
Tennessee6 years6 years6 years
Texas4 years4 years4 years
Utah6 years6 years4 years
Vermont6 years5 years5 years
Virginia3 years6 years6 years
Washington6 years6 years6 years
West Virginia10 years10 years10 years
Wisconsin6 years6 years6 years
Wyoming8 years10 years8 years
Tennessee6 years6 years6 years
Texas4 years4 years4 years
Utah6 years6 years4 years
Vermont6 years5 years5 years
Virginia3 years6 years6 years
Washington6 years6 years6 years
West Virginia10 years10 years10 years
Wisconsin6 years6 years6 years
Wyoming8 years10 years8 years

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Statute of Limitations

Credit Card Statute of Limitations FAQs

Credit Card Statute of Limitations FAQs

What does it mean to have a statute of limitations on my debt?

A credit card statute of limitations is the limited time creditors and debt collectors have in order to file a lawsuit to collect their debt.

When does the statute of limitations period begin?

Generally speaking, the credit card statute of limitations begins from when the payment was due. For open-end accounts like credit cards, the statute of limitations begins starting from the due date of the first payment. It may vary by state.

How do you calculate when the credit card statute of limitations has expired?

To find out the deadline for creditors and debt collectors to file suit on a debt, simply add the number of years of the statute to the start time.

Does the credit card statute of limitations eliminate my debt?

No, the statute of limitations only limits what creditors and collection agencies can legally do through the courts after a certain period of time.

Does the statute of limitations eliminate what’s in my credit report?

No. The statute of limitations and the length of time a debt staying on a credit report are not the same thing. A bankruptcy, for example, will remain on a credit report for 10 years regardless of what the statute of limitations is.

Even if a credit card statute of limitations has expired, can a court still rule against me?

Yes. It’s up to you to raise the defense that your debt is older than the statute of limitations. You must add this to your defense against the lawsuit. If you can prove this, you won’t have to pay the debt.

Can debt collectors still attempt to collect the debt after the statute of limitation expires?

Yes. A debt collector can still ask for voluntary payment of an expired debt, even though you cannot be forced by the law to pay the debt. In fact, some may use aggressive tactics such as tricking debtors into acknowledging their debts, which starts the countdown for the statute of limitations to begin again.

So, what should I do when a debt collector calls me for an old debt?

Some experts believe that you should simply ignore calls about ancient debts. You can send them a letter saying that you don’t recognize the debt or to ask them to verify the debt. The main thing to remember is to not say or do anything, whether it’s on the phone or in a letter, which in any way, acknowledges you owe the debt. This also includes making a small payment.  In some states, doing so may revive or extend the statute of limitations.

Are there any laws to help me out?

Yes, there is a federal law called the Fair Debt Collection Practices Act (FDCPA). It basically says that debt collectors cannot threaten you with legal action on time-barred debt or debt where the statute of limitations has ended. If the creditor or debt collector knows that the statute of limitations has passed and still sues you, they may have violated the FDPCA. If you’re unsure whether the statute of limitations has passed, you can ask the debt collector, who is required by the FDPCA, to tell you the truth.

Should I know what type of legal debt I have?

Yes, definitely. Your statute of limitation is partially determined by the type of debt you have. There are 4 types of legal debt agreements: a written contract, an oral contract, a promissory note, and credit accounts. A written contract means that you agree to pay on a loan under the terms written in a document that you and your debtor have signed.

Like a written contract, an oral contract means you agree to pay back the money loaned to you by someone. However, this contract is verbal. Verbal contracts are legal but tougher to prove in court.

You also want to determine whether it’s a credit account, and if so, is it open-end or closed-end credit? Open-ended accounts are revolving lines of credit which generally means that you can use it repeatedly. Your payments will vary based on how much credit you’ve used within a particular period of time.

Closed-end credit is generally a single transaction with the number and amount of payments fixed. A good example would be a house or car.

What do the differences between open-end and closed-end credit have to do with the statute of limitations?

A lot actually. The statute of limitations for open-end and closed-end accounts are often different. The statute of limitation for an open-end account is not always clear. There are several states with a unique statute of limitations applied to credit card accounts.

