Sunday, October 5, 2014

It's Been Crazy Lately

     So, the past four months have been a blur. I have been pulled, stretched, cajoled, and every other thing you can imagine. You see, my mother-in-law decided that it was time for us to either buy the home we are renting from her or for us to pay more rent. Sheree and I decided that we were going to try to buy the house. It was what we have wanted to do for a long time. It was now time to see if all my credit repair efforts had paid off. 

    It started out simple enough. I applied, faxed over 50+ pages of documentation to my loan officer and he says, "You're preapproved!" We were so excited. My loan officer said that we just needed to get a signed contract from Sheree's mom and he would get the ball rolling. 

     Within a few days we found a good contract to present her and sent it out for her to review and sign. She responded back saying that she could not sell the house at this time. What? Are you serious? She had been pressuring us to buy the home from her for the past year. Now, with no reason as to why, she backs out? We were, to say the least, upset, hurt, and down right mad.

     Well, we had this preapproval letter from our loan officer so we decided to go searching for a home free from Sheree's mom. We searched for a couple of weeks and found a couple of houses that we liked, but were torn between the two. One was a log cabin style home and the other was a ranch style. I personally was ok with either of them. I just needed Sheree to decide and she was taking her time with it. What pushed her over the edge was her mom sending a pretty hurtful email to her. This gave her the incentive to want to get out of the house fast and be free from the controlling nature her mom has imposed on her.

     So we decided on a house and that weekend we met with our really estate agent and got the offer letter and contract signed. It was an exciting time for both Sheree and me. I figured that since I had faxed over so many documents already that we were most of the way there. I was very wrong. 

     At first we were going to get a FHA loan. We had debated on this or a VA loan and decided that we both wanted to be on the mortgage and since we aren't married yet, the VA option wouldn't work. So my loan officer drew up the documents and when we went to sign everything we decided that we didn't want to make a large down payment. 

     So, in mid stream, we changed course and decided to go with the VA loan. This would help my credit since I'll be the only one on the loan, but would not help Sheree's. We decided that we'll try to refinance in a couple of years under both of our names. 

     By switching to a VA loan, the whole complexion of the process changed. First, the income being used for the loan was reduced to only mine. This meant that I had to shed some of the obligations that I had or at least shift them from a joint account to only Sheree's name. Ultimately, Sheree had to refinance our van in her name only. I really didn't want to do this because the on time payments would only be reported to her credit report and not mine, but looking at the larger picture, our goal was home ownership. This was a small price to pay in order to achieve our goal.

     My credit wasn't 100% where it needed to be so I had some work to do. While my score was high enough, I had a couple of collection accounts on my credit report that needed to be resolved and, with the time frame being short, I needed to act fast. So after many calls back and forth, I was able to settle the accounts and get the documentation verifying as much to my loan officer.

     Finally, closing on the home came and went without a hitch and we were now officially home owners. What a crazy four months this has been. Hard work and dedication towards our goals have paid off. While there were ups and downs to the whole process, I would not trade what I have learned for the world. I gained valuable insight in to the home buying process and what is now required in order to obtain a home loan after the housing market crashed and the new laws were put in place.

Sunday, May 4, 2014

Crossing My Fingers

     So, on 4/21/14 I mailed out five letters to different creditors. One was to a collection agency trying to get them to validate the debts. The other four were to the original creditors. I used a letter getting them to investigate and send me a notarized letter stating their compliance with the FCBA or remove the negative entries off my credit report. These creditors are all accounts that have been paid off and closed for at least a year, but have some 30 and 60 days late payments on them.

     This is where the waiting game takes a toll. You see, Sheree and I want to buy the home I'm living in from my mother-in-law. The offer to sell the house to us has been on the table for about a year now and she is starting to question whether we really want to buy the house or not. Well, simply put, Mom, we do. My credit score is holding us back, though, and unless I find a way to increase my score quickly we won't be able to do it in the time frame that you want.

