If you are behind on bills, you might be getting notices that you are facing “Charge Off.” Do you know the difference between a Charge Off and a Collection?
“Charge Off” means that the institution that loaned you money is virtually “saying Uncle” and giving up on you ever paying the money back. They take it as a tax write off (loss) and move on. ”Cost of doing business…” Does that mean you’re off the hook? Nope.
Many people mistakenly think when a debt has been charged-off that it’s been cancelled by the creditor. This is not true. You are still responsible for paying off the debt. However, you will not be able to use your credit card to make purchases, because when a company “charges off” the debt you owe them – they are FOR SURE going to cancel that card!
An account is usually charged off after 180 days, or six months, of less-than-minimum payments. The charge-off will remain on your credit report for seven years from the date it was charged-off. If you pay the debt, it will be updated with a status of “Charged-Off Paid” or “Charged-Off Settled.” Either is better than a simple “charge-off” status, but are still undesirable.
Even though the creditor has acknowledged your debt as a loss in its financial records, you don’t get away free. Your creditor will add a negative entry (a charge-off) to your credit report and continue to attempt to collect on the debt.
Normally, the folks who loaned you money (creditor) will then turn the debt over to a Collection Agency… they will file a COLLECTION on your credit report. This means you will have a Charge-Off AND a Collection hurting your credit score for the same debt!
But WAIT… it can get WORSE! If you don’t respond to the Collection Agency, they can “sell” your collection to another agency who will try to collect it… and it will reflect as a NEW Collection!
The only way to remove a charge-off, or collection from your credit report is to wait the seven-year period (plus 180 days from the time it was reported to the Agency – so really 7.5 years) or negotiate with the creditor to have it removed after you pay the account in full.
If you are considering a mortgage loan to purchase or refinance, please contact Steve and Eleanor Thorne, First Financial Services, Inc Raleigh, NC 919-649-5058
Trying to improve your credit scores so you can purchase a home? One of the first things you can do is pay off credit card debt. If you have several accounts, which one are you going to pay off first?
Most people would tell you to pay off the account with the highest interest rate. “The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior.You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.”
See the idea is to get into a habit that you can continue. If you have other questions about paying off credit card debt (which really is one fo the fastest things you can do to raise scores) contact Steve and Eleanor Thorne, First Financial Services, 919-649-6068.
Working on your credit scores so you can purchase a home?
If you are not behind on payments, and you think you can manage the payments as they are (without closing accounts)… let’s talk about one of the most important things you can do to raise your credit score.
Take out your wallet… Look at the Credit Cards; and find the ones that have the name of a STORE on them (these are just examples):
Rooms To Go
Belks
Victoria Secret
Apple
Lowe’s
Sears
Pottery Barn
Radio Shack
Bank of America
Wells Fargo
CitiGroup
American Express
Capital One
Provident
American Airlines
So, when you have an extra $50, which ones do you pay down first? Well, our suggestion is that you pay OFF the first stack as fast as possible. Not just down to 50% balance versus Credit Limit… these are the ones you really ought to cut up and close. Do NOT use STORE credit cards if you can help it! It’s not worth the discount to defer payments on Rooms To Go if you care about your Credit Score! Listen to Dave Ramsey and buy the furniture when you can afford to pay cash!
With the other two stacks— work to get rid of the Capital One, Provident, “B” Tier cards as quickly as possible and cut that card up. You might not want to cancel the account, having the limit there is okay with a zero balance—but they are difficult to deal with and charge very Large Fees.
Once you have THOSE cards paid off, start working on the “Bank” credit cards. Pay each one down to at least a 50% balance. If you do this—you will have a GREAT credit scores! That’s the GOAL! Right?
If you have questions about buying a home, or want specific information about your credit – please call Steve and Eleanor Thorne, First Financial Services! 919-659-5058
Are you considering a Home Purchase??? Many of us realize that credit scores are the Holy Grail—the one thing you do not want to screw up… and if you have, it’s the one thing you want to figure out how to FIX… FAST!
We talk to people all the time who have been laid off, or had an accident, or got sick, or relocated and then hit hard times. The first thing you need to do is GET OVER IT! Get past the anger and the sleepless nights trying to juggle everything, and start making a plan.
All too often people could increase scores and save years of problems if they asked for help EARLIER. We recommend talking to a Consumer Credit Counseling Service (NON PROFIT) before you get behind on bills. They can get credit card rates lowered, past due and over limit fees dropped, and your total monthly payments managable. Once you’ve made 9 payments into these Services, you will probably see a positive difference in your Credit Score!
Again—you want to make sure to talk to NON-Profit Consumer Credit Counselors. They will typically keep only a very small fee for distributing the payments.
Are you trying to improve your score so you can purchase a home?? Contact Steve and Eleanor Thorne at First Financial Services, Cary, NC 919-649-5058
Every six months or so it’s important to take a peek at your credit report. Look for accuracies, and make sure no one else is using your credit! The Fair and Accurate Credit Transactions Act of 2003 (FACTA) made it possible to look at your credit for FREE from Equifax, TransUnion and Experian (the three main repositories).You can go to http://www.annualcreditreport.com or call 877.322.8228. If you use ANY OTHER service, you will get charged. So be careful if you are just “Googling” Free Credit report – you probably will end up on a page that requires a subscription.Also, know that getting your free credit report will NOT give you your credit score. If you are considering purchasing a home, you will want a credit score OVER 620.To get prequaified, please call Steve Thorne 919-649-5058
LifeLock is teaming up with H&R Block for tax season! For the month of February, those who enroll in LifeLock Identity Theft Protection Service receive H&R Block At Home Deluxe Edition (a $44.95 value) for free! Get more details about the identity guard promotion. Protect your identity now, so you can maintain good credit scores and avoid the need to access credit repair services.
