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INTRODUCTION

Have you ever felt like you are the only person you know who has credit problems?  Have you ever thought, “My credit is so bad, I’ll never get out of this!”
Do you feel hopeless and full of despair? Well, in fact you are not alone! Personal credit problems have been affecting individuals in record numbers. In fact, it is estimated that almost 60% of Americans have experienced past or present credit problems.
Millions of honest, hard-working people are having trouble paying their bills, especially in a timely fashion. Amazingly, over one million people file for bankruptcy each year!
Even if you have experienced major financial reverses or severe personal circumstances affecting your credit, it is still possible to qualify for credit again and to improve your credit status.
Most creditors are willing to offer credit to individuals who have demonstrated that they have made significant efforts to turn their financial status around, even if they don’t have the most perfect credit reports.

In the following pages, we will take you through a step-by-step process that will help you:

  • Clearly, understand your present credit situation.
  • Develop an effective strategy to improve your credit status.
  • Confront and assert yourself in relationship to your creditors and credit reporting agencies.
  • Understand your legal rights.
  • Actually, re-establish credit!
  • Will it take some work and persistence? Absolutely!
  • Will it be worth it? Absolutely!

Getting Started

Before you read any further in this manual, you must build a foundation for your credit repair efforts.
This foundation is based on:

  • Preparation
  • A solid understanding of where you stand
  • Clear information from credit reporting agencies
  • Most importantly, an organized system of putting your papers and files together so that you can more easily document inconsistencies, errors, and misstatements that may appear on your credit report
  • Where do I begin?
  • You can start by taking whatever time is required to carefully sort through your bills, organize them by type and company, and put them in chronological order, from oldest to most recent.
  • Take a look at the pattern of payments you have been making. See if this pattern is consistent with different companies, or if it only applies to particular ones.
  • Check out the due dates and understand the time frame that you have been using to pay your bills.
  • It would be most helpful to create a chart listing the companies, the payment due dates, and the actual dates that you made payments. Sometimes a shift by just a few days can have an extremely positive effect on your credit status.

A GOOD IDEA!

It is helpful in the early stages of credit repair to take a look at your income and expenses – real expenses and not just mortgage and car payments. Keep a daily log for several weeks to get a better handle on where your income actually is going.
Calculate fixed monthly payments, such as rent or mortgage, electric, auto, insurance, telephone, cable TV, other utilities, etc. and compare these to the total monthly household income after taxes.It is imperative that you clearly understand your flow of income and expenses so that you are in a position to turn your financial problems around.

How do I get organized?

In outline form, here is a summary of the initial preparation steps: 
1. Sort all of your bills.
2. Organize your bills in chronological order.
3. Examine your payment pattern.
4. Thoroughly review your checkbook.
5. Make a flowchart to show where your money is going.
6. List all of your monthly recurring payments.

Keep in mind

  • Work from a position of strength.
  • Clearly understand your position.
  • Develop strategies to make positive changes.
  • Always remember that repairing your credit is possible, but it can be a battle. You need to be armed, ready, fully prepared, and informed in order to win.

That’s what this comprehensive guide is all about.

Terms You Should Know

What is credit and how does it work?

Credit is defined in Webster’s Dictionary as “the favorable reputation derived from the confidence of others, honor; good opinion founded on the belief of a man’s veracity; integrity, abilities, and virtue.” In short, credit is based on trust.

A lender “trusts” that a borrower will honor the debt, and pay it back in accordance with their prior agreement. In essence, a creditor is someone who is willing to place his/her faith in you.  The word ‘creditor” is derived from the Latin word “credere”’ which means to put faith or trust in.

Although credit in today’s world is still based on trust, it has been depersonalized by credit cards. An agreement between two individuals, concluded by the traditional shaking of hands, is almost something of the past.  Still, the debtor’s responsibilities for repayment and the expectations of the lender are basically the same.

Credit has assumed a greatly expanded role in the lives of most Americans, and buying on credit can be both a blessing and a curse for many individuals.

Unfortunately, for many people, living beyond their means is accepted as a way of life.  Many people tend not only to spend next month’s earnings before they earn it, but even next year’s!

Most people just aren’t willing to wait until they have the cash to buy the necessities of life.  When a person buys on credit, the added cost of having what they want, and having it now, is called interest charges.