     I feel that I have done almost everything right when it comes to repairing my credit. I have disputed items and got them removed. I have been responsible with the credit cards I have (never late on any of them), I have rehabilitated my student loans. I would call the past year a great success in the credit repair world. But my score is still not quite there to get me over the hump and get us approved for that needed home loan.

     Right now I believe I am at least 60 days out from getting the items disputed above off my credit. The reason I say that is my defensive pessimism kicking in. Let's say I don't hear back from these creditors in 30 days. I check my credit report and the accounts still have the negative information on them. I must then re dispute the items with the credit bureaus sending them the letters and the return receipts as proof that the companies aren't following the law and wait another 30 days for a response. Best case scenario is that the credit bureaus remove the negative information like they are supposed to and my score finally rises above that minimum credit score plateau that is required to qualify for a mortgage.

     You never know. These creditors could do what they are supposed to and delete the information from my credit reports without any hassle what so ever. I am not banking on that to happen, though. I need to make sure I have a backup plan. And then a backup plan for the back up plan. Needless to say, my nerves won't stop until I see the desired results.

     So, I have my fingers crossed. Hoping and praying that everything goes smoothly and that there won't be too much back and forth involved with these creditors.

And the Saga Continues...

Friday, April 25, 2014

Are You a Defensive Pessimist?

     I have been thinking recently of what type of person I would characterize myself in terms of dealing with the credit repair process. I have this undeniable hope that everything will be fine. All of my negative entries will fall off eventually with the proper processes and I will end up with a great credit score. But then I start to think, "What if it doesn't work out like that? What if I need to do extra work to get there?" I then, almost immediately, start planning the next steps just in case things don't work out like I planned. So, what do I characterize myself? Is there even a name? I then read this article on the Debt Roundup Blog that I believe characterizes me to a tee. It's called, "The World Through the Eyes of a Defensive Pessimist". It's a great article that describes what a defensive pessimist is and how they interact with the world.

     Wikipedia has a great definition:

     I am this way 100%. When it come to credit repair, and many other things, I am constantly worried that I will get a negative response to the letters I have sent out and I am constantly asking the what if questions. In response to that fear I am in a never ending search for the next letter I will have to send out or action I will have to take in response to that negative response. I want to feel 100% secure that I have a plan for the next step if anything were to happen. 

     Now I don't want to say that I am that way with everything that I do. There are days that I just wing it and go with the flow. Those are days, though, that my brain needs a break and I am ready to relinquish control for awhile. And I get great pleasure watching my loved ones or my subordinates at work take charge like I normally would and make it a successful day. Most of the time I am that way, though. Especially with the most important things to me. I do not want to leave anything to chance. It just makes life so much easier to have a response for as many possible outcomes as I can think of. 

     I my mind, I believe that my credit repair process is so important to achieving the goals I have in life (both short and long term) that I am in a constant state of thought until I figure out what to do next.

     So, what is your thought process about your credit repair journey? Comment below and let us know.

And the Saga Continues...

Wednesday, April 23, 2014

The Credit Repair Waiting Game...

     I can't stand waiting. I guess that's one of my faults. I want instant gratification. I avoid ordering online and go to the store so I can get what I want right then and there. At work, I don't like waiting for results if I know the job can be accomplished right then and there. I am having the same issue with the disputes on my credit report that I have mailed out. I want to know as quickly as possible what the results of the investigation are so I can start the next phase of repairing my credit.

     I have downloaded the USPS app to my phone so I can track the certified letters that I have mailed to the creditors. The credit bureaus have a tracking system, so I will log on to track those disputes when I have them. I have this insatiable desire for information. I'm what you may call a planner. The problem with waiting is that I can't plan my next steps very accurately without knowing what the results of the investigation are. 

     You may say 30 days is a drop in the hat if your credit score will be repaired. I understand, and fully agree with that statement. I also understand the amount of customer interactions these companies deal with on a daily basis. That takes time as well. And then you take in to account the fact that I mailed disputes to four different creditors. Each company has it's own system of dealing with disputes. Each company will respond in their own time. 