Sign up for LifeLock® Service and get H&R Block At Home Deluxe Edition for free! (Offer valued at $44.95). Use code FEBRUARYTAX.
According to the latest Weekly Mortgage Applications Survey the number of home loan applications filed jumped 21% last week to the highest levels in six weeks as current mortgage rates stayed near 5%, Did you know that studies show that up to 70% of credit reports contain errors? In today’s economy, these inaccuracies can harm your credit score, cause you to pay higher interest rates and even put you at risk for identity theft. Bad credit mortgages continue to be difficult to find. Even hard money lending has disappeared.
Check your report today to spot errors and fix bad information so you can qualify for low mortgage rates that have reached record levels! You’ll also see your credit score which can change at any minute without warning. Banks are notorious for monitoring your credit score, waiting to hit you with incredibly high interest rates the second your score drops. Then you end up paying more in interest during times when interest rates are the lowest in decades! Remember, we offer a free credit repair evaluation.
Getting advice about credit scores and credit repair can be complex. Most reputable credit repair companies agree that there are no overnight credit fixes. Credit repair can be a time consuming process and it takes plenty of patience and determination. And the credit restoration company couldn’t be more right on when they say that the best way to take care of your credit is by being responsible.
Lexington is a law firm specializing in credit repair and they use their knowledge of the law and years of experience perfecting a proven formula to provide results while protecting your rights. They offer an account management system that is internet based. Lexington has provided service to over 100,000 clients across the United States. It’s easy to get started on the path to better credit. We have changed our services recently and now offer several new products. When you sign up for either of Veracity’s credit repair services, we will provide a free credit report and score.
Though credit availability is expected to pick up this year, it will be a slow improvement, according to a new report released by a group of senior bank economists. At the unveiling of their 2010 economic outlook, members of the American Bankers Association’s Economic Advisory Committee said consumer and business lending will recover when other economic factors also show more strength. Debt relief companies continue to look for better credit options for their clients. Bad credit debt consolidation loans have nearly disappeared as the subprime market challenges continue. “Consumers are still retrenching to some extent consolidating debts and small businesses as well are very conservative and reluctant to take on more debt at this point,” said Scott Anderson, a senior economist at Wells Fargo & Co., Mr. Anderson said he expects improvement, “but it’s just going to take some time for that to happen.”
The group predicted 3.1% growth in the gross domestic product. That would be an improvement of 3.4 %age points over 2009 but much more modest growth than the 6% that has followed previous recessions. “I refer to it or characterize it on my own as a ‘half-speed’ economic recovery,” said Stuart Hoffman, the committee’s chairman and the chief economist at PNC Financial Services. He referred to “constraining factors,” such as continued problems in commercial real estate and a lack of confidence in consumer spending, as holding back growth.
The First Amendment may the flashiest tool at the disposal of lawyers defending credit-rating agencies sued by angry investors, but sometimes a good old hammer gets the job done just as well. On Tuesday, Manhattan federal district court judge Lewis Kaplan dismissed a case against Moody’s and McGraw-Hill’s Standard & Poor simply because the ratings agencies didn’t have anything to do with the offering documents at issue. The litigation began in the summer of 2008 in New York state court. A purported class of investors in mortgage-backed securities underwritten by Lehman Brothers sued Lehman and several Lehman executives, including former CEO Dick Fuld.
The litigation was eventually removed to federal court. After Lehman entered bankruptcy, the plaintiffs amended their complaint to target the ratings agencies, alleging that they were underwriters and sellers of the securities. The amended complaint cited the Securities Act of 1933, which imposes strict liability for making false or misleading statements in securities offerings. But in their motions to dismiss, both Moody’s and S&P claimed that they weren’t responsible for the offering documents–an argument Judge Kaplan apparently found persuasive. “The judge has obviously agreed with the arguments that we made that the ratings agencies have never been held to be potential defendants under these provisions and it was a distortion of the statute to try to bring claims against the ratings agencies, said Moody’s counsel Joshua Rubins of Satterlee Stephens Burke & Burke, according to Reuters.
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Will the dismissal help the ratings agencies in two similar cases pending in Manhattan federal district court before Judge Jed Rakoff and Judge Harold Baer? “Hope so,” said S&P counsel Floyd Abrams of Cahill Gordon & Reindel, when we asked him. Lead plaintiffs counsel was Cohen Milstein Sellers & Toll. We e-mailed Steven Toll but didn’t hear back. Investors incensed over the good ratings the agencies gave to bad securities may have to pin their hopes on a case involving the collapse of a structured investment vehicle, which is being litigated before Manhattan federal district court judge Shira Scheindlin. As we reported last year, Judge Scheindlin allowed one of 11 common law fraud claims to proceed against S&P, which had hoped to be completely shielded by the First Amendment.
