Brent’s Credit and Debt blog

It is a really helpless feeling.  When the collector calls, you feel angry, frustrated, and scared.  The calls seem to come in constantly!  All day, from 8:00 in the morning until 9:00 at night, the phone will ring.

I felt nervous every time I heard that ring tone.  Looking at the caller ID, it was an 800 number or an ‘Unknown ID’.  I knew who it was.  And I chose not to answer.

Finally, I got smart.  There is a law, Called the Fair Debt Collection Practices Act, or FDCPA, that regulates how debt collectors are allowed to contact you, including how often, where they can call, and what they can say.

If you are getting calls and want them to stop, you can do that easily.  Answer the phone.  I know, you don’t want to, but answer it.  Get the following information from the person you talk to:

• The collection company name.
• The mailing address of the collection agency.
• A supervisors name.
• The name of the person calling you.

Also, write down the time and date of the call, and anything you can recall being said.  You don’t need the peoples names, or the time and date, unless they don;t stop calling you.  In that case, if you pursue legal action for a violation of your rights, that information will be critical.

Write a letter to the collection agency.  In your letter, be nice but firm.  Have it say something like this:

To whom it may concern,

You are causing me undue stress by continuing to call me regarding a supposed debt.

Do not contact me by phone any longer at the following number:  (713) 555-2167.

If you wish to contact me, you may write me at the address you have on file.

If you continue to try to contact me by phone, I will be forced to take legal action under the FDCPA.

You have 5 business days to comply with this letter.

Sincerely,

Me

Now, a couple of key points.  It is a ‘supposed’ debt.  Never admit it is your debt.  They can use that to sue you.

If you aren’t allowed to be called at work, say so.

They can’t cause you to feel nervous, so tell them your calls are causing stress.

Send your letter certified mail, return receipt requested, and make sure it is there in at most 3 days.  That way they can set up their auto dialers to stop calling you.

Keep a copy of the letter, and your receipt from the mailing.  If they continue to call, contact your state’s attorney generals office.

I’d like to know, have you had problems with a collector continuing to call?  What do you think of collections in general?  Leave me a comment and let me know.

They are easy to hate, aren’t they?

They call you and demand money for something you couldn’t pay for in the first place.  They try to help you ‘find’ money by taking out additional loans, or by borrowing from family.  They want you to make payments.  They are even willing to waive the interest they charged you.

They are the few, the mean, the Debt Collectors!

But how could someone do this?  How could they spend their days trying to take your money?  Don’t they have a SOUL?

Well, I’ll tell you, I have worked with collectors.  I was working for a company that managed the debt that collectors go after.  I worked on the computer systems, and they hire only the best and brightest.

To the people working in the background, it is just another job.  They don’t talk to people with debt problems.  They only work on the computer system.

Collectors, though, have a pretty tough work life.  They spend all day on the phone, and 9 out of 10 calls aren’t answered.  Very few people call back.  And about half of the calls that connect have an irate person on the other end of the line who is sick of being harassed.

A really good collector will make a little over $20,000.00 per year.  They are mostly young: college students, people looking for a bit of extra income, or people who are having a tough time finding other work.

They don’t particularly like their jobs.  They hate being yelled at, and they hate trying to trick people into paying money they don;t have.  They have heard every hard case story in the book, they are lied to, and they are often ignored.

Are they mean?  Not really.  They just have a mean job.

Are the natural liars?  No, they are trained to manipulate.

Are they ethical?  Most are, but the ones that aren’t give the entire industry a bad…I mean worse name.

For the most part they are people struggling to get by just as we all are.  They really don’t deserve our hate.  They aren’t malicious, they are just trying to make a buck.  By stealing ours.

But I hate their calls anyway.

If you want to learn what NOT to say to a debt collector, download this article:

The Top 10 Questions a Debt Collector Might Ask You

When you have a credit card, there are times you may slip up and charge a bit too much.  You think ‘Well, it is just a couple of bucks.  I’ll make a payment and everything will be fine’.  But is it fine?  Really?

No, no, no!  Going over your limit is a serious ding on your credit scores!  By exceeding your limit, you may trigger an alert at your credit card company in which they start to evaluate your account for potential problems.  They might raise your credit rate, which costs you more money.  They could reduce your credit limit, which means you will be WAY over your limit.  They might charge you fees (in fact, most do), which can really add up fast.  Worst of all, they may report your account to the credit bureaus!

One little indiscretion like this shouldn’t make a difference, right?  Well, it does.  The way creditors view things, one little problem with one account may mean a bigger overall problem.  In fact, one late payment means you are much more likely to have more late payments in the next 90 days!  In the same vein, one problem with a credit limit typically means you will have more problems.