This is even more apparent when purchasing a home, car, appliances, and other high-ticket items.  Initially, the convenience of having what we desire seems to outweigh the inconvenience of the principal debt, plus the interest, at the time of a purchase.

But, when a person finally realizes that they have dangerously extended him/herself, it’s often too late to place good judgment over credit convenience.

It’s easy to know when a person has overextended themselves.  Everything looks good and feels great as he/she merrily purchases gifts, clothing, meals, and miscellaneous high-ticket items.

But when he/she also starts using credit cards to pay the rent and groceries or, worse yet, pay off other credit cards, then the writing is on the wall.

If you are one of those people, don’t feel alone! There are millions of people who are in credit trouble because they have abused their credit.  As you shall see, a bad credit rating isn’t always the borrower’s fault!

However, when it knowingly is, there is no one else to blame.  Not the banks, the retail stores, service stations, or the credit card companies.  The ultimate responsibility lies with the person who signed the bottom line.

Incredibly, most Americans feel totally helpless when they finally discover or admit they are in financial trouble, or that something is wrong with their credit rating.

Most Americans seem to have only the vaguest idea about the mechanics and procedures required in obtaining, maintaining, and re-establishing a good credit standing.

What is a credit history?

A credit history is a record of the credit you have been granted in the past and how well you have met your obligation to pay your debts. Your credit history includes both whether you have paid your debts and whether you have paid them on time.

What is a credit rating?

A credit rating is an assessment of your ability to pay off debt based on your credit history.

What is a credit reporting agency?

A credit reporting agency (or CRA), also known as a credit bureau, is a company that gathers information about your credit history and sells that information to other companies that extend credit.

What is consumer debt?

Consumer debt is monies owed as the result of obtaining goods or services for personal or household use.

What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act, also known as the FCRA, is a set of US government rules that require the information supplied by CRAs about your credit history to be complete and accurate and available to you on request.

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices ACT, or FDCPA, is enforced by the Federal Trade Commission to prevent debt collectors from using abuse, deception, and harassment when attempting to collect debts from consumers. Improper collection practices under the FDCPA include:

• Telephoning the consumer’s workplace

• Revealing the debt to people or companies other than the person responsible for paying the debt

• Threatening or harassing the person who owes the debt

• Continuing to contact the consumer after he/she has asked for contact to cease

• Demanding a payment in excess of that which is owed or which the law permits

• Continuing collection efforts when a consumer disputes a debt without first verifying the debt in writing

What is refinancing?

Refinancing is the payment of debt by borrowing additional monies. Be careful when refinancing, though – There are many unscrupulous companies that will add huge sums to your existing debt with hidden costs and high fees.

Also, some companies, such as utilities, will set up a flexible repayment plan to enable you to pay off your debt, so that refinancing is unnecessary. Do not let a debt collection agency pressure you into refinancing!

What is a debit card?

A debit card takes money directly out of your bank account as soon as you use it. By contrast, when you use a credit card, you receive a bill within a designated time period for the credit that has been extended to you. You are responsible for paying the charges on the credit card bill.

What is bankruptcy?

Bankruptcy is a legal procedure through which people and businesses who cannot pay off their debts arrange to either have the debts “discharged” (erased) or paid off over time during the bankruptcy proceedings.

Did you know that every year, almost one million Americans file for bankruptcy? That translates into almost one out of every one hundred households.

DID YOU KNOW?

  • Chapter 7 bankruptcies stay on your credit record for 10 years.
  • All bankruptcy claims are filed in federal courts.
  • There are serious disadvantages to consider when filing for bankruptcy. For instance, you may have more difficulty renting a home once you have filed for bankruptcy. If filing for bankruptcy does not wipe out at least half your debt, it probably makes sense to meet your obligations in some other way.
  •  For consumers, there are two main types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy, which is the most common form of bankruptcy, enables you to wipe out most consumer debts. These would include credit card debt, merchant card debt, medical bills, car loans, utility and phone bills, back rent, etc.

In return, however, it may be necessary for you to surrender property, such as a second car, a vacation home, or valuable electronic equipment.

These items will be sold to pay off the debts of the person who has filed Chapter 7. Most debts left over after this sale of personal assets will be erased. Types of debts that cannot be removed from Chapter 7 bankruptcy proceedings include child support and taxes.

