Before you can set any plan into action, you will need to review your current financial status. Begin by writing down all your creditors. A creditor is someone to whom you owe money. Begin the chart by listing all of your monthly creditors, for example; credit card companies, loan payments for car or home and don’t forget your utility bills, such as electric, gas, phone, etc., those are creditors also!
- Creditor: write down the name of the creditor.
- Account Number: list the number of the account here.
- Arrears: write down the total amount that you are behind.
- Monthly Minimum Payments: when you receive your bill, this is the amount you are requested to pay.
- Balance on Account: the total amount due on the account. This figure usually varies from month to month if it is an interest account.
- Last Payment: enter the date of the last payment made on the account.
- Due Date: this is helpful in organizing your accounts by when they are due and payable in the month.
This is a very short lesson but a very important one. As mentioned earlier, reviewing your accounts means just that. Study all aspects of your accounts. Get to know the rules, interest rates, term (length) of contract, default (late payment) penalties and possible alternative restructuring plans especially in the case of a threatened or already filed foreclosure (law suit filed by your mortgage company in an effort to take back your home). Most banks and mortgage companies now have special departments trained to assist you in alternatives to foreclosure but you will need to exercise this privilege and aggressively pursue what is called a forbearance plan further explained later.
All of the information you have listed your Review of Accounts Form that you just created will be transferred to the monthly budget later, so make sure you have listed all of your creditor accounts.
If your credit bureau report shows negative information about your accounts such as late payments, charge offs, repossession, foreclosure or possibly a bankruptcy and it is true, these remarks must remain on the bureau for the specified time allowed. For example, late payments and charge offs remain on your report for seven years while a bankruptcy will remain for up to ten years.
It is never too late to turn your financial life around. You can rebuild your credit status. By simply paying your bills on time and not overextending yourself, you will begin to demonstrate a good payment history. Within a short amount of time, your positive credit history will build. Eventually, the negative information will be deleted from your credit report leaving you with the positive history you are starting to build today. To apply for new credit that you can use to start rebuilding your credit click here.
The steps in these lessons are proven and effective. The next lesson deals with reviewing your accounts. Get to know what makes up a contract. Learn about what you have signed. The more you know about the promises you have made, the better negotiator you will become. Your creditors will respect you for actually taking the time to care about the financial situation you are experiencing (in most cases).
Your financial character and stability are your tools for your financial independence. Use them wisely. YOUR financial future depends on it.
At least half of all credit bureau reports contain errors. It could be something very minor such as the misspelling of your first name or something more detrimental like delinquent accounts that are not yours. All too frequently information is carelessly entered on your report causing your potential lender to deny you credit because of
false or misreported information. If your credit file contains errors that you know are incorrect such as accounts that are not yours, you can dispute them. Enclosed with your bureau report should be a dispute form . This form allows you to correct any information that is not being reported correctly, whether it is your date of birth, home address or loan account that is not yours. If you did not receive a dispute form, you can just as easily write a letter detailing the inaccurate information. Be sure and wrote your name, social security number, date of birth, and home address at the top of the page. You will again be required to provide ALL of your identification information as detailed under (How to get a copy of your credit bureau report) in Lesson 2. List the account number(s) of the disputed item(s) and detail a reason for the dispute such as; “the account is not mine” or “the account was paid in full.” Be sure to back up your statement with a copy of your cancelled check verifying that the account as paid in full or a copy of your social security card in the event that you social security number is being misreported.
It can be very helpful if you make a copy of the original credit bureau report and highlight all the errors with a yellow hi-lighter to draw the credit bureau’s attention to the items you are disputing.
Before mailing your dispute letter, with the highlighted copy of your bureau report and proof of claim, make copies of your correspondence and file the copies in a file folder with the credit bureau’s name on it.
Mail the original documents “certified with return receipt” to the credit bureau. The credit bureau has thirty (30) days in which to respond to you and make the appropriate changes. The credit bureau will mail you a copy of your credit report with the appropriate changes. Read it over carefully. If the credit bureau failed to update an account to your specifications, send another dispute form or letter and repeat this process until you get your desired results.
If the credit bureau does not respond to your requests, call the credit bureau. If you mailed the documents “certified with return receipt” you will have proof that the documents were sent and that the credit bureau did receive them.
Remember that you will need to repeat this same process with all three major credit bureaus. Since the credit bureaus are independent of each other they more than likely will be reporting different information.
How do you get a copy of your credit report?
There are many credit reporting agencies, but the three major credit bureaus that are used most often are: Equifax, Experian and TransUnion. It is recommended that you check for inaccuracies at least once every twelve (12) months.
If you have been turned down for credit in the past sixty (60) days due to negative information being reported by the credit bureau, the report is free. Be sure to enclose a copy of your recent credit denial letter for proof.
If you have not been turned down for credit but want to get a copy of your credit report you will need to enclose a check or money order made payable to the
credit reporting agency in the amount the bureau’s charge in your state. See credit report agencies contact information below.
Due to the identity theft and credit fraud that is occurring these days, the credit bureaus are attempting to reduce consumer fraud risk by making sure you are who you say you are. It is necessary to include copies of your government identification card and a utility bill. Accepted identification includes one of the following:
• Drivers License
• State ID Card
• Military ID Card
Additionally, you will also usually be required to provide a copy of one of the following:
• Utility Bill
• Bank Statement
• Insurance Statement
To protect your personal identification information, the credit bureaus will not mail back correspondence that you send them, so don’t send originals; always send copies. Make sure the copies are clear and legible and enlarge the copies if necessary. Always be sure to include all identification information as follows: full name including middle initial (and generation such as Jr., Sr., II, III, etc.), your previous address for the past two years, social security number and date of birth.
It might be wise to call the credit bureau reporting agency, before you mail your request letter, to verify mailing addresses due to the fact they seem to change their post office box numbers quite frequently. The toll free telephone numbers and websites of the three major credit bureaus are:
Toll Free Lines Websites
• Experian 888-397-3742 www.experian.com
• Equifax 800-997-2493 www.equifax.com
• Transunion 877-322-8228 www.transunion.com