5 Ways to Manage Your Payment History

Since your payment history affects 35% of your credit score, it is easily the most important part of your credit profile. It is also one that you can control. Clearly, the best way to achieve a high credit score and a positive credit report is to maintain a flawless record of full payments, made on-time, over the course of years.

However, for those people who live in the real world, things happen. It is easy to confuse dates, forget to mail a check, or come up short on funds. The important thing is to know what to do and how to manage those small mistakes, before they sink your credit entirely. Here are a few tips on how to manage your payment history:

1. Don't be late on your payments. EVER. There are plenty of tools you can use, like calendar applications for your computer or iPhone, on-line bill pay, or automatic paycheck deductions that can help you to maintain a spotless payment record. If you are habitually late, or have difficulty remembering to make payments, try setting up an automatic payment through your bank. You can even set up a separate checking account for these static payments, and have the appropriate amount of your paycheck automatically deposited there every month.

If you shy away from automation, or have cash flow issues, companies will often work with you to move your payments around. If you get paid at the end of each month, schedule your phone, cable and credit card bills to come due the first week of the month, when you have the most money in your account. Also, you can work to stay ahead of the payment curve by making your payments as soon as the statement becomes available, usually 30 days prior to the due date. That way, in case an emergency comes up or you miss a payment because you are out of town or short on funds, you have created a 30 day cushion.

2. If you are having a rough financial month and have to miss a payment, make payments on the largest accounts, like your mortgage first. Missing a $50 credit card payment will hurt you less in the long run than a $500 car payment.

3. If you have made the rare late payment on an account in the past, call and ask them to remove the late payment as a courtesy for being a loyal or long-term customer. Point out your history with the company and recent on-time payments, and ask them to consider the late payment as an exception to the rule. If they say no, call back and try to get a different representative on the phone. Lather, rinse and repeat.

4. Check your credit report for any accounts that are marked PAST DUE. These are the accounts that are doing the most damage to your account. When working your way through your financial payments, start here.

5. If you have collection accounts, pay off the most recent accounts first, starting with the largest. Any account older than 4 years can be moved to the bottom of the priority pile, since those creditors can no longer file a lawsuit against you to reclaim their money.

Protect Yourself from Credit Repair Scams

Every disaster seems to breed its share of con artists and scammers trying to make a buck off the misfortune of others. America’s financial meltdown is no exception. Shady outfits advertising fast, cheap credit repair on radio spots and late-night television ads are preying on Americans who are smothering in credit card debt or who are on the verge of losing their homes to mortgage default. Desperate to find a way out of the financial quagmire in which they are mired, these people are easy prey for shady operators posing as legitimate credit restoration agencies.
A constant stream of ready customers for credit repair con artists is ensured by still high unemployment rates and undervalued real estate markets. Savings dwindling or gone and bills piling up, Americans at the end of their financial ropes are lured by the hollow promises debt repair scammers make to get them off the hook with creditors. The National Foundation for Credit Counseling advises consumers to verify the credentials of a credit repair agent or business before providing any personal information or paying for any services. Despite their claims of stellar track records, less than 10% of late night credit repair advertisers actually help customers repair poor credit ratings or manage debt.
Scam techniques that should raise red flags and send consumers running are:

• Scammers tell you to stop paying creditors and deposit money into a special account while the credit repair agent negotiates settlements with your debtors.
• The hook scammers use is the promise to settle debts for considerably less than the actual balance due.
• The rationale used for depositing money into an account scammers set up is that the consumer will be able to pay off the entire negotiated debt in one lump sum.
• The reality is that scammers will withdraw 20% or more of the funds deposited as “service fees” without making any contact with your creditors.

A new law that recently went into effect finally offers consumers a modicum of protection. Debt repair agencies are now required to settle at least some of your debt before charging you. The only way to protect yourself from scammers and con artists is to solicit the services of a reputable credit repair agency.