     And then lets say the 30 day wait has passed and I don't get a response and my credit report wasn't adjusted. I then have to mail out a letter to the credit bureaus and wait another 30 days for a response. That can be so frustrating. 

     All this makes the road to good credit a long and winding process. It is teaching me two things in life (probably more than that). First, financial responsibility. I will never want to go through this again. I will definitely make sure that I stay on top of my finances from now on. Second, patience. I don't think I have ever needed so much patience in my life. But I have to have it. The only alternative is that I give up trying to fix my credit. And I can't do that. I have plans for the future like buying a house, marrying my fiance, sending my kids off to college, financial freedom, etc. I need a great credit score to achieve all of these things. 

     That's what gets me through this waiting game. I have so much to look forward to by fixing my credit. I also have more than just myself to worry about. I don't want my future wife and kids to struggle like I did growing up. I want them to thrive and grow up happy. I need patience to make that happen.

     I can't wait to get the results and let you all know what happened. 


Sunday, April 20, 2014

Dispute Letter to Creditors

     One item that is on my credit report that  is hampering my credit score is my Capital One Auto Finance Loan that has been paid off for about a year. Like I said in a previous post, my ex really did a number on our finances while we were together. This loan was one of them. While I have since paid it off, there are multiple instances of the loan being 30 or 60 days late. I found a letter that may help remove the negative entries on my credit report and help me boost my score.

     This letter should only be sent to creditors that you have paid off at least six month prior to sending it. It should also only be sent if the account has 60/90/150 days late status on it. 

     You see, creditors don't want to be bothered with you once you are done paying them off. It is your right per the Fair Credit Billing Act (FCBA) to request certain information from your creditors. Your have the right to have them verify that they billed you correctly, that they sent the bills to the correct address, and that they did not ignore and change of address requests. By sending this letter, they either have to dig up old information or delete the negative information off you credit report. Most creditors find it easier to just delete the negative entries off your credit report instead of using up valuable resources digging up all of that old information that they really don't care about. 

     Below is the letter:
Your Name
123 Your St
Anytown, US 12345

April 18, 2014

Credit Bureau Dispute
PO Box 259407
Plano, TX 75025-9407

RE: Account #: 123456789

I am writing regarding the late payments that your company has reported to Equifax, Experian, and Trans Union for my account.

The Fair Credit Billing Act requires that you bill correctly, that each statement be sent to the correct address, that you not ignore change of address requests, and that you facilitate disputed charges in a manner prescribed by law. The Act also stipulates that you provide lawfully requested information concerning my account upon request in a timely manner.

Per my rights under the FCBA, please mail a notarized statement on your letterhead which will attest to your compliance to the FCBA in general and to my account specifically throughout the period I have been a customer. Otherwise, please delete the negative marks you have reported to the Equifax, Experian, and Trans Union within a timely manner prescribed by law. Your prompt attention is greatly appreciated.

I have enclosed two documents which will verify my address: a photocopy of my (Your state) Driver’s License and a photocopy of my recent (Utility Bill) statement.


Your Name
     If you notice, you are not lying about anything by sending this letter. You are just requesting information that the creditor may or may not be willing to dig up and provide to you. If they don't want to provide it, they have to delete any negative entries on your credit report.

     I sent this letter to COAF on 04/18/2014. I will wait 30 days and will follow up if I haven't heard anything. I will also keep you informed of the progress.

     I would like to say real quick that I am not saying anything bad about COAF. I have several credit cards and a new auto loan through them. I think they are great. They were the first company to give me a chance once I started trying to rebuild my credit. They just happen to be the company that I am having this problem with.

Remember to send all correspondence via certified mail.

And the Saga continues....

Friday, April 18, 2014

Why Haven't You Started Fixing Your Credit???