Furthermore, in order get a longer statute of limitations, many creditors try to characterize a closed-end account as open-end. Some creditors may also do this to get away from providing more detailed disclosures needed for closed-end credit.

Is there are a difference between waiving, extending, and reviving the statute of limitations on a debt?

Yes, there are crucial differences between the three especially in terms of how you can be tricked into paying on debt where the statute of limitations has passed. Waiving the statute of limitations on a debt means you give up the legal right use that defense later on. The law makes it hard to accidentally waive your statute of limitations by accident. A court will only uphold the waiver if you knew what you were doing when you waived your statute of limitations on the debt. If you think you’ve waived your statute of limitations, you should still raise that as a defense and force the creditor to prove that you waived it.

Lengthening the statute for a period of time stops the clock, of which there can be multiple reasons. One reason would be having an agreement with the collector and extending your time to pay the debt.

Reviving the statute of limitations basically means you’re starting the entire period again. In some states, making a partial payment or acknowledging a debt you haven’t been paying may cause the statute of limitation to revive. In other states, partial payments just extend it rather than reviving it. You can also revive it through a new promise of making payments. In many states, the promise can be oral while in some, it must be in writing.

Where can I go to learn more about my credit card statute of limitations?

Since the credit card statute of limitations on debt is set by the states, it will depend on what your state law says and what type of debt you have.

You can also research your state laws by going to a local law library, contacting your state consumer protection agency, or doing some research on the internet. This may also be a good time to consult a lawyer. A reputable credit repair company may also help you to fix your bad credit history.

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How To Improve Your Credit Score In 2017

How To Improve Your Credit Score In 2017

The New Year is a great time to set new goals, and it gives people the fresh start they need to make the changes they desire. At the beginning of each year, around two-thirds of Americans vow to make their lives better by having a New Year’s resolution. Out of those two-thirds, only 8% achieve their goals. Improving credit scores and getting out of debt is among the most popular resolutions each year. With so many people desiring to improve their credit scores, why do most fail? The answer is that most goals fail without having a concrete plan in place. If improving your credit and getting out of debt is one of your resolutions this year, having a roadmap ensures you will improve your credit score in 2017.

A credit report is simply a compilation of information obtained from lenders that an individual has used. The information in a credit report determines your credit worthiness as a borrower. In a nutshell, a credit report is a measuring tool to analyze how a person manages debt and their likelihood of repaying a loan. A credit report also depicts a person’s spending behaviors. Debt to income ratios could indicate if a person is spending more than their ability to pay.

Credit affects many important areas in life. Everything costs more with poor credit scores, which often makes it even harder to improve your credit score. While resolving to improve your credit score may not be the most glamorous New Year’s resolution, it may be one of the most important. The financial freedom and self-discipline that comes from seriously improving your credit score will be an investment you cannot afford not to make. Here are the steps to keep your resolution and improve your credit score this year.

1. Take an honest assessment of your credit

The first step in improving a credit score is to know exactly what needs improvement. In order to make an effective get out of debt plan, take some time to understand your current credit situation. Set aside a day and time that you can truly delve into your finances to create a plan.

A crucial part of improving your credit score is being honest with yourself. One of the most overlooked steps in improving credit is understanding your own behavior with money and debt. Use credit card statements and bank statements to track spending habits. Did an emergency arise that caused you to max out a credit card? Maybe an unexpected car repair, loss of income, medical situation, or natural disaster forced you to use credit cards more than you would have liked. Perhaps impulsive spending led you to high credit card balances. However you ended up with credit card debt, it is wise to learn from it, so you could plan for the future. Having a savings account to handle life’s emergencies can protect your credit score and your wallet.

Credit card debt does not always signify a money issue. It’s often a behavioral issue. Changing behaviors and relationship with money will not just propel you to improve your credit score, it ensure that bad habits will not surface again once your credit goals have been met.