What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy, also known as reorganization, is usually filed by people who plan to pay off their debts within a three- to five-year period. People who elect to file Chapter 13 generally:

• Have a property that they wish to keep.

• Have regular income that will cover both their living expenses plus the amount that is needed to pay off their debt.

The person who files for Chapter 13 will list all of his or her assets and liabilities and also submits a plan for repayment.

For more information about credit, credit counseling, and bankruptcy, visit these websites:

WEBSITE                                         ORGANIZATION

www.abiworld.org                       The American Bankruptcy Institute

nacba.com                                      National Association of Consumer Bankruptcy                                                                                 Attorneys

www.nacm.org                                National Association of Credit Management

www.consumerlaw.org                National Consumer Law Center

www.ncua.gov                                National Credit Union Administration

www.nfcc.org                                  National Foundation for Credit Counseling

www.aiccca.org                             The Association of Independent Consumer Credit                                                                         Counseling Agencies (AICCCA)

Establishing Or Re-establishing Good Credit

It is very unusual to have no credit history at all.  The only way to do this is to pay cash for everything.  This is a society based on the credit system.  Getting ahead in this credit society is hard for those who have been denied access to this credit system.

If you apply for a loan and have no credit history, the lender has to trust you enough to believe that you will pay it back.  He has no references that support your creditworthiness.

The lender is taking a bigger risk in this kind of a situation and will act accordingly.  If you are over 25 years of age and have no previous credit history, then red flags will fly in the lender’s mind.

Why hasn’t someone trusted you before? What could you be hiding? These unanswered questions will be the demise of your possible loan.

If you have had a bad credit history, then you must now prove to the lender that you have changed your ways, or that your bad credit is/was due to circumstances beyond your control.

Steps to Establish Or Re-establish Your Credit:

(1) Open a checking account.  Assuming you keep your account correctly, you can use this account as a credit reference.  After a few months, ask for a bank card line of credit.

(2) Check about getting a loan with your savings account used for security.  If you don’t  have a savings account, borrow the money (a small amount, say $200) from a friend or relative. Then pay them back as soon as you get the loan.  Pay off this small note on a short (three month) term.  Then repeat the process.

(3) Apply for a credit line at a local retailer.  This will be easier to get than a bank loan or travel card.  Start by asking for a small credit limit.  After you have proven your creditworthiness,  increase your credit limit.

(4) Apply for a department store or oil company credit card.  These are the easiest to qualify for.

(5) Get a secured credit card.  After keeping your account current for a year, ask them to refund your deposit.

(6) You might have good credit that you’ve forgotten about.  Think back, and dig out past creditors that reflect good paying habits.

(7) Go to an appliance or department store and make a large purchase.  Pay 50       percent up front, and ask them to carry the balance for a specific amount of time.

(8) If you are refused credit, find out why.  It could be an easily corrected mistake.  Fix it,  and apply again.

How Banks Analyze Your Creditworthiness

The first thing your loan officer will scrutinize is your ability to repay a loan.  To do this, he looks at your FICO Score, employment, the length of time of that employment, and the stability of that employment.

Is your occupation stable, or are there layoffs? Is it seasonal work? This is the first thing the lender will find out.  He/she will want to know that income has previously been spent.

Do you have previous obligations, such as alimony or child support? If your present living expense Ls in excess of 40 percent of your gross monthly income, then, in all probability, your loan will be denied.

The next thing your lender will look at is your personal character.  The fact that you have the ability to pay, does not guarantee you have the character to pay.

Some indications of a stable character are credit checks through credit bureaus, length of time in the community, etc.  Most lenders will make a personal judgment of your character during your personal contact.  Do everything you can to make a good impression.

Then the lender will want to protect himself if he has been misled on your ability to pay or misjudged your character.  This is security or collateral.  Your lender will not lend you $1,000 for a new couch that’s worth $500.  If you would not repay, the collateral needs to cover the amount of unpaid balance.