     I wonder sometimes why more people aren't doing anything about their credit scores. Why do they go through life accepting the mediocre lifestyle? Are they really ok with living day to day? Or do they have enough cash to not worry about what's on their credit report? Maybe it's lack of knowledge of the credit reporting system that is holding them back. Your credit score is so important in today's world that you have to invest the time in to making sure it is accurate and as high as possible.
     There have been numerous studies that show the credit bureaus are far from perfect.  I have seen some say that as much as 75% of credit reports have some type of error. That is outrageous. I don't know of any other company that would allow that type of problem to exist with their product.
     Well, like it or not, it is our job to make sure that they are being 100% accurate with our information. We can't just sit idle and hope that that the credit bureaus grow a conscious one day and decide to do what's right. They would lose money by doing that.
     To make matters worse, we have to be just as viligent with our creditors as well. They would stand to lose even more money if our reports were accurate. You see, if our reports were accurate and we had a high credit score, there would be no reason for them to charge us a high interest rate on anything. They would lose millions of dollars.
     Sounds almost like a conspiracy doesn't it? We have to be on top of our credit repair so we don't get bamboozled by the credit bureaus and creditors. They don't really care about us. They may send out some advertising or some other corporate message that says they do, but behind the scenes they're laughing in our faces while raking in millions of dollars of our hard earned money. Money that many of us don't have to spare.
     So I pose the question again... Why aren't more of us doing something to fix our credit? It can be such a simple process if done correctly and could save us thousands of dollars.
     And the Saga continues.....

Sunday, April 13, 2014

When You Get a Letter From a Collection Agency

     Collection Agencies. The feared enemy. Or are they? I used to think that way. Now, after a few run ins with different collection agencies using the law as my weapon of choice, I have found some successful ways to stop them in their tracks.

     They may talk big. They may threaten you greatly. They may try to harass you. In the end, they are mostly all talk and very little action. Collection agencies may not even be able to collect debts in your state.

     The first thing you need to do if you receive a call from them is request verification of the debt. I personally wouldn't say another thing. They will try to goad you in to divulging information to support their case, but don't give in. Just politely request that they send you verification of the debt and that you will need time to review your records before you respond.

     If they mail you a letter, the clock is ticking. Once you receive the letter, you have 30 days to respond before they can put anything on your credit report. I cannot stress this enough... RESPOND IMMEDIATELY! If you procrastinate, you will probably get that entry n your credit report and will have to battle both the credit bureaus and the collection agency. I have procrastinated in the past and got hit with that entry on my credit report. It is not easy to have to get both the credit bureaus and the collection agency do your bidding. Plus all of the extra paperwork with having to deal with four companies instead of one. Remember, the goal here is to make the process as painless as possible.

     You should respond in writing and send the letter certified mail with a return receipt. This will ensure you have a paper trail if you need to take them to court later on. Below is a letter that I used that has worked very well.

Your Name
Address Line 1                       
City, State Zip

April 09, 2013
Allied Interstate LLC
P.O. Box 361567
Columbus, OH 43236-1563

Re: Account Number: 123456789

To Whom It May Concern:

I am sending this letter to you in response to a letter I received in the mail by your company. Be advised, this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.

This is not a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to above named Title and Section. I respectfully request that your office provide me with competent evidence that I have any legal obligation to pay you.

Please provide me with the following:

1.      What the money you say I owe is for.
2.      Explain and show me how you calculated what you say I owe.
3.      Provide me with copies of any papers that show I agreed to pay what you say I owe.
4.      Provide a verification or copy of any judgment if applicable.
5.      Identify the original creditor.
6.      Prove the Statute of Limitations has not expired on this account.
7.      Show me that you are licensed to collect in my state.
8.      Provide me with your license numbers and Registered Agent.

If your office has reported invalidated information to any of the three major credit bureaus (Equifax, Experian, and TransUnion), said action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company you represent I will not hesitate in bringing legal action against you for the following:

1.      Violation of the Fair Credit Reporting Act
2.      Violation of the Fair Debt Collection Practices Act
3.      Defamation of Character

If your offices are able to provide the proper documentation as requested, I will required at least 30 days to investigate this information and during such time all collection activity must cease and desist.
Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.

