I have three questions. 1. How do you know when to pay off a collection account? 2. What steps do I need to take to get this under control? 3. Is there anyone out there that is willing to advise me through email/phone conversations? I have collections on my credit report and I am struggling bad with this. I have items that are at five years and have been sold to collection agencies. The agencies are reporting that the collections are new. I did a dispute online with equifax and they deleted a few but not enough (for me). What does the last sentence in the statement below means? "This information is generally removed seven years from the initial missed payment that led to the delinquency. Missed payments and most public record items may remain on the credit report for up to seven years, except Chapters 7, 11 and 12 bankruptcies and unpaid tax liens, which may remain for up to 10 years. A paid tax lien may remain for up to seven years. Transferred accounts that have not been past due remain up to 10 years after the date the account was transferred. " I honestly do not know where to start. I have done disputes, hired an agency, I'm sinking here. It seems as know one knows how to get rid of bad credit once you are in a position to handle using credit appropriately. Please someone with a strong credit rebuilding background help me solve this. I have a orchard bank credit card, furniture in house loan, and another secured credit card through my bank with hopes of helping rebuild my credit. I understand that the debt is there and I dont need anyone telling me that over again. I need advice on how to fix it!!! I saw that someone said to pay it but doesn't paying it starts it back over again for 7 years?
Answer: Per your update: Negative items stay on your credit report for 7 years. If you pay them back at a later date, they will STILL stay for 7 years. Paying the debt back does NOT start a brand new 7 year cycle of bad credit on your credit report. - Paying back defaulted/charged off credit card accounts will not fix your credit rating...nor will this remove the defaults from your credit report. Your credit report will be updated to "Paid/settled," but the charge off notation will remain as if you never paid it back - Pay for Deletes "may" work with non credit card defaults....like defaulted cell, utility and medical bills. Pay for Deletes will NOT work with defaulted credit card debts...so don't waste your time if your defaults are all credit card defaults. Non credit card debts: If the debts are really old…like over 4 years old, again, you may just want to sit tight and let them age off naturally. You may be able to negotiate the complete removal of non credit card debts like defaulted cell, medical, utility bills etc. from your credit report with a Pay for Delete agreement. This is a written agreement where you get a signed agreement from the debt collector (PRIOR to making any payment) where they offer to remove the negative items from your credit files after an agreed-to amount is paid. They will NOT want to do this….all they want is your money and their commission and they could not care less about your credit rating….Still, you have something they want (money) and that puts you in a position to negotiate on this issue. Example letter: I am willing to resolve this issue for [$ xx] if your firm sends me a signed letter on your company’s letterhead agreeing that this account will be Paid in Full after this amount has been received and that you will remove all negative notations from my credit report after this agreed to amount is paid. Upon receipt of this letter I will mail you a USPS money order for this amount. -
Category: Credit; 2010-09-05 11:59:57
2. What sort of account in a bank will get me the best interest?
So, im going to put $250 in there when i open it, then i'm going to make consistent deposits of about $80-100 dollars a month. I need good interest! I don't have a bank account of any type, but i would like to be with wachovia / state-farm or Regions. I don't have credit either, as in, its not good or bad, or average. It doesn't exists. I haven't financed, loaned, or even had payments of any kind. I said the best interest, not "good" i would want at least 1.5% or 2%
Answer: All banks pay REALLY low interest these days, around 1% per year if you're lucky. Those pennies add up fast - NOT. Seriously. I know even a small business that puts money in the bank every month. Interest earned? $0.01 per month. If 12 cents per year is helpful to you, that's what you do. CDs are a little better - but you can't touch them or get the money back out of them until the contract is over (anywhere from a few months to a few years).
Category: Personal Finance; 2010-09-05 10:34:40
3. What purpose do low interest rates serve?
Cui bono ? Whose good ? Low interest rates are good news for mortgage holders on variable rates. They are bad news for savers. They have not translated into any considerable increase in bank loans to firms with cash flow problems (the banks are understandably sniffy about taking risks) and relatively few firms are looking to borrow to invest. When bank loans are given, the interest rates are many, many times higher than bank rate - as are the rates charged by credit card companies. To the extent that the economy is recovering, this seems to be due to restocking and to cheaper exports in the wake of the low value of the GB £. Enlightenment please ! Antura Das : Thanks, but I acknowledged the point about mortgage holders. They are only one element in a much bigger economic picture, however. Where do low interest rates fit benefically into that larger picture ? But I appreciate your contribution. Jonathan : Thanks. Neither quantitative easing nor the related low interest rates policy has radically improved the economy, so that it's steaming ahead with a healthy GDP increase. From this viewpoint, low interest rates haven't worked. Whether things would be worse without them is hard to say; we'd have to increase interest rates to find out. A thoughtful answer, though, and appreciated. A lvmi follower : Yes, I know my von Mises & Hayek, much underrated thinkers. You write about the need for 'capital formation and accumulation in that savers will be encouraged once again to put their money in the bank with the reward of higher rates of interest so the banks can then lend out money backed by production to lend to businesses'. The low interest rates policy is plainly, I can agree, not having this effect. SDD : But the current low level of interest rates is purely artificial. It has been fixed by government. Presumably it has been fixed for a purpose. I was asking what that purpose was - and, obviously by implication, what good that purpose was actually serving.