The FICO SCORE

Most banks, finance companies, and other lenders are now using a credit scoring system created by Fair Isaac and Company when analyzing a potential loan approval. Known as the FICO score, this new system is often the deciding factor in loan approval and interest rate.  The following is an example of the components that comprise the FICO score:

Past Payment History

¾ Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)  ¾ Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)  ¾ Severity of delinquency (how long past due)  ¾ Amount past due on delinquent accounts or collection items  ¾ Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)  ¾ Number of past due items on file  ¾ Number of accounts paid as agreed

Amount Of Credit Owed

¾ Amount owing on accounts  ¾ Amount owing on specific types of accounts  ¾ Lack of a specific type of balance, in some cases  ¾ Number of accounts with balances  ¾ Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)  ¾ Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)
Length Of Time Credit Established

¾ Time since accounts opened  ¾ Time since accounts opened, by specific type of account  ¾ Time since account activity

Search For and Acquisition Of New Credit

¾ Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account  ¾ Number of recent credit inquiries  ¾ Time since recent account opening(s), by type of account  ¾ Time since credit inquiry(s)  ¾ Re-establishment of positive credit history following past payment problems

Types Of Credit Established

¾ Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

The FICO score is virtually used by all banks and is a considerable factor in credit approval and or denial.

Applying For A Loan

Talk to the loan officer at the lending institution you plan on using.  Find out:

¾ What credit bureau they use and if the FICO scoring system will be used.

¾ Who is the decision maker who grants or denies the loan.

¾ Debt-income ratio on approved loans (as mentioned before, most lenders will deny loans to persons whose outgoing indebtedness is 40 percent or more of their income).

¾ What the lender is looking for in length of employment, and length of time at present residence.

¾ The type of loan frequently granted by this lending institution.

Lenders are required, by the Truth in Lending Act, to disclose to you the following:

¾ Interest rate on loan

¾ Total cost of loan

¾ Amount of monthly payments

¾ Date payments are due

Most loan contracts have parts, or all, of the Truth in Lending Act printed on the back.

Get your credit report from the bureau which the lender subscribes to.  Make sure it is in agreement with your credit application.

If there is anything in the report that needs explaining, write the explanation and submit it with your loan application.

Get two copies of your loan application.  Do your figuring on your first copy.  If you need to, you can always get another.

The copy you submit needs to be written neatly and clearly, in block letters.  Do not scratch out or change numbers.

This raises questions. Most lenders do not verify the income amount unless the amount seems questionable.

Take your credit application to your loan officer in person by appointment.  Try to make a positive impression by your way of dress, body language, and personal mannerisms.
The loan officer will be able to give you his personal opinion as to whether the loan seems favorable or unfavorable.  Explain things he/she doesn’t understand.  A personal reference from your employer is another point for your side.

If your loan is denied, ask why.  See if you can talk to the person in charge.  Maybe there is something you could explain that would change his mind.  Maybe you can personally convince him to take a chance in trusting you.

Don’t stop there.  Go to another lender.  There may be one lender out there who is willing to take a chance on you.  See if you can find him.

Don’t give up too easily.  Apply with only one lender at a time.  After you have received this new line of credit, make sure you keep all your payments current, proving your trustworthiness.

Credit Unions

As a member of a credit union, your chances of getting a loan there are better than at other lending institutions.

Your monthly payments are usually made by payroll deduction’ reducing the risk of nonpayment.  Because of this, your work history and income-debt ratio are looked at more carefully than your credit history.

Credit unions also offer lower interest rates than banks or finance companies.  If your company has a credit union, join-it’s a fringe benefit most people do not take advantage of.  Use it.

Credit Cards and Loans

Generally, when the average person thinks of credit cards, Visa and MasterCard come to mind.  They are relatively easy to get, by either applying direct or through your local banking institution.

The most widely-known charge cards are American Express, Diners Club, and Carte Blanche.  They also are thought of as the travel-and-entertainment credit cards and are used extensively by business executives.

Businesses that accept credit cards are airlines, hotels, restaurants, retailers, and many other businesses that cater to travelers.  These credit companies also offer services including traveler’s checks, travel insurance, hotel and airline reservations, emergency cash, check cashing and subscriptions to travel and entertainment magazines.

Many businesses offer credit cards exclusive to their business.  The purpose is to attract buyers to their establishments in an effort to attract consumers away from their competition.

This type of credit card is offered by airlines, car rental agencies, motels, oil companies, telephone companies, department stores, and other retail outlets.

Generally, there is no charge, unless payment is not promptly received within ten days or so after receipt of the billing.  In that event, an interest charge is applied.

Credit Cards

The history of credit cards began in the early part of the twentieth century.  The original credit card was to preferred customers of some exclusive hotels. Now credit cards are offered and used by almost everyone.

