How to Delete Credit Information

If you have negative information on your credit report, it is hurting your credit score. A low credit score can keep you from getting a credit card or a loan, an insurance policy or phone contract. It may even keep you from landing your dream job. There isn't much you can do to remove negative credit report information before it expires, unless it's a mistake.

Instructions

1

Check your credit report regularly to make sure that there are no errors. You can get a copy of your report for free from www.annualcreditreport.com.

2

Alert the credit bureaus immediately if you find a mistake. You can do this by filling in a form on their websites. (See Resources.) The bureaus will investigate the dispute and make a ruling within 30 days. If your claim is upheld, the erroneous information will be removed.

3

Contact the lender directly if it fails to report a settled debt as "paid off." Lenders are required by law to report accurate information to the bureaus. If you've paid off a debt but your report says you haven't, the lender must correct the inaccuracy.

4

Contact the credit bureau if the lender refuses to comply. You'll have to prove that you have settled the debt. A canceled check is the best form of documentation. A letter from the lender saying that the debt has been paid is also good. Once the bureau has the proof, it will remove the outdated information.

5

Contact the credit bureau if the negative information on your credit report is more than seven years old. Most credit information expires after seven years and should not be on the report. An exception is a Chapter 7 bankruptcy, which stays on your report for 10 years.

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How Long Will My Bank Account Be Frozen From a Civil Judgment?

If you default on your debt, your creditors may sue you. If you don't show up in court, your creditor wins a default judgment and may take legal action against you such as garnishing your wages or freezing your bank account. If your bank account is frozen, you won't be able to access your funds. Your creditor can freeze your account for up to the amount of the judgment. If you have enough funds in the account to cover the judgment, the freeze lasts 21 days after the court orders it.

Repayment of Debt

If a creditor freezes your bank account, the account remains frozen until you repay the debt is completely. Usually, the bank must freeze an account for 21 days and then release the funds to your creditor. If this settles your debt, your bank account will be unfrozen after this point. If you don't settle, then the amount that is left remains frozen -- if you put funds into the bank account, the creditor can seize those funds as well.

Prohibition of Freezing

Creditors cannot freeze your bank account at all if you use it only to hold certain funds that are exempt from freezing. Social Security benefits, veteran benefits, disability benefits, child support and alimony, workers' compensation funds and public assistance funds are completely exempt from freezing. If you have other funds in the account, however, your creditor may still freeze your account in accordance with the 21-day rule.

Required Notices

Your creditor does not need to inform you before freezing your bank account. However, you must first receive a notice that your creditor has filed a lawsuit against you and that your creditor has won a judgment against you. If you do not receive any such notices and a creditor freezes your account, contact your attorney. A creditor cannot legally freeze an account without providing these notices.

What to Do

If your bank account has been frozen, you can go to court to ask a judge to vacate the judgment. You do not need an attorney to vacate a judgment; however, you may wish to consult one about your options or retain one to help you negotiate with your creditors. In many cases, you can settle out of court and the creditor will drop the freeze on your bank account. You can get a judgment vacated if you can provide a reasonable excuse for not going to court the first time and proof that the debt is not yours. You can also get it vacated if you were not given proper notices regarding the lawsuit.

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How to Prevent Identity Theft on Credit Applications

Individuals seeking to steal another person's identity use various methods to acquire their victim's personal information. Using credit applications and applying for accounts is one tactic of identity theft. But fortunately, you can protect yourself and stop identity theft on credit applications. Knowing how to protect yourself and you information wards off a host of problems such as a lowered credit score.

Instructions

1

Opt out of pre-screened credit card offers. Credit card companies will pre-screen and send out pre-approved credit card applications to qualified applicants. Stop these unsolicited mailings and reduce the risk of credit applications ending up in the wrong hands. Call 888-5-OPTOUT or opt out online at optoutprescreen.com.

2

Check your credit report for fraud. Start a routine of checking your credit profile for signs of fraud. Annual Credit Report recommends yearly check-ups, and its website offers a free credit report each year from each credit bureau, in accordance with the Fair and Accurate Credit Transactions Act.

3

Get automatic alerts. Use a credit report monitoring service to catch identity theft early. Automatic e-mail alerts arrive if someone submits a credit application in your name.

4

Switch to a post office box. Street mailboxes increase the risk of identity theft on credit applications because it's easy for someone to take a pre-approved credit card application. If you choose not to stop these offers, remove mail from outside boxes as soon as it arrives, or have mail delivered to a post office box.

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Help With Credit Questions

When you fall behind on your bill payments and start getting "past due" notices in the mail and constant calls from creditors, it can feel as if there's no way out of your debt problems. Fortunately, you can find help. With specific knowledge and a willingness to swallow your pride and seek help, you can get your finances, and your life, back on track.

What Is a Credit Report, and Why Does It Matter?

Every consumer who has ever used any form of credit, such as a car loan or credit card, has a credit report. These reports are created by the three main consumer credit-reporting agencies: TransUnion, Experian and Equifax. These reports play a key role when creditors determine if you should receive a loan. You can look at your credit reports every year without charge by visiting AnnualCreditReport.com and requesting your three reports.

Can I Remove Information From My Credit Report?

Although you can change mistakes and have errors removed from your credit reports, you can't have correct information removed unless it stays on the report for longer than the legally allowable time period, which is either seven or 10 years. The Federal Trade Commission states that it's illegal to remove timely and accurate data from a credit report; any company offering such services is typically a scam. Further, there's no fee involved for either claiming information is incorrect or having the credit reporting agency perform an investigation.

