Question:

Answer: Technically a debt is owed until it is paid and a debt collector can continue collection efforts.

The debt collector is well aware the debt is time-barred but may be trying to revive the debt by: (1) Getting you to acknowledge you owe the debt or (2) Getting you to pay any amount or even a promise to pay in order to revive the debt.

In January 2012, Asset Acceptance LLC, one of the nation’s largest debt collection firms, agreed to pay a $2.5-million civil penalty to settle a Federal Trade Commission lawsuit for misrepresentations in dealing with consumers, including failing to disclose when a debt was too old to be legally collected.

Asset Acceptance also agreed to tell consumers whose debt may be too old to be legally enforceable that it will not sue to collect on that debt.

It is good that you are aware the debt is time-barred as many consumers are unaware and fall right into the trap of “reviving” the debt.

What to do when a debt collector contacts you about a time-barred debt?

The law allows collectors to contact you about time-barred debts; however, it is not likely they will divulge that the debt is time-barred and they cannot sue if you don’t pay the debt.

But the Fair Debt Collection Practices Act, Section 805 – Communication in connection with debt collection, allows consumers to request no communication with a debt collector.

(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector
shall not communicate further with the consumer with respect to such debt, except—
(1) to advise the consumer that the debt collector’s further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor
may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt.

Send a certified, return receipt letter to the collection agency informing them to cease and desist communication (written and telephonic) with you. Once you receive the return receipt you have proof of when the collection agency received the cease and desist letter.

Should contact continue contact your state’s attorney general to make a complaint; that usually takes care of the issue.

I would also advise you to regularly monitor your credit to make sure no entries pertaining to the old debt show up on your credit report. In case it does pop up on your credit report, a letter directly to the credit reporting agency stating the FRCA Compliance date has passed and the account can no longer appear on your credit report should take care of it. Good luck to you.

More articles you may like:

1. Can a collection agency assess a monthly finance charge?
2. Can a third-party collect a debt for a collection agency?
3. Should the words cease and desist be used when dealing with a collection agency?
4. Various ways a collection agency will respond to debt validation request

I received a letter in the mail that my largest debt was purchased by a collection agency and that I need to call them to pay or make arrangements, so I did, but now that I’ve done more research I feel that might have been a mistake. I’ve read that I should have contacted the original creditors first, then if needed the collection agency and via writing first, not phone, offered a lump sum not get on a payment plan, asked them to validate the debt and some other stuff, mostly though that I should have gotten everything in writing.

It’s safe to say that I am worried and confused. Here is what I discussed and agreed to via phone with the agency … $400 down payment on the 24th of this month, then $100 every month after starting in March. They reduced the debt from $2800 to $2500 and there would be no interest if I made payments by checking account; didn’t give that information, instead of money orders.

I guess I’m wondering what I should do now, is it too late to ask that the debt be validated since I already acknowledged it when I called, or to ask for the terms we agreed to over the phone be sent to me in a written statement before I make my down payment.

Can I renegotiate all together to offer a lump sum and have the debt be considered paid in full? How do I know the agency will tell the original creditors that I paid the debt so that it gets fixed on my credit report? I’m a little lost and still have my other two debts to tackle, but I’d like to handle them with a little more knowledge to get the best result, so any information would be appreciated.

Answer: You have asked several questions and I will address what I believe may give you some insight as you choose what steps to take:

Debt Validation. You can request debt validation any time but there is no law requiring a debt collector to honor your validation request after the debt collector has sent you a debt validation notice within five (5) days of their first communication with you. If the first communication to you was a letter it may have included the debt validation notice. Read “What is Debt Validation” to get an idea of how the process works.

Agreement to Pay. I am not an attorney and I suggest you seek legal advice; however, I do not believe you have a binding agreement with the debt collector. By your own admission, you did not get anything in writing so you have nothing spelling out the terms or to force you to keep the agreement with them. If you decide not to honor the agreement, they do not have anything in writing to enforce the terms.

But keep in mind that if the debt is within the statute of limitations, they could file a debt collection lawsuit against you. Alternatively, if the statute of limitations has passed, you may have re-started it just by acknowledging you owe the debt.