2. Clean up your credit report

According to the FTC, millions of people have errors on their credit reports that can result in a lower score. Carefully check your credit report to ensure all information is being reported accurately. Once a year, you can obtain a free copy of your credit report from all three credit bureaus. If you suspect fraud, inaccurate information, or need to update your personal information, you can contact the credit bureaus individually to find out their dispute process.

To find out where to obtain a free copy of your credit report, check out our blog post on how to get your credit report and credit score for free.

Professional credit repair companies can help you clean up your credit report. However, it’s important to choose the right one, since many credit repair companies are ineffective scams.

3. Understand how credit scores are calculated

Many people have lower credit scores because they do not understand how it is calculated. Depending on your situation, aiming to eliminate all credit card debt may not be possible in one year. Around 30% of your credit score stems from credit card balances. Aim to reduce the debt to income ratio by paying off 20% or more of credit card balances.

Another credit score buster is applying for too much credit in a short period. Apply for credit only if it is absolutely necessary. 10% of a credit score is calculated by the number of hard inquiries. Another 15% of a credit score is determined by the age of the accounts. Having too many new accounts or inquiries could put a significant dent in your score, so avoid opening new lines of credit if possible.

4. Change spending habits

Knowing how to allocate your income will be a beneficial asset during this process. Is there something you can sacrifice to get to your credit goals faster? Maybe skipping your daily latte for a short period or avoiding take out lunches will speed up the process of paying off a credit card or increasing your emergency fund. It is wise to be mindful of how money is spent. Small purchases here or there may seem fine, but they eventually add up quickly. Look for ways to be smarter about money and use the savings to improve your financial health.

5. Be responsible with the credit you already have

To successfully improve your credit score this year, you will have to take care of the credit you already have. Establishing a history of paying bills on time will be viewed favorably and will have positive impacts on your credit score. If paying bills on time has been a struggle in the previous year, commit to paying bills on time this year. It is vital that all payments are made on time, every time. A late or missed payment can stay on your credit report for up to seven years. A person with an excellent score could potentially lose around 90 points because of a missed or late payment.

If you think you will be late with paying your bill, do not wait until the last minute to contact the lender. Contact the creditors right away and set up alternative payment arrangements. Most creditors and banks have automated payment options available to make paying bills on time easier.

6. Adjust expectations and work hard

While “improving credit” and “getting out of debt” are some of the most cited New Year’s resolutions, they are often the ones people break the quickest. Like many resolutions, improving credit scores takes hard work, patience, and a change in behavior. These things normally do not happen overnight. Create a realistic budget and stick to it. This will keep track of bills and spending habits. Wallethub.com suggests breaking credit goals down into smaller goals to maximize your ability to follow through with your plan. For example, setting a deadline to order credit report, increase emergency funds, and create a budget could be mini-goals that pushes you closer to your ultimate goal.

Concluding Thoughts

Everyone could benefit from analyzing their credit reports and spending habits. Surprisingly, the most effective way to improve a credit score is to change your mind set about credit and money. By understanding your previous credit pitfalls, you can work hard at eliminating them. A healthy relationship with money, hard work, and perseverance will eventually translate to excellent credit. This year, resolve to investing in yourself by improving your credit score.

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10 Credit Utilization Tips To Skyrocket Your Credit Score

10 Credit Utilization Tips To Skyrocket Your Credit Score

Here’s the gist of it: how much available credit you’re using becomes one of the most important factors, second only to making timely payments. Meet the credit utilization ratio. Simply put, it’s the amount of credit you’re using in comparison to your credit limit. If you have a credit limit of a $5,000, and you have a balance of $2,500 on your card, your credit utilization ratio would be 50% (which would be way too high to be good for your credit score, according to most experts). In fact, most would agree that having a balance of over 30% can damage your credit. Lower your credit utilization ratio and kick your credit score out the park with these 10 steps.

1. Welcome to the Credit Score Bureau

Understand how the credit score system works. Essentially, each month, your balance is sent to the 3 major credit bureaus by your credit issuer. This data then pops up in your credit report. When the new credit card balance comes in, it replaces information from the previous month.

