In a recent study, credit cardholders in their 20s and 30s are carrying more debt than older credit cardholders. As if this wasn’t bad enough, they are also paying their debts more slowly than older cardholders.
How bankruptcy is going to be reported on one’s credit is a common question from clients who are thinking about filing for bankruptcy, or who have already filed. Many clients are concerned about the length of time that a bankruptcy shows up on their credit reports. However, just because your credit report reflects that you’ve filed for bankruptcy does not mean that you’ll be financially crippled and unable to obtain any new credit until the reporting period expires.
While credit cards can provide significant benefits for many consumers, having too many open credit accounts or large revolving balances can lead to serious financial problems, which include unaffordable monthly payments, declining credit scores, and higher interest rates. Data from Experian shows that the average consumer in the United States has three open credit cards.
Have you taken a look at your credit report lately? If not, you should. Statistics show that 79 percent of all credit reports contain at least one error, and as many as 25 percent of credit reports contain serious errors that could cause a person to be denied credit. Just like with your health, the key to preventing credit disasters is early detection. The sooner you find out there’s a potentially harmful error on your credit report, the sooner you can take steps to fix it and prevent things from getting worse.
The Fair Credit Reporting Act (or “FCRA” for short) is one of the handful of statutes that I deal with regularly in my capacity as a consumer defense attorney. The FCRA is a federal law that regulates how consumer credit information is collected, maintained, and used. The FCRA was drafted to ensure that Credit Reporting Agencies, (or “CRAs”) reflect accurate data about consumer credit, and provide adequate notice and information to consumers whose credit is affected by the information they collect and disseminate. Especially today, when credit is essential to staying adrift in this struggling economy, Americans should be fully aware of their rights under the FCRA
Of course you should be aware of your credit score, but not consumed by your credit report or score. Sure, if you have a credit score over 800 in today's economy, I say Good for You. But, at the same time, I am thinking: "Am I really getting the entire story here?"
As a consumer protection attorney, I speak with people all the time. Some people can't wait to tell you that they have perfect credit, and others look utterly defeated when they tell you their credit is in the toilet. Credit Scores are huge in today's society, and more importantly, we have been trained to wear our credit score as a badge of honor.
But what about those that are in need of credit repair?
Credit Scores are one of the greatest mysteries known to man. We all know that a good or great Credit Score will open up all kinds of financing opportunities at the lowest rates. We also know that a bad or low credit score will hurt us in the long run by costing us more money when we finance something.
What you may not know is that a credit score is a number that may be constantly changing on a month to month basis. The credit score is locked in at that one point in time when the report is prepared. The significance of a credit report is that it reflects the individuals credit worthiness at that one point in time.
I get asked this question quite often. The reason this question comes up is because the Debt Collectors threaten people by saying: "If you don't pay in 30 days, we are going to put it on your credit" or "We are going to put a charge off on your credit."
People get scared when they hear this because it goes right to the heart of their fears. I'm about to get psychological on you. I believe that people want to pay their debts, and when they cannot pay the bills as they come due, it weighs very heavily on their minds and crushes their self-image. So, here comes the debt collectors with their "piling on" mentality, just throwing out more insults and threats to scare the already beaten down individual.
Zombie Debt is a problem, there is no doubt about it. Many Dirt Bag Debt Collectors re-age Zombie Debt and put it on your credit reports. Obviously, this is a problem.
It's funny how people think about money. Each day I meet with people who are contemplating hiring our firm to represent their interests for personal injury, bankruptcy, foreclosure defense or short sales, and they ask tough questions like:
Are you looking out for my best interests?
Who will be working on my case?
How much will I be charged for the service?
Will you return my phone calls?
I wonder if they asked the tough questions to their credit card companies before selecting their cards. I know I didn't. But, what should we be asking these companies?