Negotiate a Settlement. If you are sure you want to pay the debt collector you should negotiate a settlement. Debt collectors pay pennies on the dollar when they purchase a debt. There is no reason to pay the full amount. Read “How to Settle Debts with Collection Agencies.” This should give you some insight on where to start settlement negotiations.

Debt on your credit report. Paying a debt to a collection agency in no way affects the listing of the original creditor. If there is a charge-off from the original creditor, it can remain on your credit reports for up to 7.5 years even though they sold the account to a debt collector.

When you have a charged off debt: (1) The original creditor places a negative mark on your credit report; and (2) The debt may be sold or transferred to a debt collector and in turn, the debt collector places a negative mark on your credit report also.

Pay for Delete. Some collection agencies will delete the negative mark in exchange for payment. You will have to request a pay for delete and it must be done in writing. But a pay for delete does not remove the original creditor’s negative notation on your credit report, it only deletes the collection agency negative notation. Read more about pay for deletes regarding collection entries.

Deal with original creditor. The only way to have the original debt noted as “paid” is to deal directly with the original creditor. If you can get the original creditor to pull back the debt from the collection agency and pay them directly, the collection agency will no longer be in the picture. If you convince the original creditor to remove the charge-off from your credit report in exchange for payment, the collection agency would have no basis to report a negative mark on your credit reports.

You want to negotiate a pay for delete agreement as a deletion would be better for your credit score. If the original creditor does not agree to delete the negative listing request a less negative rating such as “account closed”, “account settled” or “paid” instead of the charge-off status.

Request to speak with someone, like a manager, who has the authority to remove the charge-off from your credit reports because speaking with just a representative answering the phone may not result in the desired results.

Whatever agreement you are able to negotiate, get everything in writing before you make any payments. Good luck to you.

More articles you may like:

1. Can you request debt validation after a debt collector filed a lawsuit?
2. Debt Collector refuses to remove unvalidated debt from credit report
3. Debt Collector Served Summons in Response to Debt Validation
4. Can a debt collector send you an email?

Experian

The major credit reporting agencies not only store massive amounts of often erroneous, inaccurate information about your credit habits; they also gather and sell your personal credit information to potential banks, lenders, credit card companies, insurance companies, landlords and even employers.

Your private credit information is sold to telemarketers, marketing and mailing list companies. It is a sure bet that all three major credit reporting agencies has sold and profited off your private credit information.

Six Reasons to Opt Out

1. Mortgage Loan Marketing Lists. One of the most popular marketing lists credit reporting agencies sell are of those which contain information about consumers shopping for a mortgage loan. As soon as an inquiry from a mortgage company hits your credit reports, your information is packaged and sold to junk debt buyers and collection agencies.

(Now do you realize how that old debt ended up on your final escrow documents?) Anyone getting a mortgage knows that before your loan is funded, the lender will require you to pay off collection debts.

2. Unpaid Debts. If you have outstanding unpaid debts you may want to stay invisible to the credit reporting agencies until those debts are either paid or become uncollectible due to Statute of Limitations.

Junk debt buying has become a billion dollar industry full of violations, fraud and deceit. The debt buying industry continues to grow and often the debts they are collecting are erroneous and uncollectible by law.

3. Trigger Leads. The credit reporting agencies make money in several ways, one of them includes selling your private credit information. Your credit files are regularly sold, often without your knowledge or permission.

They also engage in “trigger leads.” A trigger lead occurs when you apply for a loan and the lender obtains your credit files. The inquiry now becomes part of the credit bureau’s trigger lead program.

4. Unshared Profits. Credit reporting agencies should not be able to profit from selling your information. You are entitled to one free report every 12 months. That report does not come with your credit score, that is an extra fee. Yet, the credit bureaus profit daily off of your information by packaging and selling it. It’s an unfair system and until more restraints are put on the credit reporting agencies, you need to opt out and take control of your credit information.

5.  Permission Not Granted. Do you recall opting in? When did you give permission for your information to be sold on the open market and you not get any portion of the profit? If you have bad credit you are especially valuable to the credit reporting agencies.