If you have used “plastic money’ before and found yourself sinking into debt, please be wary before using it again.  You should use a credit card carefully.  Interest rates on plastic money are much higher than on conventional loans.

Keep your balance paid as quickly as possible and try to avoid excess finance charges.  Be aware of how much the convenience of your plastic money is costing you.

Applying For A Credit Card

Apply at a local retailer. These merchants seem to judge more by face value than credit history.

Find out the requirements that will qualify you.  This can be done by phone.

Take care of filling out the application.  Ask for two forms–one to use as a worksheet, the other to submit.  Write neatly and be complete with all required information.

A secured credit card is a good way to establish, or re-establish, a line of credit.  A secured card is one that uses a savings account, or C.D. account, as collateral.

This eliminates the credit card company’s risk. Chances are if you have a negative credit history, or no credit history, this will be the only kind of plastic money available to you.

Remember, credit cards can tempt you to overspend.  You should use a credit card wisely, and for convenience only.Exercise good judgment, and prove your creditworthiness.

The Equal Credit Opportunity Act applies to credit card applications as well.  Use your rights to equal opportunities.

Consumer Credit Loans

There are basically two types of loans-Secured and Unsecured.  A secured loan normally requires that some type of real property is pledged as collateral.

In the event of a default, the real property can be sold to recover a loss.  Real property may include securities, an automobile, real estate, a boat, jewelry, or anything else of value.

An unsecured loan is one that requires no real property, or other security, for support.  The granting of this type of loan is approved on the basis of a person’s reputation, past payment record, and known ability to repay.

When there is no credit history, or if a borrower doesn’t have a strong credit history or property that can be used as collateral, a co-signer with good credit can secure a loan for the person who needs money.  The problem with this arrangement is that if the borrower defaults, the lender will expect the co-signer to pay the debt.

Payment Methods and Interest

Installment payments are payments that are made over a period of time (usually monthly) to reduce a loan.

The borrower normally doesn’t have full use of the money during the life of the loan, and interest charges can involve complicated formulas.

When a lender borrows money, he must provide interest-charge information before a transaction.

Single-payment loans involve borrowing money for a specified period.  At the end of that period, which may be from 30 days to one year or more, the loan, plus the interest, must be paid back in a single payment.

Determining the interest on a single-payment loan is fairly easy to do.  You simply divide the interest charge by the principal.

Divide that amount by the months of the loan.  Multiply that amount by 12 to determine the yearly interest rate.

For example, A person borrows $500 for a period of six months from a banking institution that uses the simple-interest methods.  The finance charge is  $35.

To compute: $35 divided by $500 equals .07; .07 divided by six months, equals .01 17.  Multiply .01 17 by 12 months and your answer is 14 percent.

The borrower is paying 14 percent for the use of the $500 loan.

Specific Loans That Can Create A Good Credit Rating

In order to generate the sale of automobiles, major car manufacturers have established their own loan-payment programs.  Millions of Americans now bypass lending institutions altogether and go directly to car dealerships, which are often much more liberal with loan applications.

After all, they are in the business of selling cars, trucks, vans, etc., not denying loan applications.  Also, a vehicle, plus a modest down payment, serves as collateral in the event that a borrower defaults.

The vehicle would simply be repossessed and sold again to cover any loss.  Purchasing a new or used vehicle directly from a car dealer is an easy way to establish, or reestablish good credit.

Debt-consolidation loans are another way of getting back on track.  This type of loan will allow you to pay off all of your creditors by making one single, monthly payment to a lending institution.

The payments are almost always far less than the various payments you were paying when added together.  Consolidation is a great way of maintaining or re-establishing, an Al credit rating.

Overdraft loans have become increasingly popular and can protect your credit rating by avoiding the embarrassment of having checks bounce.  An overdraft loan is a type of loan that has been approved before a need for the money has occurred.

When you need the cash, you simply write a check.  When your account is overdrawn, the bank then lends the money automatically up to your approved loan limit.  Usually, you will be expected to pay it back in monthly installments, much the same as a credit card account.

Check loans are another way of establishing good credit.  This loan plan involves the issuance of a special set of check blanks.

When you want to borrow money, you write an amount on the check and receive an instant loan. The following month, you will automatically receive your installment payment coupons.

If you have a savings account but haven’t established credit, you can establish credit with a banking institution by borrowing from yourself!

