Credit Repair Do-it-Yourself without Bankruptcy

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21. What Goes Into Your Credit Score

  • Identifying information (your name, address, and social security number)
  • Details concerning your current employment (your position, length of employment, and income)
  • Specifics about your personal history (birth date, dependents, previous addresses and employment)
  • Information about your credit history (how promptly you have paid your debts, how much and how often you've borrowed)
  • All the consumer credit that has been extended to you over the past 7 years, including the names of the creditors, dates the accounts were opened, payment patterns over time, and names of joint owners or cosigners
  • The highest and lowest balances from each of your creditors
  • The number of payments made on time to each creditor
  • The number of late payments and how late they were
  • Names of companies or individuals who have requested a copy of your report within the last 2 years
  • Information from public records (bankruptcy, overdue child support, civil suits, and tax liens)

22. Pre-Approved Credit Offer Opt-Out

You have a right to notify the credit reporting agencies not to use your credit file in connection with any transaction that you do not initiate, specifically those "pre-approved" credit offers. To exercise this right, notify the three agencies by calling +1.888.567.8688 (+1.888.5.OPTOUT). If you prefer, you may notify them in writing:

Trans Union
Marketing Opt-Out
PO Box 97328
Jackson, MS 39288

Experian
PO Box 919
Allen, TX 75013

Equifax Credit Information Services
Equifax Options
PO Box 740123
Atlanta, GA 30374

23. Identity Theft Prevention

Every day you share personal information about yourself by writing a check at the grocery store, charging clothing in a department store, purchasing a book online or filling out a form at the doctor's office. Each transaction requires you to share some personal information: your driver's license number, credit card number or Social Security number. Although businesses and law enforcement are taking some key initiatives to combat identity theft, like it or not, the fact is that it is up to you to take reasonable steps to help protect your personal information.

Identity theft is one of the fastest-growing crimes in the nation. Identity thieves capture information about you and use it to commit fraud, steal your money, fraudulently charge items to your accounts or even create new accounts.

Examples of Identity Theft

Skilled identity thieves use both low-tech and high-tech methods to steal confidential information from individuals and businesses. Here are some examples of identity theft:

  • Purse snatching. A thief steals your wallet or purse containing your ID and credit and bankcards.
  • Mail theft. Thieves steal bank and credit card statements, pre-approved credit offers, telephone calling cards and tax information from your mailbox.
  • Change of address. Thieves divert your mail to another location.
  • Dumpster diving. Thieves rummage through residential or business trash, looking for personal information.
  • Masquerading. Thieves fraudulently pose as your employer, landlord or someone else with a legitimate need for your personal information.
  • Stealing work records. Thieves get your business or personnel records at work.
  • Home theft. Thieves find personal information in your home.
  • Internet theft. Thieves obtain personal information from unsecured Web sites that you may have visited.
  • Insider crime. People who have access to personal identifying information steal it to use themselves or to sell to other thieves.
  • Pretexting. Thieves pretend to be you or a legitimate requestor and persuade business employees to provide them with your personal information.
  • Corporate espionage. Thieves steal business secrets such as new product plans or bidding strategy.

What thieves do with your personal information:

  • Contact your creditors, gain access to your accounts, change mailing addresses and begin using the accounts.
  • Open new credit or bank accounts, obtain loans and establish phone and utility service fraudulently using your name, Social Security number and birth date.
  • File bankruptcy under your name to avoid paying debts they falsely incurred or to avoid eviction.
  • Counterfeit checks or debit cards and drain your bank account.
  • File fraudulent tax returns.
  • Obtain driver's licenses and other fake identification documents.
  • Use insurance information to obtain medical procedures.
  • Buy cars or houses taking out loans in your name.
  • Sell business information to competitors.

Prevention Tips

Unfortunately it is impossible to entirely prevent becoming a victim of identity theft. But you can take a number of steps to protect your information. Managing your personal information wisely and carefully is the best deterrent to identity theft.