2. Say When

Understanding credit score bureaus takes us to the next step: find out when your card issuer actually reports to the credit bureau. The date they report this balance doesn’t always coincide with when your bill is due. If the reporting date is a few days before your billing cycle, and you haven’t paid down the balance yet, you might look like you’re carrying a large balance. You can avoid this problem by calling your issuer’s customer service. Find out when they send the report, and simply pay the balance before that date every month.

3. Pay Not Once, But Twice Per Month

The trick here is to halve the time between each payment so that your credit utilization ratio is always below 30%. Set up an automatic twice-monthly payment to your card to make it easier. This’ll be a good alternative to the option above if it’s too much of a hassle remembering when the credit issuer sends the report, or if you simply don’t like calling customer service.

4. Raise the Roof

Ask for a credit line increase on your card. This is a different route you can do in terms of avoiding using 30% of your available credit. This is a great option if you’re not able to pay down your debt—just raise the ceiling. At the same time, remember that you want to continue to keep the balance low. Don’t go on a spending craze. As a word of warning, know that doing this may make you lost a few points in your credit. As long as you’re dutifully everything to keep up a good credit score though, you should be able to bounce back.

5. Just Do It

Sometimes the simplest choice is the smartest choice. The easiest thing you can do to lower your credit utilization ratio is to completely pay off your balance every month. It’s a quick, no-brainer, fool-proof solution. If you have the means, this is your best option.

6. Retail Credit Cards: Thank You But No Thank You

You want to avoid opening up that new Macy’s card, because retail store credit cards usually have very low ratios. This is due to the fact that they generally have low credit limits, and having one may encourage you to go on a shopping spree. One large shopping experience could shoot your credit utilization ratio over that bar of 30%. So give a big smile and politely decline that bright red card. 

7. Spread It Around, Baby

Instead of blowing up your credit utilization ratio on one card, why not use several cards and keep it low on each? The key thing to remember here is that credit bureaus may assess your utilization ratio based on individual cards AND their collective totals. So be careful to keep your ratio at 30% or less on each card in addition to the total. Also, if you don’t already have multiple accounts you can do this with, make sure not to open up too many new accounts in a short time span.

8. Check Yourself Before You Wreck Yourself

Make it a habit to always check your balance on your credit cards. You can’t fix or monitor your credit utilization without knowing what it is first. Then, make your move to pay up as soon as you are inching towards 30%. If you can’t make the payment, switch it up by using a different card for your purchases.

9. Hello, Mr. Robot

Technology can sometimes be your friend. If you’re having a hard time remembering to check your accounts online, set up balance alerts so that you get them through text message or email. This way, it’s almost guaranteed that you’ll see that 30% limit creeping up. One thing to remember is that it’s a good idea to set the alert so that it warns you at 20%. That way, you’ll have more time to pay your balance off before you hit that 30%.

10. Stop, Drop, and Roll

Setting an imaginary limit is a great way to improve your credit score. Ignore your actual credit limit and develop a discipline of responsible spending. Having a $4,000 doesn’t mean that you should buy a $4,000 suit. Keep a 30% limit and stick to it. Budgeting is another great way to follow this step. 

A Summary of the 10 Steps

  • Understand the process of how your credit scores are reported
  • Know when the credit card issuers reports your balance and pay before that reporting date
  • Pay 2 times a month instead of once to consistently keep that credit utilization ratio low
  • Raise the credit limit while maintaining the same balance
  • Just pay off your total balance
  • Avoid retail store credit cards
  • Spread your balance among several cards instead of one
  • Make it a habit to always look at your balance
  • Set up email and text alerts to remind you of upcoming credit card bills
  • Ignore your actual credit limit and come up with a credit limit in your mind that’s much lower

Conclusion

As you can see, there are a whole host of options in keeping down your credit utilization ratio. Choose which method is convenient and effective for you in keeping that balance low, thereby skyrocketing your credit score. When seeking credit repair, remember that coming up with an effective strategy means figuring out how that strategy fits your lifestyle. The FICO scoring model and its rival VantageScore ranks credit utilization ratio accounts for one third of your credit score. In other words, it’s really, really important that you look at how much you pay off, but how much is owed—because that’s what the credit bureaus look at.