What A Charge Off Means To Your Credit Report and Credit Score

Bad credit is no fun. When you check your credit report and find derogatory entries on your credit report listed as "charged off," you may wonder what this term means, and if you even have to repay these debts since the original creditor is no longer trying to collect from you.

Second question first: Yes, you still owe the debt.

First question: A charge off refers to a particular debt that a creditor has determined to be uncollectable, and has therefore written off the books. Generally this debt ultimately gets sold to a collection agency. They may buy the debt for pennies on the dollar and use every dirty trick in the book to shame you into paying up.

If a creditor hasn't received the payment you owe him after three months, the account is frequently charged off and sold. But sometimes the length of time taken before an account is charged off extends for much longer than three months, especially when it comes to medical debt.

And, as stated earlier, just because your credit report shows this debt as 'charged off' that fact does not relieve you of the legal responsibility to repay what you owe. Until the statue of limitations has run its course in the state you live in (sometimes in as little as five years), you will still be legally indebted to repay this debt.

This is why collection agencies are so quick to try and get you to confirm you owe the debt or get you to make even a token payment, as this reset the clock on your debt and the statute of limitations gets extended. You can learn more vital tips on how to fight collection agents trying to reage your debts.

Also, you may want to be aware of and avoid the 7 biggest lies told by collection agencies.

Status of Piggybacking For A Higher Credit Score

Piggybacking To Raise Your Credit Score -- Is It Still Legal?

We're updating this previous information we posted, about how the practice of "piggybacking" just might still be a way to improve a negative credit score:

FICO (Fair Isaac Corp.), which developed the widely-used FICO® credit scoring model, warned back in 2007 that it would end credit score piggybacking due to alleged abuses. The new scoring model labeled "FICO® 08" would put a stop to alleged abuses to the credit scoring system.

However, due to outcries from critics, the firm stepped back from the decision. Experts note that such a move would violate the Equal Credit Opportunity Act.

Some firms are still promoting and popularizing this method to boost a bad credit score.

"Piggybacking credit" refers to the practice of someone with a good credit score "renting out" their good score to someone else. Elsewhere, perhaps a parent or a spouse does the same thing to help a family member get better credit. Therefore, consumers who had no credit and people suffering from bad credit got a "credit boost" simply by being added to the accounts of credit cardholders who had legitimate good credit themselves. In effect they got to ride along 'piggyback' on the good credit account holder's account.

The website Boostmyscore.net details how this practice may still improve your credit score, though probably for a hefty price. (Note: we have NO affiliate relationship with this website; we merely link to it to give you an idea of the services available from them.)

More information on how an authorized user can get better credit is found in the forums here: http://www.fatwallet.com/forums

We're not certain it's worth the cost to piggyback onto someone else's credit, and it's definitely not ethical to do so if you're trying to hide poor credit from a lender, or worse, trying to scam the system in taking out a loan and destroying someone else's credit score in the process.

Bottomline, our opinion remains the same: Restoring good credit is a task you can do yourself, by yourself, without having to pay somebody else to do it for you.

How To Fix Your Credit Rating After Foreclosure

Foreclosure was indeed a frightening reality for millions of homeowners during the recent Great Recession. All these later, the aftermath is still being felt. Those who went through the gut-wrenching experience of foreclosure report that it takes quite a bit of time and effort on their part to correct their credit report after their foreclosure is completed.

It is common that banks are slow to investigate and correct charge offs in their credit report, and derogatory entries are allowed to keep appearing on credit reports -- until they are challenged.

You can improve your credit rating yourself. Write letters. Make the necessary phone calls. Don't quit. Track your credit repair progress. Remember to write down names and phone numbers and phone extensions of the customer service reps you speak with, and remember to never give up; you can fix bad credit.

Contact each of the 3 major credit bureaus in order, targeting the the single worst error on each credit report at a time.

You can find their address, phone number and website information here: http://www.findhow2.com/how-to-contact-credit-bureaus.html

Eventually, these homeowners report, credit history is corrected, and with the passage of time and better credit habits, their good credit is restored.

Their advice: watch your credit report closely after foreclosure. Never hesitate to dispute questionable negative entries that you believe to be incorrect. It seems that workers at these banks show little initiative to do their job with your best interest in mind, and remember, there is no incentive, nothing in it for them, to report correctly to your credit report. It's up to you to ensure that they do their job.

It won't cost you anything but some time, a little postage and aggravation to keep checking back with thse credit bureaus that you have successfully disputed with. Keep in mind that your old creditor might not yet have responded to your official dispute -- worse yet, since credit reporting is controlled by an automated reporting computerized system, the creditor might report it inaccurately all over again.

This is the importance of keeping all paperwork you have which states your old loan is in foreclosure. It's not a bad idea to give the credit bureaus a copy (never the original) with your dispute letter to buck up your claim and speed up the process of correcting your credit report.

More credit repair articles and e-books can be found at FindHow2.com.

Ways College Students Can Get Credit Back On Track

Fixing your credit is doable
If you find yourself with less-than-good credit, you are not alone. Business Insider, an online business news website, once reported that one in 50 households owes more than $20,000 in credit card debt. Coinciding with this alarming figure, the site further stated that more than 2 million Americans look to credit counselors each year to avoid bankruptcy.