Credit card companies and other lenders will offer you credit but it will be at ridiculous interest rates. When you dispute an error on your credit report, there is little incentive for correcting mistakes.  Bad credit is a lucrative business for banks and lenders.

6. Take Control. When you opt out you prevent your credit information  from appearing on the credit bureaus’ marketing lists. They cannot include your name on any marketing list or sell your credit history information.

To opt out today go to www.optoutprescreen.com or call (888) 5-OPTOUT or (888) 567-8688 . By opting out online your information will not be sold for 5 years. If you prefer to permanently opt out you will have to put your request in writing.

More articles you may like:

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2. How to Dispute Duplicate Collection Accounts on Credit Reports
3. Understanding your credit reports
4. How the Fair Credit Reporting Act (FCRA) helps consumers

The lender will advance the borrower loan funds and the borrower will write a personal check drawn on their bank account for the amount of the loan, plus the fees. Your check will be automatically deposited at a later date, usually 2 to 4 weeks from the date of the loan or your next pay date. Some lenders will allow you to extend repayment of the loan for an additional fee.

Loan Amounts
A Payday loan may be from $100 to $1,500, it varies from state to state. The tremendous growth of payday loans has caused many states to regulate the industry. Specific laws now regulate the payday loan industry.

These laws define permissible lending terms and rates and some states even regulate the amount a payday lender can lend and how much they can charge for the loan. Other states have totally banned payday lending. Some lenders have gotten around the laws by partnering with banks based in other states, such as Delaware.

How does it work
Let’s say you need to borrow $255.00. You will write a post-dated check in the amount of $300.00 made payable to the lender. This amount includes the finance fee. The lender will advance you $255.00 for a typical term of 14 days. When that term is expired, the lender will deposit the $300.00 post-dated check into your account and the loan will be repaid.

The lender may offer the borrower an extension if you cannot repay the loan in full but additional fees will be added to the original amount of the loan. It is not cheap. If at all possible, get a payroll advance directly from your bank. The fees are usually a lot cheaper.

Loan Qualifications
Most payday lenders require you to have a verifiable form of income such as employment, social security benefits or retirement benefits. You will also need a bank account, in good standing, along with copies of your most recent bank statement. Some may even require you to have direct deposit.

No credit check is required. However, most payday lenders run your social security number through a consumer reporting agency called Teletrack. Teletrack gathers records from businesses across the country who cater to non-traditional credit consumers, they keep records of past and present payday loans, among other types of information.

They are a consumer reporting agency and subject to the same FCRA Rules as the major credit reporting agencies. You are entitled to a free report if you have been denied based upon information contained your report. Many States limit the number of payday loans you can have at one time. Teletrack will give payday lenders information on your borrowing habits.

Fees and Terms
The fees are expensive, there is no getting around this fact. Annual Percentage Rates are typically around 400%. A loan of $200 for two weeks will cost you approximately $35.00. The average payday loan is fourteen (14) days; however, in some instances it may be as long as thirty (30) days if you are paid on a monthly basis.

The Pros
Payday loans are quick and easy to get if you do not have other options. It may come in handy during times of emergency. They can be attractive to borrowers who have less than perfect credit and cannot qualify for bank loans. Payday loans can be useful for unexpected expenses such as car repair or medical bill. It is not a supplement to your regular income. Borrowers who do not have access to credit card cash advances or savings accounts may find payday loans a benefit. But these loans should be used sparingly and only in case of emergencies.

The Cons
It is imperative that the payday loan be repaid as soon as possible, without any extensions. If you cannot pay the loan on time you will be subject to even more fees. The annual percentage rate (APR) on a payday loan averages about 400%. If you are living paycheck-to-paycheck, as many consumers are, you may get stuck in a cycle of getting payday loans. Avoid this cycle and use a payday loan only in the case of extreme emergency. Get up to $550 Next Business Day!

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One late payment can result in credit scores decreasing by as much as 80 points. Read “How Late Payments Affect Credit Scores” for more information.

