How to Negotiate a Repossession or a Charge Off Off a Credit Report

Options are extremely limited for removing repossessions or charge offs from credit reports. The Fair Credit Reporting Act maintains that the information must remain on credit reports until it expires in seven years. However, one legal loophole exists that allows early removal. Many people try removing repossessions and charge offs from their credit reports because they are very damaging to credit. A vehicle repossession can make it impossible to finance another car without a large down payment and sky-high interest rate. Charge offs make it hard to gain any credit at competitive rates. A charge off is a credit account that a person stopping paying, causing a default.

Instructions

1

Contact the creditor or debt collector that placed the repossession on your credit report. Offer to pay a lump sum payment for any balance remaining after the repossession -- in exchange for the debt collector deleting the information from your credit report -- a process called "pay for delete."

2

Contact the debt collector again the following month if he turns down your proposal. A debt collector or creditor does have the right to delete certain information from your credit report, but some will not participate in pay-for-delete arrangements because of ethical reasons. However, continuing to ask won't hurt anything.

3

Contact credit card companies with the same strategy for removing charge offs. Offer to pay the full amount remaining on a charge off in exchange for removal of the information from your credit report. Keep trying each month until you have a deal.

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Negative Effects of a Poor Credit Score

If you're spending more than you make and charging it all to your credit cards, it's easy to get in financial trouble. You may have difficulty making your minimum monthly payments or you may miss a payment altogether, which can cause your credit score to plummet. The way you use your credit also can lower your credit rating. Having a poor credit score has negative consequences in many aspects of your life, some of which may surprise you.

Higher Interest Rates

The lower your FICO score, the higher the interest rate you may be charged by your credit card company or bank. A score below 600 indicates a higher credit risk to most lenders; they will charge you much higher rates or will turn down your application outright. Higher interest rates can translate to thousands of dollars in added interest you wouldn't have had to pay if your credit score was higher.

Difficulty Getting a Job

Most employers use background checks that include a credit report, and you could be turned down for a position based on your credit score even if you're a suitable candidate for an open position otherwise. A poor credit score gives a prospective employer reason to believe that you might mismanage your finances, might not be a responsible citizen or might be so overwhelmed in debt that you are unable to concentrate on your daily duties. Employers also have anecdotal reasons for concern about the risk of theft or embezzlement from employees in financial trouble.

Difficulty Renting or Getting Utilities in Your Name

Without a good credit score, an apartment lease agent may deny you a rental contract. Poor credit may be an indicator that you will not pay your rent in a timely manner. Utility companies, including gas, electric and cable TV may require a large deposit from you in order to turn your utilities on if your credit score is low.

Insurance Premiums Can Rise

If you are shopping around for auto or property insurance, insurance companies evaluate your credit report, legally weighing your financial health to set premiums. According to the Fair Credit Reporting Act (FCRA), insurance companies may look at your credit report without your consent to decide whether or not to issue or renew a policy, and what premium to charge you for your insurance.

How to Boost a Poor Credit Score

The FICO score is the most widely used method of scoring your credit. FICO scores range from 300 to 850, with the average consumer falling in the 600 to 700 range. You can boost your scores by always paying your bills on time, applying for credit infrequently and not maxing out your credit cards. The length of your credit history is important, too; the longer you pay on time on any given account, the better your score.

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How to Do a Balance Transfer

Anyone who's carrying a balance on a high-interest credit card can benefit from a balance transfer. If you qualify for a transfer, it's likely you'll receive several offers. But while it is relatively easy to do a balance transfer, realizing the benefits requires discipline. If not done carefully, a balance transfer will only delay or worsen the negative consequences of having too much debt.

Instructions

1

Read offers carefully. Before applying for and completing a balance transfer, read all offers completely and carefully. Usually the lowest interest rate is what you're looking for, but you'll also need to be aware of fees or conditions. Make sure the offered rate is guaranteed, not dependent on your credit score, and be clear on the duration of any introductory or so-called "teaser rates."