You can fix this.  If you are getting anywhere NEAR your limit, stop using your card.  Check your balance online on a regular basis and make sure you have room to buy the things you need.  And if you have a debit card, use it first!  Living on a cash basis will help you reduce your dependency on credit and start to live within your means.

When you are looking to rebuild your credit, you have to ask yourself a few questions:

• Have I solved the problems that gave me bad credit to begin with?

• Am I willing to make sure I don’t go down the wrong path again?

• Have I taken care of the debts I already incurred?

• What is my reason for wanting great credit scores?

I talk to a lot of people that are in the credit repair game for the wrong reason.  They are looking for MORE credit, a new car, a new house, or the ability to carry that shiny gold card.  However, they have yet to fix the problem that got them in trouble in the first place.

You need to take stock of your situation.  If you are using credit to extend your ability to spend, you will end up right back in the same bad place you were in before.

Credit was designed as a convenience for people who didn’t want to carry cash.  Later, it became an emergency measure in case something happened that you couldn’t cover with cash.  However, these days credit has become a luxury item.  We overspend, and comfort ourselves that we only have to make a small payment to cover what we buy.

Well, the truth is that those small payments add up.  Over time, small purchases here and there can force you into very large monthly payments that can actually destroy your financial position!

There are a group of people, referred to as the ‘FICO High Achievers’.  These are people with credit scores above an 800 (out of a possible 850).  It is a rarified goal, and one that very few ever achieve.  These people have access to loans, to better interest rates, to lower insurance scores, and generally don’t have the same kinds of credit problems that the rest of us have.  Why?  The use credit as a tool, instead of as a lifestyle enhancement.

I spoke to my banker.  He told me that the people that he serves that have the wealthiest appearance, such as big houses, luxury cars, and luxurious ‘stuff’ in their homes, are typically the farthest in debt.  They are using credit to support a lifestyle they can’t afford, and it catches them in the end.

At the same time he told me that people who learn how to manage their money when they are young are the most likely to be financially successful.  They live well, instead of extravagantly.  The spend money wisely, and use credit only when they are making a large purchase that cash won’t cover.  They don’t buy on impulse, and are less likely to have a 4 dollar coffee in their hands than they are a cup of coffee from the coffee maker on their desk.  These are the people that manage their money, and are more likely to be credit ‘High Achievers’.

You have to make a choice.  You can repair your credit, and go back to the lifestyle that caused the problems in the first place, or you can fix the problems and live better in the long run.

Whatever you choose, I wish you luck in living with credit!

I see a lot of ads for ’30 Day Credit Repair’ or ‘Credit Repair Fast’. The ads are on the radio, on the internet, and I wouldn’t be surprised if they show up in your mail box.

Can they really fix your credit in 30 days?

Well, the honest answer is yes, and no. (I know, the answer sucks, but it is real.)

You can make changes to your credit in 30 days. Things like aged accounts, old accounts without validation, and possibly even a few good will adjustments can be yours in a short time. Those items will absolutely help your scores.

However, there are things on your report that are tough to crack. Changing information, getting rid of collections, and trying to make bad items look better all take time. You have to be willing to do the work to make things as good as possible. If you try to take shortcuts, like hiring a law firm that specializes in credit repair, you will likely end up with a credit report that is clean, and has nothing useful on it at all.

A great credit report requires several things:

• A history of using credit responsibly.

• Maintaining lower balances on your credit cards.

• Making payments on time.

• A good mix of credit.

• Not trying to get credit too fast.

If you can achieve these things, you will have great credit.  It is more about understanding how to use credit as a part of your lifestyle than a ‘quick fix’.Credit repair takes diligence, time, and a consistent effort. If you put the effort in, you can improve your scores and have a credit report that will get you ahead in life, instead of leaving you where you are.

The most important thing you can do is start working on your credit today!

That’s it.  The Top 10 Ways to Protect Your Credit During Divorce.

Your life is already tough.  Going through a divorce is one of the hardest things you will ever do.  It touches every part of your life, and you need to protect yourself while going through it.

Remember, it is you taking care of yourself now.  You HAVE to stop thinking about things as a member of a couple, and start thinking about things as a single person again.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Conclusion video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 1, I am asking you to start managing your money.  This is critical!  You are starting fresh, and it is very easy right now to damage your credit.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 1 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 2, I discuss the danger in assigning your legal rights to someone else with a power of attorney.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 2 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 3, I discuss your financial picture during the divorce process.  If you aren’t awarded enough money to live on, you need to say something.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 3 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 4, I discuss how taking care of your financial obligations will help you to move ahead after your divorce. .

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 4 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.