Thrift accounts, or passbook loans, allow you to make a loan up to the amount that you have in your savings.  Because the banking institution is taking no risk, a loan can be approved quickly.

Credit Sources Commonly Used To Establish Good Credit

COMMERCIAL BANKS offer a wide variety of loans, including personal loans, auto, business, overdraft, student, credit card, thrift, single and installment loans, and secured or unsecured loans.

CREDIT UNIONS AND FINANCE COMPANIES offer auto loans, second mortgages on real estate, personal and debt consolidation loans, installment and single-payment loans, secured and unsecured.

LIFE INSURANCE COMPANIES will loan you money against the value of a life insurance policy for any purpose.  These amounts, plus interest, will be deducted from the face value of an eventual claim if the loan is not paid back.

STOCKBROKERS may arrange loans for clients to purchase stocks, etc., or secure loans against the value of stocks already owned.

SALES FINANCE COMPANIES lend money for the purpose of marketing a product that is often a high-ticket item.  After the item is sold, the dealer may then sell the contract to a bank or finance company.

SAVINGS AND LOANS offer all types of mortgages, home improvement, overdraft, credit card, student, installment, secured, single payment, and car loans.

LOANS BY MAIL can get you a personal loan through the mail from executive finance companies if you have a good credit record and substantial income.  However, the finance charges are usually high.

SECOND MORTGAGE COMPANIES specialize in second mortgage loans on your home. The total finance costs, including interest charges, can be very high when you tap into a second

FEDERAL GOVERNMENT LOAN PROGRAMS offer many loan programs to those who qualify.  With a government loan guarantee, you can get a loan approved at your local bank that might have otherwise been denied, because of the government “guarantees’ that the loan will be repaid by them if you default.

The bank has nothing to lose! Examples of government guaranteed loans are student loans, farm loans, business loans, VA, FHA, and SBA loans.

PAWN SHOPS are a last resort for many people.  A pawnshop will accept just about anything as collateral on a single-payment loan.

The problem with this type of loan is that the borrower can receive as little as 10 percent of the actual resale value of an item.

Also, if the loan is not paid back in a certain period of time, the pawnshop dealer can sell the item to recover his money and make a good profit besides.

Women and Credit

Projections from the U.S. Census Bureau state that of 100 typical American women now 21 years old, six will never marry.  Ninety-four of them will marry, and 33 of them will see that marriage end in divorce.  Out of the remaining 61 who stay married, 46 will outlive their husbands.  Thus, 85 out of 100 women will be on their own at some time in their lives.

Of the 61 who stay married, what percentage of them married men with a bad credit history? Of the 33 who divorce, how many of them come out of the marriage with their own personal, positive credit history?

How many women know how much their net worth is? What their husband’s life insurance policy is worth? Every woman-married, single, or divorced should be able to answer these questions, but how many can?

Financial planning is an abstract concept that has no meaning until it is used in our everyday life.  Women deserve credit.  A good credit history is as important to a woman as it is to a man.

A woman should use the steps in this manual to find out what her credit history is.  If she has none, she should work at establishing some.

If it is a negative history, she should take the necessary steps to fix it and work at reestablishing good credit.  This should be done in her own name, not as Mrs. “John Doe.”

Remember the Equal Credit Opportunity Act.  Again, exercise your right to equal opportunities.  A lender cannot deny you credit because of sex or marital status.

Consumer Protection Laws – The Fair Credit Reporting Act

You can protect your credit by being aware of legal facts regarding your consumer credit protection rights.  All too often, consumers have their credit damaged unjustly as a result of misinformation being placed in their credit file.

The Fair Credit Reporting Act (FCRA) is a United States federal law that regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Under the (FCRA) you have the right to dispute any information listed on your credit report that you feel is not 100% accurate. This law is the basis for allowing you to dispute negative information on your credit report and get it removed.

It was originally passed in 1970 and is enforced by the US Federal Trade Commission and private litigants.

Under The Fair Credit Reporting Act You Have The Right:

(1)  To know the name and address of the credit reporting agency that prepared the credit  profile which was used by the subscriber to deny you credit.

(2)  To receive information from a credit reporting agency pertaining to the nature,          substance, and the sources (not including investigative sources) regarding the information collected about you.

(3)  To have an attorney, credit consultant, or anyone of your choice, accompany you when visiting the office of the credit reporting agency.