If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references of this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls or correspondence sent to any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter.

This is an attempt to correct your records, any information obtained shall be used for that purpose.


Your Name

     This letter basically stops the collection agency in its tracks. Most of the time they don't have the proper verification. They bank on you not knowing that. If it is the second or third agency to have that debt, you can almost guarantee they don't have any verification. That means they have to go back to the original creditor and get the original agreement. Nine times out of ten they won't even bother and if you sent the letter before they put it on your credit report then you've cleared that hurdle after the 30 day period they have to respond.

     I have actually used this letter for an item that is already on my credit report and I heard nothing from the company, but I noticed that the entry on my credit report disappeared. I beat them by sending only one letter that requires them to follow the law.

     These agencies, as you probably know, are unscrupulous and do not honor their word in any way unless you get what they say in writing and hold them to the law. Do not allow them to push you around. Stay calm and be patient, knowing that one slip up by them and you win.

And the Saga continues...

Sunday, April 6, 2014

Example Student Loan Letter

     As promised, below is a sample letter that I created to send to those companies that won't take your rehabilitated student loans off your credit report. I sent this off on Friday. Now... the waiting game.

ACS/College Loan Corp
501 Bleeker St
Utica, NY 13501

May 16, 2013


Dear Sir/Madame:

I am writing to dispute the account referenced above. I have disputed this account information as inaccurate with the credit bureaus Equifax, Experian, and Trans Union, and you have been able to verify this debt. How is this possible?  I have rehabilitated these loans and in doing so I was promised that any negative marks would be taken off my credit reports.

The Law, § 682.405 Loan rehabilitation agreement, states the following below:

(ii) The prior holder of the loan must, within 30 days of receiving the notification from the guaranty agency, request that any consumer reporting agency to which the default claim payment or other equivalent record was reported remove such record from the borrower's credit history.

I request that you send me the proper proof that what you are reporting is true, or if you cannot, please immediately remove it from my credit report.

In the event that you can not verify the item pursuant to the FCRA, and you continue to list the disputed item on my credit report I will find it necessary to sue you for improper reporting of information to the credit bureaus regarding my credit history, actual defamation damages and declaratory relief under the FCRA. According to this regulation, I may sue you in any qualified state or federal court, including small claims court in my area.  You have severely limited my ability to purchase a home and obtain good interest rate on credit cards.

In light of the recent changes to the FCRA (FACTA), consumers now have the right to go directly to the original creditor and ask for proof of negative information.  In addition, court case opinion No. 00-15946 CV-99-00290-D.C. by the US Court of Appeals 9th Circuit, Nelson Vs. Chase Manhattan, the court ruled that the creditor has the responsibility to investigate and make sure that correct information is being reported to the bureaus, and that the consumer has a right to sue under the FCRA, should his or her rights be violated.

While I prefer not to litigate, I will use the courts as needed to enforce my rights under the FCRA.

I look forward to an uneventful resolution of this matter. Your response is required within 30 days.


Your Name
123 Somewhere rd
Anytown, US 12345

Wednesday, April 2, 2014

Student Loan Rehabilitation Law

     I just found a smoking gun to get these student loans off my credit report. You know what it is? You probably guessed it, huh? It is........ THE LAW! More specifically 34 CFR 682.405 - LOAN REHABILITATION AGREEMENT.

