QUESTIONS & ANSWERS

FREEBIES OF THE MONTH!!

 

Q:  Will my Bad Credit history follow me forever?

 

A:  NO!  Your FICO credit score will improve as you practice good debt management habits. Remember that you credit score is a snapshot of your financial well-being at a particular point in time.  This means that it changes.  Your score may be 500 today and change to 700 in a few years – it all depends on how motivated and disciplined you are.  To improve your score, Fair Issacs Corporation advices consumers to do the following:

 

  • Pay ALL your bills on time no matter how small or big.  Avoid delinquencies on your credit file.   Do not let your bills go unpaid for 30, 60, 90, 120 days.   Payment history accounts for 35% of your credit score so focusing on this aspect alone, can greatly improve your score.
  • Limit the amount you owe on your accounts.  Do not max out all your credit accounts.  This implies that you are a risk factor.
  • Avoid opening too many accounts.  Opening a new account will not significantly impact your score in a negative way but keep the number of accounts you own low.  If you own a credit card that you have had for a while, keep it since “length of credit” is a positive factor in your credit score.  

 

Q:  Collection Agencies are constantly harassing me, is there something I can do?

 

A: YES!  The Federal Debt Collection Practices Act (FDCPA) has very specific rules on what a third party collection agency can do and cannot do with respects to contacting you.  Here are a few of the things that they cannot do.

 

  • Call you before 8 a.m. or after 9 p.m.
  • Threaten you with statements such as “we will sue you”, “you will be arrested” or “your wages will be garnished” unless it is legal in your circumstance.
  • Use foul or obscene language.
  • Falsely imply that they are an attorney or government official.
  • “Spread your business” by contacting family, friends, employers and revealing your financial circumstance.
  • Contact you directly, if you are being represented by an attorney
  • Publish a list of people who owe money.

 Take your power back by writing a letter to the Collection Agency demanding that they cease communications with you unless otherwise specified by FDCPA.  If the harrassment persists you may want to seek the assistance of a professional company, who can negotiate with them or stop the harrassment. Refer to the list of credit counseling service professionals.

 

 

 

Q:  I think I am a victim of Identity Theft, what can I do?

 

A: Contact one of the three National Consumer Reporting Agencies (Equifax, TransUnion or Experian) to initiate a “fraud alert”.  Once the fraud alert has been initiated, the Reporting Agency that you contacted will relay the information to the other two agencies.  A fraud alert makes creditors and others aware of the fact that you believe you are the victim of identify theft. The alert is a powerful tool because it deters scam artists from further initiating instances of fraud against your credit.

 

Equifax: 1-800-525-6285

Experian: 1-888-EXPERIAN (397-3742)

TransUnion: 1-800-680-7289

 

There are two types of fraud alerts that can be placed against your credit file, namely:  Initial Fraud Alert and Extended Fraud Alert.  An Initial Fraud Alert stays on your file for 90 days while an Extended alert stays on your file for seven years.  To file an Extended Alert, you must complete an identify theft report.  The  identity theft report must include reports that you have filed with federal, state or local law enforcement agencies.

 

You are entitled to one free credit file, if you filed for an Initial Fraud Alert and two free files if you requested an Extended Alert. 

 

You have the right to:

  • Ask a debt collector to furnish you with information regarding debts that you believe were incurred as a result of identity theft.
  • Ask the Consumer Reporting Agencies to block off information on your credit report that you believe are a result of identify theft.  You must show that you have an identity theft report and identify the information to be blocked.
  • Ask businesses not to send identify theft related credit accounts information to Consumer Reporting Agencies.  

 

Q:  What is the statute of limitations on old debt?

 

A:  It depends on your state of residence.   The Federal Trade Commission (FTC) refers to old debts that are beyond the point at which a creditor or debt collector can sue you to collect as “Time-barred” debts.  The “window” during which a collector cannot sue you is also referred to as the “statute of limitation” period and is usually between 3 to 10 years after the day of the debt or the last activity date on the account.   To determine the last activity date look at  your credit report. 

 

Below is a chart of the statute of limitations by state.  Contact your State Attorney’s General Office for more specific information at www.naag.org.

 

State

Oral Contracts

Written Contracts

Promissory Notes

Open-ended Accounts

AL

6

6

6

3

AR

5

5

5

3

AK

6

6

3

3

AZ

3

6

6

3

CA

2

4

4

4

CO

6

6

6

3

CT

3

6

6

6

DE

3

3

3

4

DC

3

3

3

3

FL

4

5

5

4

GA

4

6

6

4

HI

6

6

6

6

IA

5

10

5

5

ID

4

5

5

4

IL

5

10

10

5

IN

6

10

10

6

KS

3

5

5

3

KY

5

15

15

5

LA

10

10

10

3

ME

6

6

6

6

MD

3

3

6

3

MA

6

6

6

6

MI

6

6

6

6

MN

6

6

6

6

MS

3

3

3

3

MO

5

10

10

5

MT

3

8

8

5

NC

3

3

5

4

ND

6

6

6

6

NE

4

5

5

4

NH

3

3

6

3

NJ

6

6

6

6

NM

4

6

6

4

NV

4

6

3

4

NY

6

6

6

6

OH

6

15

15

6

OK

3

5

5

3

OR

6

6

6

6

PA

4

6

4

6

RI

10

10

6

4

SC

3

3

3

3

SD

6

6

6

6

TN

6

4

6

6

TX

4

4

4

4

UT

4

6

6

4

VA

3

6

6

3

VT

6

6

5

4

WA

3

6

6

3

WI

6

6

10

6

WV

5

15

6

4

WY

8

10

10

8

 

 

 

 

 

Q: How long will negative information stay on my credit file?

 

A: Accurate negative information, such as Chapter 7 or Chapter 13 can legally be on your credit file for 10 years - however the three major National Consumer Reporting Agenices usually remove them after 7 years.   “No time limit” exceptions are: criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance.

 

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