2

Submit your application. Most balance transfer offers can be completed online, but paper mail-in applications are available as well. Unless the transfer is to an existing line of credit, the application will include the kinds of questions that appear on any request for new credit, such as employment and income. Additionally, the application will need the amount of the balance to be transferred, the name of the creditor and the account number.

3

Continue payments. Until you've received confirmation of the balance transfer, continue making at least minimum payments on the old line of credit. If the transfer does not cover the entire balance, paying off this high-interest debt completely should be your first priority. Once it's paid off, avoid carrying a balance month to month on the old card.

4

Don't use the new card. When a line of credit includes debt that accrues interest at different rates, all payments are counted toward the lowest rate debt. This means that charges to your new credit card can't be paid off until the entire balance transfer is paid off. And, in the meantime, they'll be piling up debt at a much higher interest rate.

5

Pay off the transfer in time. The best use of a balance transfer is to pay off the balance in full before the end of the special rate period. The best offers are for 0 percent interest for a year or more. At the end of this time, the interest can be retroactively added from the date of the transfer.

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How to Request a Credit Report From Equifax

Your credit score can affect your employment, apartment search and all loans. The Fair Credit Reporting Act requires all three credit agencies---TransUnion, Equifax and Experian---to offer free credit reports to American consumers. These free reports, however, can be retrieved from one online source: Annual Credit Report.

Instructions

1

Log on to Annual Credit Report (listed under Resources below). You will need your name, address, Social Security number, phone number, previous addresses (five-year history) and email address. You can elect to purchase a FICO score, too, if you'd like. A FICO score is a number between 300 and 850 that represents overall creditworthiness.

2

Choose Equifax from the list of credit bureaus after you create your account online. You can also get a free copy from TransUnion and Experian.

3

Review the security questions. These may be quite challenging. Most of the questions will be quite specific. The questions are designed for your protection. You may need to know your last payment amounts, balances, dates you opened accounts on, names of creditors and when accounts were paid off.

4

Review your answers to the security questions. Just one wrong answer could trigger the electronic locking mechanism on the website. If your account is locked, you will need to call Equifax to verify your identity. Click "submit" if you are satisfied with your answers.

5

Decide between online viewing or a PDF document. Both copies of the report will show all current and past accounts, public records (judgments), inquiries and demographic information. If you purchased a FICO score, it will be listed at the top of the report.

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How to Get Out of Debt Legitimately

Paying off debt is frustrating. Oftentimes, when you start making progress, an unexpected expense will land you in the red again. According to the Federal Trade Commission (FTC), if you struggle with debt management, you aren't alone. Getting out of debt takes time. There isn't a quick fix that makes debt disappear overnight. However, creating a long-term plan to pay off debt can help.

Instructions

1

Take inventory of your debt obligations. Gather recent credit card statements and make a list of all debt obligations. The total might be shocking, but it's important to have a grand total for debt obligations.

2

Create a repayment plan. Don't get overwhelmed by the large number. List all debt obligations, from the highest interest to the lowest. Circle the highest-interest debt. This will be the first debt that you focus on repaying. Make minimum payments on all other bills. Focus solely on the highest-interest debt until it's paid off. Then, focus on the next-highest interest rate.

3

Find extra funds to pay down debt. Small purchases add up over time. Make a list of daily unnecessary expenses. Cutting out a daily latt purchase could free up $100 or more each month. Putting this money toward debt will help you pay the debt off quicker. Also, consider riding the bus to work or carpooling to save on transportation costs.

4

Make an action plan for behavioral changes. Brainstorm how you got into debt. For some people, it's impulse purchases. For others, it's expensive housing or other rising costs. Create an action plan to change behaviors. For example, if you struggle with impulse purchases, freeze your credit cards. If you really want to use the cards, you'll have to wait for them to thaw. This will prevent overspending in the future.

