When you receive debt collection calls do you just ignore them with the attitude “Why bother, I will always have bad credit”? Have you ever attempted to get a free credit score and later find out that it is not actually free?
In this article we will discuss the negative aspects of applying these approaches to a life of indebtedness. We will also close with a few excellent tips to help you check your credit regularly and clear up negative items that may appear.
We will set up a scenario that may have recently played out in your own life. Things are going well, you are paying your bills and managing your credit quite well because of a nice job that you enjoy. Although you have been hearing rumors of financing troubles in your company you ignore them because you are not the type to listen to (or spread) rumors. A few weeks later you are called into the HR office and told that it is nothing that you have done, but the company is cutting back and they are going to have to let you go. Now that unemployment insurance pays much less than you were making on the job you have to cut back on the amount being sent to the creditors. Now it is a few months later and there is no job in sight. You have cut back a little too far on too many of those creditors and the consequences of this situation are becoming more and more apparent.
Let’s start with the approach of ignoring collection calls and how that can cost you. Once a bill is in the hands of a collection agency it will cost 70 points on your credit score. Not too bad, you say? What if you have three bills that are in collection? You ignored the letters that came for these and now let the phone ring when they call. That would be 210 points just for these three collections. Can you do anything to help this situation? Certainly. If you pick up the phone when they call it is possible that they will take less than the total owed. It is also likely that when you make that lower payment you can also get the negative posting off of your report. Will this cost you 70 points every year until you negotiate a deal? No, it will not. The number per year declines to the point that it is better to leave it alone until it is automatically removed or sold to another collection agency. Once the new agency calls it is time to negotiate a payment and make it disappear.
Do you see the ads on television for a free credit score and feel the need to call and sign up right away? If so, consider yourself to be an average American. Be sure to pay attention to the fine print when you do, though, because there is usually some sort of a catch. Thanks to relatively recent credit legislation you are entitled to a free credit report every year, you just need to know where you can get it without paying a dime. There are three credit reporting agencies that will provide this report to you every year. They are Equifax, Experian, and TransUnion. Two other locations to acquire your free credit score are www.annualcreditreport.com and www.creditkarma.com .
You have seen the sites above that will give you a free credit score; you should use these to keep a regular check on your credit history. What should you do if you find errors? Easy answer – dispute them. Once you file a dispute with the credit reporting agency they will notify the filing business that you have disputed the claim. They may research this and find out that it was due to simple human error and remove it. If they insist that the negative filing is accurate do you still have a recourse to fight it? You certainly do, but be sure that you do not contact the filing business directly. Contact the credit reporting bureau again and provide proof that the bill cannot be yours. Maybe it is a property tax bill and you have never lived there. Maybe it is a medical bill that is from a doctor that you have never visited. As a matter of fact, if they still refuse to remove a negative filing that is verifiably incorrect, you can send them a letter every 11 days until the end of time.
Yes, even in today’s unstable economy you can have an excellent credit score above 740. If you will take the time to follow some simple advice it will not cost you a dime and you can have the high credit score that is necessary for a car loan, mortgage, or any other type of loan that may be desired.