Pertaining to your questions on COLLECTIONS:
Q: Should I pay those collections on my report?
Before any type of payment is made, our credit coaches will first request validation and/or verification from the creditors. It is your right to question the accuracy of the information being presented.
There are countless stories reported of abusive, deceptive, and unfair debt collection practices by many debt collectors. Under the Fair Debt Collection Practices Act, we will request validation of the debt including but not limited to:
(1) the amount of the debt
(2) the name of the creditor to whom the debt is owed
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof is disputed, the debt collector will obtain verification of
the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector
(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor
Q: Is it better to pay off a collection? Would this increase my score?
If you have an opportunity of paying the collection for a “Paid for Deletion” letter, then it would be better to pay off the collection. A paid for deletion letter is an agreement to remove an outstanding debt listing from your credit report. Without this letter, paying a collection could drop your score significantly as it’s re-aging information to show as negative activity happening today. Attached you will find an example of a “paid for deletion” letter. I have also made a note in your file to review the specific responses from the collection agencies before your monthly update. There might be some clear violations that will allow you to encourage the collection agency to prepare the letter for you.
Q: Is the collection agencies harassing you?
You have every right to inform a collection agency that you do not want to get called at this number. If they continue to call, make sure to keep a detailed logs of the call and the fact that they were informed not to call. Once you inform the collection agency that you do not want to be called, you are protected under the Telephone Communication Protection Act. If they continue to call and harass, we will provide you with an attorney that would be happy to take next steps against the collection agency. Remember, not to give out your social security number.
Pertaining to you question: How is my credit score calculated?
A score is calculated from five characteristics.
35% is Payment History. This means that any lates, collections, charge offs, bankruptcies, judgments, liens will hurt your score the most initially. The older the information, the less it is contributing to your scores.
30% is Utilization. Utilization is based on: Balance/ divided by credit limit = utilization percentage. Anything over 50% is looked upon as a “credit risk” for lenders. Within our program, we help our clients reduce their utilization without feeling the pressure of paying everything down.
15% is Credit History. The longer you maintain open accounts with creditors the better.
10% is Inquires. Don’t apply for credit unless you know you can get it or that you need to get it. Unnecessary credit inquires are going to hurt your score, especially if your overall credit file is small to begin with. To pull your credit score without an inquiry on your report, ask our advisers about our credit monitoring service w/ credit scores.
10% is the Mix of types of credit used. It is beneficial to have different types of credit on your credit report – revolving, installment, mortgage.
Pertaining to your question:I signed up for Personal Credit Coach and I cannot get a score?
There are generally 3 reasons why you might not be able to generate a score:
You do not have any positive activity on your credit report. One way to add a new positive line of credit is by opening up a secured credit card. For more information on how to start rebuilding your credit, click on the link provided below.
You have not had a trade line open for more than 6 months. You can become an authorized user on an account however, some banks do not report the history of an account prior to you becoming an authorized user.
You may have a fraud alert on credit your credit report. Please call the credit bureaus and have this alert lifted from your credit file. You can also speak to your credit coach and they can assist you with any questions you may have.
Pertaining to your question: When should I start to see results?
Some of our clients start to see results within days depending on each situation. However, our average clients start see results in the third and fourth month of starting the program.