     Below is the law. I copied it from the Cornell University Law School website.
§ 682.405 Loan rehabilitation agreement.
(a) General.
(1) A guaranty agency that has a basic program agreement must enter into a loan rehabilitation agreement with the Secretary. The guaranty agency must establish a loan rehabilitation program for all borrowers with an enforceable promissory note for the purpose of rehabilitating defaulted loans, except for loans for which a judgment has been obtained, loans on which a default claim was filed under § 682.412, and loans on which the borrower has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance, so that the loan may be purchased, if practicable, by an eligible lender and removed from default status.
(2) A loan is considered to be rehabilitated only after—
(i) The borrower has made and the guaranty agency has received nine of the ten payments required under a monthly repayment agreement.
(A) Each of which payments is—
(1) Made voluntarily;
(2) In the full amount required; and
(3) Received within 20 days of the due date for the payment, and
(B) All nine payments are received within a 10-month period that begins with the month in which the first required due date falls and ends with the ninth consecutive calendar month following that month, and
(ii) The loan has been sold to an eligible lender.
(3) After the loan has been rehabilitated, the borrower regains all benefits of the program, including any remaining deferment eligibility under section 428(b)(1)(M) of the Act, from the date of the rehabilitation. Effective for any loan that is rehabilitated on or after August 14, 2008, the borrower cannot rehabilitate the loan again if the loan returns to default status following the rehabilitation.
(b) Terms of agreement. In the loan rehabilitation agreement, the guaranty agency agrees to ensure that its loan rehabilitation program meets the following requirements at all times:
(1) A borrower may request rehabilitation of the borrower's defaulted loan held by the guaranty agency. In order to be eligible for rehabilitation of the loan, the borrower must voluntarily make at least nine of the ten payments required under a monthly repayment agreement.
(i) Each of which payment is—
(A) Made voluntarily,
(B) In the full amount required, and
(C) Received within 20 days of the due date for the payment, and
(ii) All nine payments are received within a ten-month period that begins with the month in which the first required due date falls and ends with the ninth consecutive calendar month following that month.
(iii) For the purposes of this section, the determination of reasonable and affordable by the guaranty agency or its agents must—
(A) Include a consideration of the borrower's and spouse's disposable income and reasonable and necessary expenses including, but not limited to, housing, utilities, food, medical costs, work-related expenses, dependent care costs and other Title IV repayment;
(B) Not be a required minimum payment amount, e.g. $50, if the agency determines that a smaller amount is reasonable and affordable based on the borrower's total financial circumstances. The agency must include documentation in the borrower's file of the basis for the determination if the monthly reasonable and affordable payment established under this section is less than $50 or the monthly accrued interest on the loan, whichever is greater. However, $50 may not be the minimum payment for a borrower if the agency determines that a smaller amount is reasonable and affordable; and
(C) Be based on the documentation provided by the borrower or other sources including, but not be limited to—
(1) Evidence of current income (e.g., proof of welfare benefits, Social Security benefits, child support, veterans' benefits, Supplemental Security Income, Workmen's Compensation, two most recent pay stubs, most recent copy of U.S. income tax return, State Department of Labor reports);
(2) Evidence of current expenses (e.g., a copy of the borrower's monthly household budget, on a form provided by the guaranty agency); and
(3) A statement of the unpaid balance on all FFEL loans held by other holders.
(iv) The agency must include any payment made under § 682.401(b)(4) in determining whether the nine out of ten payments required under paragraph (b)(1) of this section have been made.
(v) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances only upon providing the documentation specified in paragraph (b)(1)(iii)(C) of this section.
(vi) A guaranty agency must provide the borrower with a written statement confirming the borrower's reasonable and affordable payment amount, as determined by the agency, and explaining any other terms and conditions applicable to the required series of payments that must be made before a borrower's account can be considered for repurchase by an eligible lender. The statement must inform borrowers of the effects of having their loans rehabilitated (e.g., credit clearing, possibility of increased monthly payments). The statement must inform the borrower of the amount of the collection costs to be added to the unpaid principal at the time of the sale. The collection costs may not exceed 18.5 percent of the unpaid principal and accrued interest at the time of the sale.
(vii) A guaranty agency must provide the borrower with an opportunity to object to terms of the rehabilitation of the borrower's defaulted loan.
(2) For the purposes of this section, payment in the full amount required means payment of an amount that is reasonable and affordable, based on the borrower's total financial circumstances, as agreed to by the borrower and the agency. Voluntary payments are those made directly by the borrower and do not include payments obtained by Federal offset, garnishment, income or asset execution, or after a judgment has been entered on a loan. A guaranty agency must attempt to secure a lender to purchase the loan at the end of the 9- or 10-month payment period as applicable.
(3) Upon the sale of a rehabilitated loan to an eligible lender—
(i) The guaranty agency must, within 45 days of the sale—
(A) Provide notice to the prior holder of such sale, and
(B) Request that any consumer reporting agency to which the default was reported remove the record of default from the borrower's credit history.
(ii) The prior holder of the loan must, within 30 days of receiving the notification from the guaranty agency, request that any consumer reporting agency to which the default claim payment or other equivalent record was reported remove such record from the borrower's credit history.
(4) An eligible lender purchasing a rehabilitated loan must establish a repayment schedule that meets the same requirements that are applicable to other FFEL Program loans of the same loan type as the rehabilitated loan and must permit the borrower to choose any statutorily available repayment plan for that loan type. The lender must treat the first payment made under the nine payments as the first payment under the applicable maximum repayment term, as defined under § 682.209(a) or (h). For Consolidation loans, the maximum repayment term is based on the balance outstanding at the time of loan rehabilitation.
(c) A guaranty agency must make available financial and economic education materials, including debt management information, to any borrower who has rehabilitated a defaulted loan in accordance with paragraph (a)(2) of this section.
     I highlighted the part that will help me and all of you out there with this problem get this erroneous information off our credit reports. I really wish I had found this sooner. I guess a little bit of focus on a single problem instead of trying to fix all of the problems at once actually helps. 