DON'Ts

  • Don't carry information such as your Social Security number, bank and credit card numbers, PIN numbers or passwords in your wallet or purse.
  • Don't give out personal information on the phone, through the mail or over the Internet unless you initiated the call or know the caller.
  • Don't put your Social Security number on your checks.

DO's

  • Before you reveal any personal information, find out how it will be used and whether it will be shared with others. Ask if you have a choice regarding submitting certain information. Can you choose to have it kept confidential?
  • Give your Social Security number only when absolutely necessary. Ask to use other types of identifiers when possible.
  • Make sure your driver's license number is not your Social Security number.
  • Put passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security number, your phone number or a series of consecutive numbers.
  • Deposit outgoing mail in post office collection boxes or at your local post office. Promptly remove mail from your mailbox after it has been delivered. If you are planning to be away from home and cannot pick up your mail, call the U.S. Postal Service at 1-800-275-8777 to request a vacation hold. The Postal Service will hold your mail at your local post office until you can pick it up.
  • Pay attention to your billing cycles. Follow up with creditors if your bills do not arrive on time. A missing credit card bill could mean an identity thief has taken over your credit card account and changed your billing address to cover his or her tracks.
  • Review carefully all bills and statements that come to your home. If you notice odd charges, contact your creditors immediately.
  • Keep items with personal information in a safe place. Take steps to thwart "dumpster divers" - thieves who steal from trash or recycling bins. Tear or shred your charge receipts, copies of credit applications, insurance forms, physician statements, telephone and other utility bills, bank checks and statements you are discarding, expired charge cards and credit offers that you get in the mail.
  • Be cautious about where you leave personal information in your home. Take special care if you employ help from outside the home, have roommates or are having service work done in your home.
  • Find out who has access to your personal information at work. Verify that the records are kept in a secure location.
  • Order a copy of your credit record. Obtain a copy from each of the three major credit reporting agencies every year. Make sure it is accurate, current and includes only those activities you have authorized or are aware of.
  • Consider subscribing to an online credit monitoring service that will alert you within 24 hours of any changes to your credit file.
  • Remove your name, phone number and home address from marketing lists by contacting the Direct Marketing Association. This will not prevent your name from being placed on all marketing lists, but it removes your information from many of them.
    DMA Mail Preference Service
    P.O. Box 9008
    Farmingdale, NY 11735-9008
    www.the-dma.org    		  DMA Telephone Preference Service
      P.O. Box 9014
      Farmingdale, NY 11735-9014
      www.the-dma.org
  • Stop pre-approved credit offers from coming to your home by calling 1-888-5OPTOUT. This will not prevent all these offers from coming to your home, but it prevents many of them.

24. Monitor Your Credit Report Regularly

If you have studied this document carefully, you know know that, much like a resume summarizes your work experience for a prospective employer, a credit report summarizes your credit history for prospective creditors (and in some cases employers and insurers). And like a resume, your credit report can influence whether you will receive what you are applying for.

Ideally, your credit report is an accurate, up-to-date reflection of your credit history. However, in this less-than-ideal world, there are many reasons why your credit report could contain inaccuracies that might prevent you from receiving the credit you deserve. Here, you have learned how to take action to keep your report accurate. Here are some important reasons why you should make a practice of regularly reviewing your credit report:

  1. Inaccuracies & Mixed Credit Files

    Many inaccuracies on a credit report can be the result of simple human error, and are therefore are not difficult to dispute. Whether the inaccuracies relate to payments not credited, late payments, or data mixed in from the credit file of someone else with a name similar to yours, you will want to contact the credit bureau to dispute inaccurate information promptly.

  2. Tracking Payments

    One of the most important elements of credit is a demonstrated history of on time payments. Once you send the check though, anything can happen--a delay in the payment being received can kick you over to a 30-day delinquency. If you call your creditor and explain the situation, they might adjust the information.