Before your finances fall into the bankruptcy category, you can take steps to help turn your bad credit around. Just ask James Cheslek, dean of academic affairs at Brown Mackie College - Albuquerque. Cheslek is a retired corporate and trial law attorney who helps college students with bad credit get back on track.

"If you want to be successful, it is important to not let credit card debt get out of control," Cheslek says. "Many people get frustrated because their credit is not up to par. They don't realize how easy it is to fix. It may take some time, but it is doable."

Step one: Request a free copy of your credit report.
Every American is entitled to a free copy of their credit report under the Fair Credit Reporting Act (FCRA). Each of the three reporting agencies - Equifax, Experian, and TransUnion - is required to provide it once every 12 months, if you ask for it. To order your free copy, visit annualcreditreport.com, or call (877) 322-8228.

Step two: Read your credit report carefully for inaccuracies.
"Spend some time figuring out what all the symbols mean. Learn what's good and what's bad," Cheslek says. "Reporting companies get information from creditors. They simply take the information and add it to your report."

Step three: Dispute inaccuracies.
The FCRA further states that a reporting agency must correct any inaccuracies on your report. To dispute an item, notify the reporting agency of the inaccurate information. "They must investigate by forwarding your information to the company that provided the disputed item," says Cheslek. "When any information proves incorrect, the FCRA calls for all three reporting agencies to remove it from your credit report."

Step four: Request verification of debt.
The Fair Debt Collection Practices Act (FDCPA) gives consumers rights against debt collectors. "Here's the deal," Cheslek continues. "Debt collectors buy old debt for pennies on the dollar. They call and tell you they are collecting on behalf of another company. However, the company that originated the debt has written it off and retired the file."  

This may be the best kept secret in America. The FDCPA entitles you to write to the original company and ask for verification of the debt. They have 30 days to complete the process. Usually, they can't find the file or verify the amount," says Cheslek . "You may need to send follow-up letter to the credit reporting agencies to say, 'Take this off.'"

Step five: Once your credit is fixed, keep it fixed.
Cheslek offers the following rules of thumb to follow in the interest of keeping a good credit score:

* Pay bills on time. Late payments add fees to the balance owed.
* Change the payment due date if the current one is inconvenient.
* Pay more than the minimum due, even if just a little.
* Do not skip any payments. Skipped payments lead to bad credit.
* Do not close old accounts. Creditors look at how long you've had credit.
* Keep one account with no balance.
* Do not apply for loans you don't need. Every loan request shows on your credit report for two years; a denial becomes a negative mark.


EDITOR'S NOTE:

With 27 school locations in 15 states, the Brown Mackie College system of schools (www.brownmackie.edu) is dedicated to providing educational programs that prepare students for entry-level positions in a competitive, rapidly changing workplace. Brown Mackie College schools offer bachelor's degree, associate degree, certificate, and diploma programs in health sciences, business, information technology, legal studies and design technologies. See bmcprograms.info for program duration, tuition, fees, and other costs, median debt, federal salary data, alumni success and other important info.

Article courtesy of ARAContent.com

Credit Reports Can Be Disputed To Correct Credit History

Companies that consolidate information about your credit history are called Consumer Reporting Agencies (CRA's). The most common CRA is the credit bureau.
The information CRAs gather up about you and resell to creditors, employers, insurers, and other businesses is called a credit report. This report forms the basis of your credit score, which is so vital in providing lenders, employers and insurers a "financial snapshot" of your creditworthiness.
If you don't like the picture, then you must take action and learn how to correct credit report by writing and sending a credit report dispute letter to fix bad credit.
Once you are armed with the facts, you can begin the process of reviewing your credit reports and taking action to challenge inaccurate or outdated credit information contained in these credit reports.
Anyone can do this. Here is a free guide on how to do it yourself, correct your credit report and raise your credit score:
"How To Dispute Errors In Your Credit Report"

How To Make Yourself 'Identity Theft Proof'

Ways to fix your credit report BEFORE it gets damaged by identity theft:

The FBI has called it "The fastest growing crime in America." Close to 10 million Americans every year are victimized by it and the costs are estimated at 50 billion dollars annually. Many criminals get off easy while the victims spend years working to restore their damaged credit reports and reputations. Worse yet, there seems to be no end in sight. "The popularity of the crime is simply growing faster than the solutions to stop it" many experts conclude. The task of recovery is so time consuming and tedious, multiple states have resorted to creating "Identity Theft Passports" for victims in an attempt to ease the pain for them as they endure the lengthy and frustrating clean up process. Learn secrets of making yourself virtually identity theft proof in 60 minutes or less (for free).

Expert Author Terry Price shares the secrets in "How to Make Yourself Virtually Identity Theft Proof in 60 Minutes or Less"

U.S. Consumers Turn To Credit Cards Again to Cover Cash Crunch

Want proof that holiday season sales are not so much about the economy getting better, but, instead, about consumers opting for old ways to pay for their goodies?
Hey, who needs a good job or savings in the bank when you've got a shiny new credit card with a gib credit limit tempting you?
Bad credit habits are hard to break.

"Credit card use is on the rise"

Read it here at: http://money.cnn.com