Bob and Sue are real people. They are smart and resourceful, but several years ago they made some bad choices. Soon their credit was a mess. So they started their credit repair journey. Here are a few of their credit repair adventures that might shine some light on your own path. Good luck!
Cease Communication Letters Cut Two Ways
Bob and Sue were reading about credit repair and the Fair Debt Collection Practices Act on the internet. They came across information about Cease Communication Letters which would force a collector to stop calling. So one day, after getting a call from an aggressive collector, Sue suggested they send a Cease Communication Letter. They sat down at the keyboard and gleefully wrote a note to the collector demanding that he cease communication. Bob even added some impressive language to convey his knowledge of the law. They went to the Post Office, mailed the letter, and went out to celebrate their credit repair victory. And then it all went bad.
The Cease Communication Backlash
Bob and Sue thought they magically made the collector vanish. Unfortunately, the collection was about to return with a vengeance. One evening there was a knock on the door. Bob answered, and a man handed him an envelope. Bob had been served. The collector who received the Cease Communication Letter had returned the collection to the original creditor. The collection was well within the statute of limitation for collecting through the courts, and the creditor decided to sue. It was their right. Bob and Sue learned the hard way about sending Cease Communication Letters before the expiration of the Stature of Limitation. Credit repair decisions require care.
Falling for a Collection Trick
One day Bob and Sue got a friendly letter from a collection agency. It was an offer to settle an old debt for half price. Even better, Bob and Sue could make three affordable installment payments. They were determined to make their credit repair program succeed, so they called the collector and started the payment plan. It was only later that they realized the mistake. First of all, the collection was many years past the statute of limitation for collection through the courts. Worse yet, in spite of the fact that this account was showing on their credit report, the original default had occurred more than seven years ago…
Credit Repair and Timing
So what did this all mean? It meant that they did not have to pay a penny. The fact that the collection was beyond the statute of limitation for collecting through the courts meant that the collector had no way to enforce the collection. And the fact that the original default date was over seven years old meant that Bob and Sue could have disputed the presence of the account on their credit report with the credit bureaus and it would have been deleted. Credit repair is all about the timing.
Statute of Limitation Knowledge Pays Off
Sometime later, after Bob and Sue had become aware of their credit repair rights, another collection letter arrived. They were not about to be fooled again. First, Bob checked the statute of limitation and found that the original default happened about ten years previously. He had also learned about his right to validate a debt within thirty days of getting a collection letter. So he sent a letter demanding that the collector furnish proof of their legal right to collect the debt along with a true accounting of the amount claimed. Because he knew that the documentation must be objective he also insisted that the accounting come from the original creditor. The collector was never heard from again. The collection was never reported on Bob’s credit. Credit repair success is sweet.
Credit Repair and New Accounts
Bob and Sues credit repair effort was well underway. Their credit reports were really shaping up. Many derogatory accounts had been deleted. They were happy, at least until their trip to the car dealer. The finance manager ran their credit and informed them that their credit scores were too low. The reports were not bad, but the scores were dismal. After doing a little homework Bob and Sue found out about the importance of building new credit. It is not enough to clean up derogatory information. The FICO credit scoring model needs open and active credit. So they each opened two new secured credit cards. They made their payments on time and kept the balances under 20% of the high credit limit. Within a few months their scores were dramatically higher. Soon they were behind the wheel of their new car.
Budget Some Credit Repair Insurance
Bob and Sue were thrilled; their credit repair effort was successful, but they worried about a setback. They wanted to be ready for anything. So they sat down one Sunday morning and worked up a budget. When they were done they had found a way to set aside ten percent of their monthly income for a savings account. Initially they thought of it as credit repair insurance. Over time they realized it was the best thing they could have done. Their savings insured that they could maintain their perfect credit. But better yet, it gave them real inner peace and satisfaction, a new and fantastic experience.
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