Some creditors will delete late payment notations if you have been a good customer for several years and are not typically late paying. A creditor may also remove a late payment if you can show a hardship or other good reason for being late. There is no guarantee a goodwill letter will result in the removal of a late payment but it is well worth trying.

A goodwill letter should always be sent to a company executive, such as the CEO, Vice President or Director, this can often lead to a positive outcome. You may have to do a little research to find the names and addresses of officers of the company. A good resource may be Hoovers.com. Always send the letter certified return receipt.

The below sample should give you an idea of what direction to take with your goodwill letter.

(Sample Letter)

Date

Your Name
Your Address
Your City, State Zip

Executive Name
Creditor’s Name
Creditor’s Address
Creditor’s City, State & Zip Code

Re: Account Number

Dear (Name of Executive):

I have been a good customer with your company since (year). I enjoy doing business with your company and have been pleased over the years. I am writing to request a “goodwill” adjustment be made to the above-mentioned account with the three major credit reporting agencies.

Although I made a late payment(s) on (date), I have an excellent payment history otherwise. My monthly payments are always on time. Please consider removing the negative payment reported by your company from my credit reports. That was a temporary oversight and it has not occurred since that time. The late payments I am requesting deleted and/or removed occurred on (date).

These late payments do not reflect my overall good payment history with your company and I would like them removed. I experienced a temporary loss of income due to (whatever). Again, I really enjoy doing business with your company and hope to continue a satisfying relationship in the future. I hope that you would take into consideration my loyalty to your company and work with me to remove these negative marks from my credit reports.

I look forward to hearing from you soon.

Sincerely,

(Signature)

Your Name

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That collateral could be your savings account, certificate of deposits, stocks, bonds, automobile, jewelry, equity in your home and any other valuable asset.

You can get a secured personal loan even with bad credit; however, the real benefit in secured loans is that your credit rating will increase with timely payments. Think of bad credit as a temporary situation and your ultimate goal is excellent credit. Secured credit can move you towards that goal in a short period of time.

Types of Secured Credit

Secured Bank Loans
Most banks and credit unions offer savings secured loan. The borrower must have a savings account with the bank and a portion of the money in this account is used as collateral to secure a loan. The loan equals the amount pledged to secure the loan.

The money in the savings account is then frozen in the account but it will continue to earn interest. As the loan is repaid the secured portion of the savings account is freed up for use or continued savings. This is a very low risk loan for a bank or credit union so the interest rates should be very low on this type of loan.

Benefits of Secured Bank Loans
The major benefit of a secured loan is that payments are reported to the major credit bureaus and has the same advantages of a regular loan being reported to the credit bureaus.

Your credit report will improve and your credit scores will increase. Secured credit is a great way to get on the rebuilding road of credit. A great strategy to further improve credit through secured loans is to piggyback more than one secured loan. Learn more about piggyback secured loans.

Secured Credit Cards
A secured credit card works much like a secured bank loan. Your credit limit is determined by the amount equal to the deposit you make. Make sure the card reports to all three major credit bureaus and the application fee and interest rates are reasonable. Get a card that will convert to a regular credit card after a series of on-time payments. The Applied Bank(R) Secured Visa(R) Gold Credit Card has no annual fee or account set up fees, you can choose your credit limit from $200 to $5,000 and there is monthly credit bureau reporting.

Auto Title Loans
Auto title loan companies will advance you a loan based upon the ownership of your vehicle. No credit check is required. These companies will put a lien on your vehicle and retain your title (ownership documents) until the loan is repaid. You must own your vehicle free and clear and the vehicle must be in good condition.

The loan amount varies depending on the age, type and condition of the vehicle. You retain the vehicle and are able to use it during the term of the loan. If you default on the loan, the vehicle will be repossessed and sold for the defaulted amount. These are short term, very expensive secured loans. Interest rates could be as much as 25% for a 30-day term loan.

Pawn Shops Loans
Pawn shops will make small, short-term loans based upon the value of personal property such as jewelry, electronics, small appliances and even musical instruments. The pawn shop will appraise your property and give you a small loan based upon their appraised value.

The loan term can be from 30 days to 6 months. If you do not pick up the property the pawn shop may allow you to pay interest on the loan while they retain your personal property. The fees are generally high and the property will be sold if you do not claim it by the end of the loan term.