     The problem I have, though, is that I was reading some feeds last night about people having the same issues that I am with these student loans. Some of the responses given to these people were crazy. One response said something to the affect that the reason one lady's negative student loans weren't taken off after rehabilitation was because the Department of Education was involved. He was insinuating that we can't do anything about it if the government does not want to do anything. That's just plain ridiculous. So, the law doesn't mean anything?

     Well, I'm an optimist. I believe that if there is a will, there is a way. I am drafting a letter tonight and will be mailing it out tomorrow. I will post a copy of the letter I sent on my next post. 

     There is one  more thing I feel I need to tell you that I also found out last night. I called the company on my credit report and asked why they had not updated my information with the correct status. The lady said that they have to get a notice from the loan guarantor in order to update my credit report. You see, the companies that show up on your credit report are your loan servicers. They take the payments for the government and report the data to the credit bureaus for them. You need to be talking to your loan guarantor. This company guarantees the loan to the servicer if you default. They are also the company you will be dealing with and making payments to during the rehabilitation of your loan. So you see it can be very easy to get confused and not know who to talk to. 

     Let me know if you have any more insights.

     And the Saga continues... 

Monday, March 31, 2014

Is Credit Repair Software Worth The Money?

Credit Umbrella's TurboScore Software

     In an effort to make my credit repair journey more effective I have started to look at other options in order to more organize my efforts.

     There are several ways to go about credit repair. You can go the old tried and true route and send out handwritten or typed letters and keep your own tracking and filing system of the interactions with the credit bureaus, collection agencies, and creditors. You can hire a credit repair agency to handle everything for you. You can buy and use a credit repair software to help you generate the letters needed and keep track of your progress. Or you can use any variation of the options above. Today I want to talk about the credit repair software.

     After reviewing a couple of companies' software, I decided to go with Turboscore. From my research, the software seemed to be the most complete version with the lowest cost. At $39.95 it provides a lot of guidance that is very helpful. Especially for beginners. There are a multitude of letters to choose from for almost every situation. You can track up to three users, so if you want to include your wife or friend in the credit repair process, you can help them with ease. There are multiple training videos to help you use the software and to help you choose the correct path to take in the credit repair process. There is even a Credit Dispute Dashboard to help you keep track of your overall progress. 