Answer: Yes low interest rates do allow for cheaper mortgage rates and loans to business but they do have a very dark side as well. In a capitalist economy, the rate of interest is determined by consumer preferences in the rate of savings of holding money today(demand deposits) and holding money for the future (time deposits). The federal reserve system we have today is a system that sets the rate of interest arbitrarily by the chairman and his governors based on the rate of increase of money prices due to the increase in the money supply that they created by their own previous actions. Now being a regulated fractional reserve banking system where member banks are allowed to lend out 10 times the amount on deposit is another cause for the low rate of interest and where the beginning of the boom ensues and will eventually lead to destruction and disaster. The cheap money encourages businesses, homeowners and even students to embark on projects or schooling (dot com bubble I.T.industry) to invest in ultimately poor unsustainable investments such as construction projects that are profitable at the lower rates as opposed to a higher rate of interest or for homeowners to buy larger houses at cheaper rates that can't afford when interest rates rise. (recent housing bubble). This also misallocates labour from the consumer intensive industries to the capital intensive industries. So as this process continues over time the rate of interest begins to rise and the inevitable bust starts to unravel and we get the results we have today malinvestments without the money to fund the projects anymore. Pursuance of these policies ultimately leads to capital consumption, poverty and higher unemployment rates over the longer term. .What we need today to get the economy going again is capital formation and accumulation in that savers will be encouraged once again to put their money in the bank with the reward of higher rates of interest so the banks can then lend out money backed by production to lend to businesses and have a greater possibility to be sustainable for the long term and not created out of thin air through federal reserve counterfeiting practices. Unfortunately, the10% fractional reserve banking system allows each dollar in demand deposits to grow by a factor of 10 which allows people who receive the money first to obtain products at lower prices at the expense of those who receive the money last and are forced to pay higher prices. The printing of dollars just dilutes the value of every dollar currently held over time, robs us all through higher prices and taxation and distorts the economy. It's amazing when one starts to think about this problem when you start realizing that 90% of money lent is created out of thin air through counterfeit federal reserve notes. What a scam!!
Category: Economics; 2010-09-05 08:16:48
4. How do I get a personal loan with bad credit?
I want to buy an engagement ring soon for my g/f. My credit score is between 580-590. With one score at 630 from Transunion.
Answer: Save your money and buy a ring. Why take out a loan for an engagement ring? What are you going to use to pay for a wedding. Buy a ring you can afford and come up with a creative free method to propose. Then plan your wedding on a budget.
Category: Credit; 2010-09-02 19:06:23
5. Stressing out about car loan application?
My partner applied for a car loan for a new car ($24990) yesterday (Wed) and is yet to hear back. Is this a good/bad/indifferent sign? He has a perfect credit history, a long history of stable employment with a reputable national institution and he's putting the new car up as collatoral against the loan. The only downside is that he owes some money on a couple of credit cards. Would a car loan application be knocked back for that?? I'd really appreciate advice with this as it's fairly stressful waiting to hear back. Thanks in advance.
Answer: He only applied on Wednesday give it some time. Banks etc like to take their time when assessing credit applications, it isn't an instant process. Owing money on credit cards shouldn't impact the application too much. If your partner has a good credit history and stable employment and can prove he can meet the repayments then he will be fine. Chase them up if you haven't heard anything by early next week.
Category: Buying & Selling; 2010-09-02 02:45:59
6. If a car loan has one name on it; but the title has 2. Can a dealership still repo it?
I helped a family member get a car that had bad credit. The car deal is only in my name. Yet; he was still able to put his name on the title. Looking like this (my name and/or his name). He can't make the car payments. I don't want to make the car payments. So I told them I wanted a voluntary repo. Now since his name is on the title; he is claiming they legally can't repo it. I think he's mistaken. What's the real story?
Answer: Doesn't matter who's on the title. The lien on the title shows that the lender owns the car, not either of you. The car under that particular VIN number was placed on the loan. That car belongs to the lender until it is paid in full. They can come get the car. Is your credit already shot? If so, it's about to get much worse. If the lender shows you as the owner (again, doesn't matter who's on the title, it's who is on the loan papers), they will come after you for the balance of the loan after the car's auctioned off. If you cannot pay or settle that amount, they'll take you to court. So, you'll have a repo AND a judgment on your credit. A voluntary repo carries the same penalties as the one involving tow trucks at 3AM. "Now since his name is on the title; he is claiming they legally can't repo it." -- Wrong. They can come get it no matter what name is on the title. Since he registered the vehicle in his name (and I assume insured it as well), the lender could have come to get it anyway, as that's a violation of the loan contract. It's called a "straw purchase". If YOU and only you are on the loan, then the car is to remain in your name, insured in your name, etc.
Category: Buying & Selling; 2010-09-01 18:58:22