More articles you may like:

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4. Secured Credit Business Loans

Small firms with fewer than 500 employees represent 99.9 percent of the total (employers and non-employers), as the most recent data show there were 18,469 large businesses in 2008.

Home-based businesses are part of the numbers. America thrives on entrepreneurship and with the current unemployment rate, starting your own home-based business may the only option for employment. It is always a good idea to do something you like as you will be spending time growing any new business. Here are some ideas for a home-based business:

Answering Service
Do you enjoy talking on the phone? Why not get paid for it. Customers have become frustrated with automated answering systems and many companies are switching back to the old way of doing business, a live person answering the phones. The opportunities in this business are varied as a company may require services during and after office hours and you can contract with several companies.

Bridal Consultant
Today’s bride does not merely want a wedding, she wants an experience. However, many brides hold down full-time jobs and don’t have the hours to put into planning a wedding. Do you like organizing, negotiating, planning and creating…not to mention high stress? Then the bridal consultant business may be perfect for you.

As a bridal consultant you will assist a bride in every aspect of wedding planning, including but not limited to, scouting locations, wedding attire, food & entertainment, decorations, flowers, invitations, you name it, you will probably have to perform it.

Child Care
The need for child care facilities is growing as job and income growth continues. More and more families have both parents working and someone has to watch the kids. Child care facilities offer supervision, care and education for pre-school aged children and school-aged children ranging from 6 weeks up to 16 years. A passion for teaching and nurturing children is highly recommended as this profession is very demanding.

Computer Consultant
Every type of company will require IT help at some point in time. If you have a thorough understanding of computer systems, excellent analytical and problem solving skills and enjoy helping people then you may want to consider computer consulting.

Cosmetic Sales – Avon or Mary Kaye
The cosmetic industry is a multi-billion dollar industry. Get your piece of the pie. Avon and Mary Kaye are well established industry leaders that have a good business model in place for its representatives. If make-up and skin care floats your boat, then this industry make work well for you.

Delivery and Messenger Service
Almost anyone can use a delivery service these days. You do not have to limit yourself to working for businesses. Personal delivery services are a growing trend as people just do not have the time to spend in traffic running errands. You may want to find a niche in what kinds of items you want to deliver. Whether it’s furniture, documents, or even pets.

Event Planning
Whether it’s a super sweet sixteen party, corporate event, private soriee or political rally, the event planning business has grown to a over a 500 billion industry. An eye for detail, lots of creativity, strong organizational and management skills and excellent people skills is all you need. This profession can be fun and rewarding.

Handyman
Has anyone ever called you “Mr. Fix-It” or “Ms. Fix-It” or, do you just think of yourself in this manner? If so, the handyman business may be for you. There are so many prospects for clients, you will be very busy. Start simple by posting fliers at your local grocery stores, advertise in your local newspapers, look-up the neighborhood realtors, drop by the senior citizen housing complexes, the possibilities are endless.

Hauling Service
With the advent of cable shows like Clean House and Clean Sweep it has become increasingly popular to get rid of clutter. But getting rid of the clutter is only half the job, once all the precious keepsakes, family heirlooms, college furniture and other various clutter has been cleared, what are you going to do with it? A hauling service is perfect for those who don’t mind a little physical labor. You you may also find that valuable treasure in the midst of another person’s trash. All you’ll need is a vehicle capable of carry almost anything.

Interior Decorator
Are you passionate about color swatches, mixing and matching patterns, determining functionality of a space, feng sui techniques and working with people? The interior decorator business may be waiting for you. As a decorator you are not required to have the formal accredited education and certification as do interior designers.

Jewelry and Accessories Design
Creativity is the key to this business. The opportunities abound for custom jewelry and accessories design. A huge market exists for your custom made necklaces, earrings, bracelets and even belt buckles. Holiday bizarres, cultural fairs, arts and crafts shows, conferences, museums and even neighborhood farmers market are venues to exhibit your designs.

