Category Archives: Credit Repair

Articles about repairing your credit, building good credit, and advancing up the credit ladder.

Posted on

Can a Charged-Off Credit Card Help Your Credit Score?

A not-too-unusual scenario for those trying to repair their credit

This happened to me, and I know it has happened to several clients of mine as well. Here’s the scenario:

You have a credit card account that was charged off a couple of years ago. You assume (correctly) that it is hurting your credit scores. After sending a few rounds of dispute letters to the credit bureaus (Experian, Equifax, and TransUnion–the “big 3”), you are unable to get it removed. During those months that you are working through the dispute letter process however, your credit scores see a big jump. What happened?

Posted on

Lessons from 5 Years of Credit Repair

One of my companies is getting ready to make a big push at expanding nationwide. In order to finance this, I will once again be applying for a business loan. Because of my efforts at credit repair over the past few years, I am now in the top tier of credit scores, and I expect to be approved easily at a low interest rate.

I thought I would take this opportunity to reflect on the past 5 years of credit repair for myself, my friends, and my clients. And really, when I say “credit repair,” I mean the entire process of climbing up the credit ladder from the worst possible situation (my scores were 500 at Experian, 463 at Equifax, and 466 at TransUnion), getting negative entries removed from my credit report, getting a credit card again, getting an installment loan, being diligent and disciplined about those loans, building positive credit, and eventually arriving at the top tier (760-850 range; any score in this range will get you the lowest interest rates).

I have succeeded at repairing my credit and climbing to the highest rung of the credit ladder, where I have the possibility of using my excellent credit to build my businesses and buy real estate, thereby growing lasting wealth for my family for years–even generations–to come.

I’ve also helped other people do the same. I’ve met with a lot of people at a financial low point in their lives. And while I’d like to say that every single one of them has followed my example and made a complete turnaround, that’s not the case. Some have listened to me and read about my system, but after experiencing an initial surge of inspiration and enthusiasm, fallen back into their old habits of missing payments, and soon it’s as if they had never even attempted credit repair. It’s like ballooning back up to your old weight after losing a few pounds on a crash diet.

So I’ve been reflecting back on the past 5 years with the goal of committing to paper exactly what separates the winners from the losers. Above all else, I’m convinced that it is a few character traits, and not any specific nitty-gritty tactic like how you word your dispute letters to the credit bureaus.

Here’s what I’ve learned:

Posted on

Running Out the Clock on Debt

If you have charge-offs or collection accounts on your credit report, you’ve probably heard that debts can no longer be collected after the statute of limitations expires. That’s true–sort of. The devil is in the details, though. So here are some important distinctions about running out the clock on old debt.

On a personal note, I have done this myself. I had a few charged-off credit cards that went into collections several years ago. Some lenders had sold the debt, and others had kept it and hired collection agencies to try and collect.

At this point, I was well into my credit repair journey, and I knew that if I could make it 4 yeas from the date of first delinquency (without getting sued or doing something to extend the statute of limitations–more on that later), I was home free. At the time though, 4 years (the statute of limitations in my state) sounded like forever.

Running out the clock should never be your Plan A. It’s more like Plan B, C, or D. But you need to be aware of the statute of limitations and some other important info no matter what your plans are. 

Posted on

Credit Bureaus Change the Way They Handle Disputes

Big news out of the New York Attorney General’s office. From CNN:

Experian (EXPGF), Equifax (EFX) and TransUnion, the three main agencies that track your credit, have agreed to follow new guidelines to handle disputes on your reports, according to a settlement announced Monday by the New York Attorney General.

This is huge news. Disputing information on credit reports is a big part of credit repair, and if you’ve ever gone through it, you know it can be frustrating to watch the credit bureaus acting in seemingly incomprehensible ways to simple requests like “this account isn’t mine; please delete it.”

It’s not clear at the moment how this will affect people in other states, if at all. The settlement could prompt action from other states’ attorneys general in a piecemeal fashion. The feds could even get involved in the form of the CFPB.

Posted on

Infographic: Which States Allow You to Record Phone Calls with Debt Collectors

Credit Repair Infographic: Recording Debt Collectors' Phone Calls by State

Click image for full size infographic

One of my Credit Commandments is to never talk to debt collectors. However, people are prone to ignore this commandment, especially if they’ve already crossed that bridge, and so the next Credit Commandment is to record your phone calls with debt collectors for your own protection.

Posted on

What’s Better than Predicting the Future?

Benjamin Graham was the most successful investor the world has ever known. Over the twenty-year period from 1936 to 1956, he achieved a 20% annual return on his stock investments (vs a 12.2% return for the market overall). Legendary investor Warren Buffett was one of Graham’s proteges, and called him the most influential figure in his life after his own father.

Don’t worry, this post isn’t about investing or the stock market. It’s about a principle that Benjamin Graham wrote about in his magnum opus The Intelligent Investor that can be applied to virtually every area of your life (but most especially your financial life).