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Washington State Credit Collection Law

The Federal Trade Commission is responsible for administering the Fair Debt Collections Practices Act, a federal consumer protection law governing credit agencies and lending institutions. States can enact their own consumer protection laws providing additional rights and protections to their residents. In Washington, the Washington State Legislature enacted Chapter 19.16 of the Revised Code of Washington governing credit and collection agencies.

Washington Law

Since the federal Fair Debt Collection Practices Act governs debt collection procedures used by credit collection agencies hired to collect debts for other companies, the Washington Legislature enacted additional state laws governing prohibited collection procedures used by agencies collecting their own debts. The Washington State Office of the Attorney General is responsible for administering the state's collection laws and investigating consumer complaints.

Prohibited Contacts

The Washington state law prohibits collection agencies from contacting consumers more than three times in one week, and they may only contact consumers at work once per week. They may not contact consumers between 9 p.m. and 8 a.m. The collection agency must disclose its address, name and debt information during its first contact or attempt. The agency must provide a written disclosure of the nature of the debt, interest and collection fees and provide notification to consumers of how to contest debt information. Debt collection agencies are not allowed to use intimidation, harassment or embarrassment during their collection efforts. Furthermore, they cannot threaten criminal prosecution, use offensive language or threaten physical violence.

Consumers' Rights

Consumers have a right to demand the agency to stop contacting them by sending written demand or cease and desist letters. Consumers represented by attorneys have rights against further contact by collection agencies, and collection agencies can only contact their attorneys. Credit agencies are allowed to contact unrepresented debtors and their acquaintances to find an address or place of employment of the debtor. They may not disclose the fact that the debtor owes money to their acquaintances or any other third parties. Collection agencies cannot require consumers to pay their debts using post-dated checks. According to federal law, a consumer who writes a post-dated check written post-dated for at least five days must be given written notice before the agency can deposit the check.

Collection Agency's Rights

A collection agency has a legal right to assess interest, late fees and can demand full debt repayment. The agency has no legal obligation to accept less than full repayment of its debt and can report debtors to local credit bureaus. However, if a consumer files a written dispute letter, the consumer's letter must be incorporated into its report to the credit reporting bureau. Consumer credit agencies can charge reasonable attorneys' fees, legal fees and credit report fees if consumers are contractually liable to pay them.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.

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My Credit Score Dropped After Settling an Account

Your credit score can take a plunge after you settle an account for a variety of reasons. How many points you lose can depend on the age and the type of debt. Settling on a mortgage debt such as a foreclosure will hurt your score far more than settling on a small medical bill, even if the debts were incurred at the same time. While settling is generally considered to be a good idea, doing it at the right time will minimize the damage to your credit score.

About Settlement

When you settle a debt, you come to an agreement with a creditor. The creditor agrees to accept a lesser payment than is due, and you agree to pay a lump sum. Depending on the type of debt, you could settle an account with a credit card, car company, mortgage lender or collector. While settling a debt can put an end to collections efforts, it can affect your credit rating.

Account Re-Aging

The older a credit account is, the less it affects your credit score. If you have a credit account several years old in collections, late or charged off, it is likely not hurting your score much. Old accounts drop off your credit report in seven years, so the closer the debt is to the seven-year mark, the less likely it will hurt your score. Making a payment of any type, including a settlement, will reset the clock, making this a new collection account, and possibly damaging your score. Proceed with caution if you are planning to settle an old debt.

Settlement Reporting

The way a settlement is reported can affect your score. If it is simply removed from your credit report, you should see an increase in your credit score, not a deficit. If the account is listed as in collections, it can hurt your score, even if you pay it. If it is listed as a settled collection, it still counts as a collection and has a potentially negative effect. If your credit report shows you settled and paid a lesser amount, that can negatively affect your score as well.

Fixing your Score

Two things can be done to fix your score. Simply allowing time to pass will ease the impact the settlement has on your score. Beyond this, contact the debt agency or creditor and ask them to remove the account from your report. Unless you have negotiated it before paying, the collections agency is not required to remove the debt listing, but it won't hurt to ask.

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