Limousine Service
Limousine service is no longer for celebrities, elected officials or corporate executives. Consumers are hiring limousine services for weddings, proms, anniversaries, birthday parties, bachelor parties, divorce parties, and any other special night out. With good customer service and excellent driving skills your phone will be ringing off the hook.

Massage Therapist
Are you good with your hands? Perhaps massage therapy is right for you. Certification can take as little as 9 months. This profession affords several career options. You can work independently for several types of clinics such as sports medicine, orthopedic, chiropractic, naturopathic and pain management. Travel to your clients’ home or office. You can even work on cruise ships. The possibilities are endless.

Medical Billing
As the health care industry expands, the need for medical billers also expands. Medical billers are responsible for collecting, analyzing and processing patient information for payment. The main duty of medical billers is to ensure medical facilities and physicians receive payment for services rendered. Much of the medical billing services are outsourced so a home business is perfect for this profession.

Medical Transcription
The demand never ends for qualified medical transcribers. Doctors, hospitals, chiropractors and even veterinarians often outsource the transcribing of patient medical records. This is an excellent home-based business with endless possibilities for clients.

Mobile Carwash
Look around you, it seems as though every American owns a car. Those cars need to be washed and not everyone has the time nor desire to pull out the water hose and bucket. Traditional car washes still hold a monopoly but there is an increasing need for mobile carwash businesses. Office buildings, apartment and condo complexes and small companies with fleets of delivery vehicles are a good place to start promoting this type of business.

Mobile Catering
Love to cook? Even better, love to cook for others? In today’s time crunched society working families need a good home cooked meal without the hassle. A mobile catering service can be just the answer. Start by giving out sample meals. Create simple menus and go from there. You can target specific neighborhoods and even pass out samples and menus at the local parks while the soccer moms and dads are cheering on the kids.

Mobile Hair Salon
Ever been sitting under a dryer, magazine in one hand, bottled water in the other, with a frown on your face? Let’s be honest, most women like getting their hair styled by a professional but do not necessarily enjoy the time spent in salons. Th mobile hair salon is a growing industry as women and men are willing to pay extra for convenience.

Notary Public
A notary public has several options for working. A traveling notary service can make a very good income. Notaries are needed for all sorts of reasons. They officially witness signatures on legal documents, administer oaths and statutory declarations, collect sworn statements and authenticate documents. Everyone, at some point in time, needs a notary so the possibilities for clients are endless.

Personal Services – Shopping & Errands
Sometimes there’s just not enough hours in the day to take care of home and work. Most people have to perform their duties on the job and often times the duties at home fall by the wayside. Errands, shopping, bill paying need to be accomplished. A person who enjoys keeping others organized may be ripe for the personal services business. No longer are executives the only people who require personal services, middle and working class families can also use a personal service business. Start by advertising your services to corporations.

Real Estate Appraiser
Real Estate Appraisers estimate the value of real property which includes land, buildings and natural resources. The work is interesting yet tedious. Appraisers prepare a written description properties and estimate the value. They may also examine income records, verify legal descriptions of property, draw diagrams and note conditions and special features of buildings. Appraisers generally work alone and find opportunities with state and local government, banks, credit unions, utility, insurance and mortgage companies.

Restaurant Delivery
Restaurant delivery service is a great up and coming business. Many smaller restaurants do not have the man power to offer deliveries. That’s where you come in. You can contract with several restaurants and get the benefits of a set fee from your clients along with tips for their customers!

Secretarial Service – Typing, Transcription & Proofreading
Virtual secretaries can offer a myriad of services and target various professional fields. If you are a multi-tasker with accurate, fast typing skills you may be interested in offering your services to the Business, Legal and Medical fields. There are also opportunities in bookkeeping, typing manuscripts, resumes, cover letters, request for proposals, business plans and the list goes on.

Tutoring
Math, reading, grammar, history, science…what’s your speciality? If you find teaching a rewarding experience tutoring could be the key to your successful home-based business. With the competition heating up to get a spot in the top colleges and universities, parents are looking for ways to give their children an edge. Advertising is fairly inexpensive. Post flyers in your local schools, libraries, grocery stores and even laundromats.