  3. Identity Theft

    Identity theft is an insidious crime, involving a thief who assumes your name to open new accounts, divert your card statements to another address, and run up all sorts of bad debt without you ever knowing about it until collectors come calling. Over time, identity theft could jeopardize your ability to obtain further credit. The best way to catch a thief who is using your name is by getting a copy of your credit report, which will show you if there are accounts listed you know you haven't opened. For example, if a thief has intercepted a pre-approved credit card offer in your name and sent it in with a change of address, your credit report will include the account.

  4. Inquiries

    If you're shopping around for a loan or more credit, you should know that when creditors check your credit, it places an inquiry on your credit report. Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can actually make getting credit more difficult. Moreover, if you didn't authorize someone to look at your credit report and they did, they may have broken the law.

  5. Credit Fraud--Unauthorized Charges

    Credit fraud involves the theft of your credit card or account number to make unauthorized charges to your account. Though consumers are protected financially from this abuse, other creditors may take note of all this activity and decide to raise your interest rates or refuse to grant you a loan. Reviewing your credit report will help you catch new activity on accounts that you haven't been using, or may have closed.

For these and other reasons, you should check your credit report regularly, or you might never know about any problems until it is too late. When it comes to managing your credit worthiness, your credit report is your best resource.

25. Stop Abusive Debt Collectors

Here is some information you might find helpful in dealing with collection situations, by using the Fair Debt Collection Practices Act (FDCPA).

Collection agents and some collection attorneys must comply with the Fair Debt Collection Practices Act, 15 USC §§ 1692 et seq. (FDCPA). The FDCPA regulates the language that collection agents can use in collection letters. If you receive a collection letter, it is a good idea to check out the letter with an attorney who practices in this area of law.

Some of the letters sent by collection agents contain false or misleading information. Others attempt to confuse you as to your rights. If any collection letter you have received violates the law, you may be entitled to sue the collection agency for damages of up to $1,000, plus get back all of your attorneys fees.

Because this law allows attorneys to collect their legal fees from the violating collection agency, some attorneys will not charge you to take on a case. There are some law firms that practice in this area of law quite a bit, as well as Truth in Lending cases, Consumer Leasing Act cases, and other consumer law matters. You may try to locate some by using a lawyer referral service, or your state bar, if you have received any collection letters.

The FDCPA regulates collection actions in acquisition of location information, communication in connection with debt collection, harassment or abuse, false or misleading representations, unfair practices, validation of debts, multiple debts, legal actions by debt collectors, and furnishing certain deceptive forms.

For a good summary of these FDCPA violations, read this short report, 16 Illegal Creditor Actions.

If you find yourself the target of a debt collection action, make sure that the debt collector is staying within the law, or they may face civil liability. Recently, for example, collection agency Perimeter Credit settled charges of violating the Fair Debt Collection Practices Act (FDCPA) for a $300,000 civil penalty.

It requires only minor effort to stop a debt collector from harassing. Included in this kit, you will find a letter, Sample Letter 6, to use whenever you are contacted by a collection agency. Use the letter to dispute the debt, or any part of the debt, you are not sure you owe. It is the collection agency's job to make sure they are collecting only the right amount. You should also send copies of this letter to the company for whom the collector is trying to collect. It is very important that you follow the mailing and record keeping instructions provided. If the collection agency violates the law, you will need the necessary documentation to prove it and make them pay. Even if you owe the money, you can still send a letter to tell the collector to stop calling or writing you.

Once the collector has your letter, they should suspend collections and not contact you for 30 days, during which time they should investigate the validity of the debt. Most collectors will not bother to investigate at all. If that collector contacts you after you have disputed a debt without having validated the debt, they most likely have violated the law. Contact your lawyer immediately, the collector could owe you $1,000.

Remember that nothing is foolproof, and you should be prepared to deal with the situations as they come up. Be creative, be flexible, and be persistent. You will be successful.

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Iron Mill News Service Credit News

Note: Send all debt settlement letters via "Certified Mail return receipt requested" and keep a copy for your records and send one copy to the original creditor.