Credit Repair 101

Little Known Facts:

• Unless there is a problem with one spouse refusing to pay or an account was opened based strictly on one spouse's income, a creditor cannot request a new application on a jointly held credit card or credit account simply because of a divorce or separation.

• On the average, Americans spend approximately 75% of their income each month repaying loans, debts and credit cards.

• It normally takes four to eight weeks to be issued either a secured or unsecured credit card after filing the application.

• Up to 80% of all bankruptcies in this country are recorded with inaccurate facts at the courthouse.

• If credit cards are lost or stolen, the owner's liability is limited to $50 per card. 

• If you have an error in billing on a credit card report, do not write about it on a bill. Chances are it will not be noticed. Send a separate, preferably certified letter to the issuing institution.

• Forms to file your own bankruptcy can be purchased at any large stationary store and some bookstores.

• If you use a post-dated check to pay a creditor or collection agency, be certain to write the term "post-dated check" in large letters on the check. Otherwise it may clear the bank and they will do nothing about it afterwards.

• If you are attempting to settle or delay payment to a creditor due to an inability to pay, it is wise not to mention marital problems as a source of your financial problems. Acceptable problems include loss of job, medical bills, etc. Marital problems tend to alert them to an upcoming divorce and they may file legal collection procedures sooner than they normally would.

• Regardless of what they say, most collection agencies or retailers will not take a debtor to court unless it is a fairly large debt. Court fees, attorneys, and time is expensive and court settlements do not necessarily collect the money if the person is unemployed, has no assets or is a professional deadbeat.

• If a collection agent or creditor does sue you, they may use a trick call inconvenient venue, meaning they will file in a court as far as possible from you. They need to have a branch business in this city to do it but if they can file in the county and far from you, it makes it difficult for you to appear at the courthouse to defend yourself.

• Collection agencies will often settle for a small percentage of the debt in return for listing the account as closed or paid, especially if they see you have a reasonable defense and/or you have no assets or income that can be easily seized or garnished.

• Even though a debt is paid off, if it is overdue it will be listed on your credit report with a notation "paid off after write-off" or something similar. It does not disappear from the credit report automatically.

• It is possible to ask an issuing company to suspend your credit card for six months or so until you pay off the amounts owed them in a series of payments. This sometimes prevents negative credit reports and returns the card to you that otherwise would have been cancelled.

• If you are having a temporary problem paying your bills, it is often better to pay the smaller bills thereby shortening the list of the number of people you owe and let the larger creditors wait a month or two or possibly even three. This generally means you will have a better chance of keeping a positive credit history as the larger creditors will not run in the reports until this period has passed.

• Even if a merchant or retailer has a policy of no refunds-no exchanges, a consumer can legally dispute and win any reasonable claim if the purchase is made on a credit card. For this reason, if there is any suspicion of an up-coming problem with the service, transportation company or merchant, one should pay with a credit card and not with cash or a check.

• It generally takes three to five days to replace a lost or stolen credit card with the exception of some premium cards which will do an emergency replacement in two days or less.