Can a Credit Repair Company Help Improve My Credit?

There are a number of companies and individuals offering credit repair services. Although these companies can help you repair your credit or negotiate debt settlements with your creditors, they often end up charging their clients more than they can afford and end up leaving consumers worse off than before. The Federal Trade Commission states that any time you deal with a credit repair organization, demand to see a written contract detailing their services and fees.

What If I Need Professional Help?

With all of the questionable services offered to people with bad credit, it can be difficult for you to find a reputable organization. Personal finance author Liz Pulliam Weston recommends finding a credit counseling organization affiliated with the National Foundation for Credit Counseling. You can also speak to a bankruptcy attorney for advice. Although bankruptcy isn't a pleasant option, it's a viable one for certain consumers who have few remaining choices.

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Information on Using Credit Wisely

Credit is beneficial because it allows you to pursue your long-term goals such as homeownership and college education. But if you handle credit poorly, it could hinder your financial stability. This is why it's important for you to know how to handle credit wisely.

Borrow What You Can Afford

Whether you're applying for a credit card or a personal loan, it is wise to borrow only what you're able to pay back because once you sign the agreement, you enter a legal contract to pay the money back. For example, if you're looking for a home, you should consider a home that falls within your income level.

Spend Within Your Means

When using your credit card, your income should exceed the amount you charge on the card because late monthly payments can negatively affect your credit report. For example, if your check is $400.00 this week but you charged $450.00 the previous week, you will have trouble paying the card balance because your check was used to pay other bills. If your go a few more weeks without paying the balance, it could show up on your credit report.

Use Alternatives To Credit

When possible, try to use cash, checks or your debit card for small purchases rather than your credit card because these purchases add up on your bill. For example, when buying groceries you should consider using cash or a check to buy the groceries.

Pay More Than Minimum Balance

If your credit card bill has a huge balance, then you should pay more than the minimum balance if possible. When you pay only the minimum balance each month, it takes longer to reduce the debt you owe, and you could be paying mainly the interest that accrues on the card rather than the actual balance.

Considerations

While credit is useful for many things in life, we shouldn't depend on credit to sustain us financially. One way to build a good financial stability is to have six months' worth of emergency savings to help us when job losses or health crises come.

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Can a Judgment Creditor Put a Lien on a Trust?

When a creditor obtains a judgment against you, he may be able to garnish your wages, remove money from your bank account or put liens on your property. Some individuals place their assets in trusts to protect them from creditors. However, depending on the type of trust, creditors may still have access to your assets.

Revocable vs. Irrevocable

When you create a trust, it can be either revocable or irrevocable. If you create a revocable trust, you can change its beneficiaries, trustee or assets at any time. However, if you create an irrevocable trust, you can't typically change any of the terms once the paperwork is complete. Property you include in a revocable trust is still part of your estate, while you are no longer the legal owner of property you place in an irrevocable trust.

Implications for Creditors

Because you maintain control over the assets you place in a revocable trust, creditors may be able to put a lien on them or seize them to repay your debts. However, you no longer own the assets you place in an irrevocable trust, so creditors can't typically put liens against them or garnish them even if they have a judgment against you.

Implications for Beneficiaries

Creditors can't put liens on an irrevocable trust for the trust creator's debts because the assets in the trust no longer belong to the creator. Creditors can't attach to the trust for a beneficiary's debt, either, because the assets in the trust don't belong to the beneficiary until the trustee distributes them. However, after a beneficiary receives a distribution from the trust, creditors may be able to garnish the distribution to satisfy the beneficiary's debts.

Considerations

Creditors can't typically attach to assets placed in offshore trusts, whether or not they are revocable. Though creditors can't usually place liens on assets in irrevocable trusts, if a creditor can prove that the creator of the trust formed it to avoid paying his debts, a judge may render the trust invalid and allow the creditor to put a lien on the assets under the Uniform Fraudulent Transfer Act.

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How to Find Legal Debt Settlements

If your debts far outweigh your monthly income, you are a strong candidate for debt settlement. A certified debt management credit counselor can review your financial records and create a custom debt settlement plan that works for your budget. Credit counselors can communicate with creditors on your behalf and guide you through the debt settlement process. Debt settlement is a legal agreement whereby a creditor accepts a lesser value for a debt.

Instructions

1

Notify creditors of your intention to seek credit protection under bankruptcy court law. Expressing an interest in bankruptcy protection may provide leverage during negotiations. Explain that you will seek credit counseling in the interim to pursue alternative options. Do not discuss debt settlement at this time.

2

Contact a certified debt management credit counselor. Credit counseling associations provide public resources such as a member directory and credit counselor locator tools.

3

Do your research. Before hiring a debt management credit counselor to settle bad debts, request the company's performance record. Avoid companies that boast a 100 percent settlement record. Such figures are rarely possible.

4

Sit down with the debt management credit counselor and evaluate the debt relief options that are available to you. Inquire if a settlement is the best option for reducing debts at the lowest cost.

5

Develop a personalized plan for settling your delinquent lines of credit. Provide your credit counselor with an itemized breakdown of your expenses, liabilities and debts, so you and your counselor can arrive at an affordable settlement offer.

6

Have your credit counselor request a settlement agreement in writing. Review the agreement with your credit counselor. Sign and date the agreement and then return. Make your lump sum settlement payment as agreed.

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