Weight Loss Coach
Unfortunately obesity is on the rise in the United States. Fortunately many businesses have arisen from the obesity crisis. Just like personal trainers weight loss coaches have carved a niche in the fitness industry. A certified weight loss coach can work right from home with weekly coaching sessions, nutrition advice and work-out plans all through email. The rewards from this business are immeasurable as you help others improve their health, lifestyle and self-confidence.

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The housing crisis threw a wrench into the mortgage lending industry. Banks and lenders scrutinize even the best credit applicants.

Before the housing crisis home-buyers with bad credit could simply seek assistance from a subprime mortgage lender. Now, many subprime mortgage lenders have gone out of business.

Here are several tips to get approved for mortgage loan with bad credit:

1. Get your credit score first
It is imperative to pull your own credit scores before you approach a lender. Knowing your credit scores will allow you to correct issues that may be keeping them low. Lenders will pull your credit scores from the three major credit bureaus and more than likely go with your middle credit score. Get free credit scores from Experian, TransUnion and Equifax. While the credit scores you pull may not be the same as the ones the lender pulls they should be fairly close.

2. Improve Your Approval Chances
Pay your monthly obligations, even utility bills on time. Making regular, timely payments is a quick way to rebuild your credit scores and show you manage credit well. Make sure you have a major credit card reporting monthly on your credit reports. If you have bad credit and are unable to get a major credit card try the Orchard Bank Mastercard or Visa, the qualification criteria is easier and they report to the three major credit bureaus.

3. Show Steady Employment and Income
Lenders like to see a steady income. You should be on the job 2 or more years. If you are self-employed you must be able to show good financial statements for 2 or more years.

4. Bank Statements
Whether you earn a salary, are a wage earner or self-employed be prepared to provide bank statements showing regular deposits and savings. Some lenders may require up to 12 months of bank statements.

5. Save a down payment
A low credit score will matter less the higher your down payment. At least a 10% down payment may be required for most loans, unless you go FHA. But the more you can put towards a down payment for instance 20% or even 25%, lenders will view you as a smaller risk. It’s all about the level of risk a lender must take on; the lower the risk, the better chance of getting approved.

6. Down Payment Assistance Programs
There are down payment assistance programs in every state. This could be a great option if you are in the income qualifying range. Check-out some down payment assistance programs in your state.

7. Manage Debt
Avoid late payments, continue to pay your bills on time and avoid charging over 30% of your available credit limit on your accounts. Lower balances on your credit accounts compared to the amount of credit you have available will not only improve your credit score, it will show lenders you management debt well.

8. Get quotes from multiple lenders
When seeking a mortgage loan you must shop around to get the best rate. The credit scoring model makes allowances for consumers shopping for a mortgage. The FICO scoring model will not penalize you for having multiple mortgage loan inquiries if they are done within a 14-day time-span. The newer versions of the FICO scoring model count the shopping period as any 45-day span, unfortunately not many lenders are using the newer version.

9. Consider using a mortgage broker
Mortgage brokers often have access to many lenders and programs that can help you obtain a bad credit mortgage loan. The key is finding a reputable broker with good references. Don’t be afraid to request references and never hesitate to research a mortgage broker through your State’s Licensing Board (Usually the Department of Real Estate). If using a mortgage broker, be prepared to pay a commission but remember that fees and commissions are negotiable.

10. Rapid Re-score your Credit Files
Rapid Re-score is a service offered by a lender or mortgage broker in which your credit scores can be re-analyzed and quickly corrected for the purposes of a mortgage loan. Rapid Re-score accelerates the dispute process, corrects negative information and increases your credit score immediately. This is an invaluable service as one error could potentially make the difference in whether or not you can obtain a mortgage loan. Find out more about Rapid Rescore.

More articles you may like:

1. Mortgage loan assistance programs drop credit scores
2. Tips for writing a loan modification hardship letter
3. Tips for first time homebuyers
4. Balloon Payment Mortgage Loans

Recently, I have received notice that a former landlord is claiming that I owe them $813 for a lot of nonsensical claims.  That includes owing them a month’s rent, totally untrue, owing them for carpet cleaning, though they routinely have all carpets cleaned whenever a tenant moves out, and even “prorate paint,” which apparently means that if paint is supposed to last 10 years, I owe them for 3 years of that.

