Dealing with Credit Problems

How to Deal with Your Debts
A sudden illness, the loss of your job or a divorce may make it impossible for you to pay your bills on time. Whatever your situation is, if you find that you cannot make your payments, contact your creditors immediately and explain your situation. If you have had on time payments in the past, most creditors will try to work out a modified payment plan with you that reduces your payments to a more manageable level. Do not wait until your account is turned over to a debt collector. At that point, the creditor has given up on you.

Automobile loans present their own unique problems. Most automobile financing agreements permit the creditor to repossess your car any time you default on your payments. No advance notice is required. If your car is repossessed you may have to pay the full balance due on the loan, as well as towing and storage costs, to get it back. Do not wait until you are in default. Try to solve the problem with your creditor once you realize you will not be able to meet your payments.
 
How to Improve a Bad Credit Report
You are entitled by law to correct any inaccurate information that appears in your credit report. If a creditor rejects your application because of negative information in your credit report, it must identify the credit bureau involved. There are three credit bureau agencies: Experian, Equifax®, and TransUnion®. At your request, the credit bureau must disclose the contents of your credit file. If you respond within 30 days of being turned down, there is no charge for this service.

Check your credit report annually for accuracy. You have the right, under the Fair Credit Reporting Act, to dispute the completeness or accuracy of any information in your report. When you do so, it helps to tell the credit bureau, in writing, why you think the information is not correct. Unless your dispute is frivolous or irrelevant, the credit bureau then must reinvestigate the matter. The credit bureau must correct any information that it finds is not reported accurately. Information that cannot be verified must be deleted. If you disagree with the results of the credit bureau's reinvestigation, you may file a brief dispute statement explaining your side of the story. At your request, the credit bureau will note your dispute in future credit bureau reports.

Be aware that when negative information in your report is accurate, only the passage of time can assure its removal. Credit bureaus are permitted by law to report bankruptcies for 10 years and other negative information for 7 years. There is nothing that you (or anyone else) can do to require a credit bureau to remove accurate information from your credit file until the reporting period has expired.

Don't be misled by ads aimed at people with bad credit histories, judgments, or bankruptcies. Promises to "repair" or "clean up" a bad credit history are empty promises.
 
Where to Find Help at a Low-Cost

If you need help in dealing with your debts, you may want to contact a Consumer Credit Counseling Service. Counselors will provide various resources to help solve your money problems. From starting a budget to educational programs on money management. They will discuss your entire financial situation and help you develop a personalized payment plan that is acceptable to you and your creditors. These services are offered at little or no charge to you.  

Here are two non-profit organizations that may be able to help:
NFCC  - 800.388.2227
FCAA – 866.694.7253

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