(4)  To know who has received a report on you in the past six months, or within the preceding two years, if the report was pulled for employment purposes.

(5)  To find out all information held on you, without any charge, in the event you have been denied credit or employment in the past 90 days.

(6) To have information pertaining to you, that you disagree with, and, therefore, dispute, reinvestigated, and corrected or removed if inaccurate or unverified.

(7)  To place a statement in the credit reporting agency’s files if you continue to dispute the accuracy of any items after a reinvestigation.

(8)  To have an updated report sent to those credit grantors who have received a report pertaining to you within the last 3 months.

(9)  To request that the credit reporting agency send your side of the dispute to your potential credit grantors.

(10) To sue a credit agency if it willfully or negligently violates the law in reference to possible damages resulting from such an act.

(11)  To have a credit report kept from anyone who, under the law, does not have a legitimate business need to receive that information.

(12)  Not to have adverse information pertaining to you over seven years, or bankruptcies for ten years, on file or reported.

(13)  To be notified by a business that ordered an investigative report for information about the nature and extent of the investigation.

(14)  To be notified by a business asking for information about you that would constitute the equivalent of an investigative consumer report.

(15)  To discover the nature and substance (but not the source) of the information that was collected for an investigative consumer report.

The Fair Credit Billing Act

Have you ever received a bill and didn’t know what it was for? Billing errors can damage your credit standing, even if they didn’t belong to you! The Fair Credit Billing Act was enacted in 1975 to protect consumers from billing errors so that they can be resolved expeditiously and in a fair manner.

This Law Protects You From The Following Errors:

1) Charges for goods or services that were not accepted or delivered as agreed.

2) Charges which are incorrectly identified in terms of amounts or dates.

3) Charges not made by the person, or persons, authorized to use the account.

4) Failure to reflect payments, returns, or other credits.

5) Bills that were delivered to the incorrect address (even though you made a change of address notification in a timely manner).

6) Charges for which a written proof of purchase had been requested.

The law also provides that a creditor may not report an account delinquent to a credit reporting agency while there is a dispute that has been filed by the borrower or party involved.

Dealing With Collection Agencies

Third-party collection agencies are regulated by the Fair Debt Collection Practices Act.  This Act outlines what a debt collector cannot do in collecting a debt for others.

They are not allowed to:

(1) Contact you at inconvenient or unusual times or places, such as before 8:00AM or after 9:00PM, unless you agree.

(2)  Contact you at your place of employment if your employer doesn’t approve.

(3)  Contact you after you send written a notice to an agency to stop, except to state that there will be no further contact, or to notify you that specific action will be taken if that specific action is usually taken by the collector.  In that event, your account will probably be referred to an attorney immediately.

(4)  Contact anyone but your attorney if you have one. Otherwise, a collector may contact other people only to determine where you work or live.

(5)  Tell people that you owe money, except you or your attorney.

(6)  Advertise your debt or publish a list of non-payers, except to credit bureaus.

(7)  Harass, oppress, or abuse any person, such as the use of threats of violence or harm to property or reputation, use of obscene or profane language, repeated use of the telephone to annoy someone, or telephone without identifying themselves.

(8)  Make false statements when collecting a debt, such as falsely implying that they are an attorney or government representative, falsely imply that you have committed a crime, falsely imply that they work for a credit bureau, misrepresent the amount of debt, indicate papers are legal when they are not.

(9)  Fail to give you written notice within five days after contacting you, tell you the amount owed, the name of the creditor, and what to do if you feel you do not owe the money.

(10) Contact you about the debt if you deny owing the debt within 30 days after being contacted, unless you are sent proof of the debt.

(11)  Imply or say that you will be arrested for nonpayment.

(12)  Say that they will take legal action unless the creditor intends to do so and that it is legal.

(13)  Give false credit information about you to anyone.

(14)  Send you official-looking documents that appear like the documents a court or agency of any United States government body might send.

(15)  Use any false name.

(16)  Deposit a postdated check before the date of the check.

(17)  Make you pay for communications, such as collect calls or telegrams.

(18)  Contact you by postcard that could advertise your debt.

(19)  Put anything on an envelope that shows the communication is about the collection of a debt.  For example, Midwest Collections is not an acceptable return address.

(20)  Fail to apply amounts to the specific debts you choose.

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