They included $100 for maid service, though a housecleaner can be obtained for half of that, plus “trash removal,” which would be the same thing as maid service.  All trash removed could be carried in one hand.  They reported “roaches,” though roaches come from inside the walls and other apartments, and I had always cooperated with extermination.

They reported a broken window and two missing light globes.  These things were not the case when I left, though they waited weeks before cleaning the apartment.  They have one maintenance man to do the work of three, and maintenance involves extreme delay time.

They report an August 10 move out date, though I moved out on July 31, a Sunday.  They may have waited ten days before looking in the apartment, but I had given them notice 30 days before move-out.  In fact, if I’m not there, I’m gone, and they could see that all of my belongings were gone, if they had simply looked.

Because the landlord is referred to as the “original creditor,” I suspect they may have sold thedebt.  However, if this is so, the collection agency has employed an attorney, whose office is engaging in ordinary collection activity, making them a third party.

I am wondering what recourse I have; including the possibility that a third party might not be able to participate in collection activity.

Answer: I am not an attorney and cannot advise you on debt collection laws in Oklahoma. I suggest you seek advice from an attorney, in Oklahoma, regarding landlord tenant laws as well as Oklahoma’s laws governing debt collection.

The only suggestion I can make is to request debt validation from the attorney. That should get the ball rolling on what proof they have showing you owe the debt.

As far the “third-party” issue, again, I am not familiar with Oklahoma debt collection laws; however, a debt collector can hire an attorney to collect a debt. In turn, that attorney is subject to the same laws which govern debt collectors, namely, the Fair Debt Collection Practices Act. The below section of the FDCPA covers attorneys for debt collectors:

§ 805. Communication in connection with debt collection 15 USC 1692c

(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the ex­press permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post judgment judicial remedy, a debt collector may not communicate, in connec­tion with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

The debt collector has not violated the FDCPA by communicating with their attorney. Good luck to you.

More articles you may like:

1. Can the original creditor and collection agency attempt to collect on the same account?
2. Can a collection agency assess a monthly finance charge?
3. Collection agency did not validate but verified debt with credit bureaus
4. How to stop a collection agency from contacting you

Answer: You can only request the original creditor note the account paid in full or settled if you deal directly with them. A pay for delete with the collection agency ONLY deletes the collection account. It does not affect the original creditor’s notation of the account.

The longer a charge-off has been on your credit reports, the less negative effect it has on your credit score. But, if a debt buyer comes along and purchases the debt, and subsequently places the collection account on your credit report, this can have a devastating effect on your credit score. Thus, a pay for delete, with the debt collector may be in order. It still has nothing to do with the original creditor’s charge-off notation.

On the other hand, if you are successful in getting a charge-off notation changed to paid or settled by the original creditor, the debt collector can no longer report the collection account on your credit reports.

Therefore, if you want the original credit account noted as paid or settled, you must negotiate with them, not the debt collector. The article “How to get a charge-off removed” gives some strategies to deal directly with the original creditor.

As far as how much a pay for delete will increase your credit score; even in theory it would be difficult to calculate. Your credit score is calculated by many factors including the following:

• Payment History
• Amount borrowed compared to available credit
• Length of Credit History
• Hard Inquiries and New Debt
• Credit Mix

You can read more about what makes up your credit score in the article “Demystifying Credit Scores” where the 5 components are explained.

What I can offer are what actual consumers who have been successful in pay for deletes have reported about an increase in credit scores. I have read from 30 up to a 55 point increase!

For consumers looking for a boost in credit scores to qualify for better interest rates, even a 30 point boost can do the job. A pay for delete may be well worth the money. The best of luck to you.

More articles you may like:

1. Will asking a debt collector for a pay for delete change the 7-year credit reporting date
2. Who should get a Pay for Deletion Offer, the Collection Agency or Original Creditor?
3. Should Pay for Delete Agreements be signed by the Collection Agency
4. Can a charge-off have a past-due amount?