     The only negative that I found, and I have found this in every credit repair software, is that it does not mention anything about student loans. That is currently what is haunting me on my credit report and guidance in that area is non-existent. For instance, in my previous post I mentioned that I rehabilitated my student loans and that I was promised to have the negative items removed once the rehabilitation was complete. Well, that hasn't happened and I would love to have at least a sample letter in the software to guide me in getting this error fixed. My credit score would skyrocket and I would most definitely give credit to TurboScore for helping me with these errors on my report. 

     I just got the software yesterday and I have set up my user information and have put in my updated credit scores to create a starting point. I will start sending out letters shortly and we will see how it works out.


Wednesday, March 26, 2014

Debt to Credit Ratio: Student Loan Issues AGAIN

     In my previous post, "Credit Card Usage", I touched on the percentage of your credit card debt to your actual credit card limits and  how it could affect your credit score. I showed a chart from Credit Karma on how you are graded by how much of a balance you carry on your credit cards. What I wasn't thinking about was the percentage of debt to credit on my installment loans.

     Below is a snapshot of my credit report from Equifax as it stands today.

Latest Credit Summary

Your Credit Summary highlights the information in your credit file that is most important in determining your credit standing by distilling key credit information into one easy-to-read summary.


Open AccountsTotal#BalanceAvailable Available credit does not include accounts without a credit limit, such as mortgage or installment accountsCredit Limit Credit Limit includes the high balance for accounts without a credit limit, such as mortgage or installment accountDebt to CreditMonthly Payment Amount Monthly Payment Amount includes the amount owed per month on all accounts due on a monthly basisAccounts with a Balance

     As you can see, my revolving credit ratio is 44%. This equates to a C grade when you refer to Credit Karma's website. But my installment loans ratio is at 107%. These loans include the loan for our van and my student loans. This puts my total debt to credit ratio at 101%.

Next is the snapshot of Sheree's from today.

Latest Credit Summary

Your Credit Summary highlights the information in your credit file that is most important in determining your credit standing by distilling key credit information into one easy-to-read summary.


Open AccountsTotal#BalanceAvailable Available credit does not include accounts without a credit limit, such as mortgage or installment accountsCredit Limit Credit Limit includes the high balance for accounts without a credit limit, such as mortgage or installment accountDebt to CreditMonthly Payment Amount Monthly Payment Amount includes the amount owed per month on all accounts due on a monthly basisAccounts with a Balance

     Her revolving credit ratio is 31%. This equates to a B grade on Credit Karma. Her installment loan ratio is at 88%. This only includes our van loan. This puts her total debt to credit ratio at 62%.

     My credit score is lower than hers. So much so that I have been looking at every nook and cranny of our reports to try and find what the major differences are.

     The debt to credit ratio is one major thing that I have noticed that is really holding me back. Specifically the student loans in my installment loans section. I am on what's called the income based repayment (IBR) plan with my student loans. They take your adjusted gross income from the previous years tax return and your family size to determine how much you have to pay towards your student loans. You have to re verify this every year. After 25 years (10 years if you work full time in a public service organization) the balance on your loans will be forgiven. For the past 1 1/2 years I have not had to pay anything towards these loans. This has been a blessing, but now I may have found the curse.

     While I do not have to pay anything towards these loans, the interest accrued on these loans is being added and submitted to the credit bureaus. This is causing my debt to credit to look inflated in the installment loans section which I believe is causing my credit score to be lower.

     So now I am in a catch 22 again with the government. Do I continue on with the IBR plan and continue to have my credit report have this inflated debt to credit ratio or do I start making payments on these loans, even though I'm not required to, with the hopes of lowering this ratio and increasing my score? I know that over time paying down my van loan and credit cards will lower that ratio, but the interest in the student loans will continue to be added. Over a 25 year period this could really add up and inflate that ratio to astronomical proportions.

     I believe what I should probably focus on doing is paying down the interest part of these loans and continue to at least pay the interest on them every year. The interest is tax deductible and it will help my credit score by lowering the debt to credit ratio.

Any thoughts on this?

And the Saga continues...