New Regulations Created to Protect Consumers and their Credit

While the credit crunch and consequential economic recession has taken its toll in many ways, the one silver lining may well be the resulting lessons learned.  Many practices that once were common among banks and creditors have now been deemed misleading and detrimental to the individual and congress has started to take action to protect consumers, and ultimately the economy as a whole.

To help consumers avoid mistakes of the past, The Consumer Financial Protection Bureau has been conceptualized to look out for the financial wellbeing of consumers rather than just banks.  This agency was founded by Harvard professor and consumer advocate Elizabeth Warren and aims to essentially cut out the fine print and act on behalf of consumers to bring full clearer disclosure to the credit and lending industry.  The bureau will be housed within the federal reserve and enforce new regulations for banks, mortgage lenders, credit card, and private student loan companies, as well as payday lenders.  Small businesses will sit on panel within the group in order to ensure that new rules will not have any unintended and unjust consequences for small businesses.  The bureau is already beginning to see that regulations surrounding credit cards, debit cards, mortgages, and credit scores are being met.  Some of the recent policies to be enforced include:

Credit Cards:  Congress has imposed a maximum of $10 for credit card companies to impose minimum card use.  Merchants are no longer able to charge different prices according to use of different credit cards even though they are allowed to charge different rates for cash versus credit.

Mortgages:  Lenders have to check borrowers income and assets thoroughly during the approval process. 
Credit Scores:  Credit scores are now free once a year for all Americans and can be accessed on annualcreditreport.com.  The report includes each of the three credit reporting bureaus: Equifax, Experian, and transunion.

Auto dealers, stock brokers, and annuity salespeople are exceptions many consumer protections rules.  Individual consumers still need to watch their own credit – if there are any blemishes on your credit report, a CredTEK trained professional can assist you in repairing your credit.

Home Foreclosures Decimate Credit Scores

Caught between a rock and a hard place, homeowners are being squeezed. The financial hardship of long-term unemployment and the toll it takes on credit scores, coupled with banks’ unwillingness to modify mortgage loans, is forcing many long-time American homeowners into foreclosure. With unemployment rates expected to remain high for at least the next year, possibly longer, real estate industry experts say the problem is only going to get worse.

“There’s nothing happening right now in terms of foreclosures that makes me think there’s and end in sight,” Ken Gold, director of the Center for Real Estate Education and Research at Ohio State University, recently told The Columbus Dispatch. “It’s now being driven by unemployment and by what’s happened in the past with the banks. And it’s supply and demand: There’s plenty of supply and little demand for homes.”

According to the Mortgage Bankers Association, national mortgage delinquencies reached record levels in the first quarter of 2010. More than 10% of homeowners had missed at least one mortgage payment, a 10% increase over the previous quarter. Nearly 4.3 million U.S. homeowners – 8% of all mortgage holders — are in foreclosure and the number is growing.
Though battered and beaten, homeowners’ financial woes may not end when they hand their deed over to the bank. In an effort to recoup the money they’re losing on short sales and foreclosures, some banks are hounding borrowers to cover the loss. In June, The Washington Post recounted the experience of a Virginia homeowner whose bank billed him $148,064 to cover the shortfall when his foreclosed home sold for less than the amount due on his mortgage loan. With no resources to pay the debt, the homeowner was forced to file for bankruptcy protection.
Before the housing bubble burst, foreclosures were low and banks seldom chose to pursue deficiencies, but times have changed and banks are getting aggressive. What most over-stressed homeowners don’t realize is that there are other options to foreclosure that can allow them to keep their homes and minimize damage to their credit score. We’ll talk about those next time.

How Will a Short Sale or a Foreclosure Affect my Credit?

How Will a Short Sale or a Foreclosure Affect my Credit?


As of this week, a recent study by the real estate data provider, CoreLogic, has revealed that about 11 million US homes are occupied by owners who owe 15% or more than the current appraisal value of their home. This amounts to an alarming 23% of American home owners. This tells us that an even larger number of Americans are “underwater” on their mortgage in some capacity.

Amidst the recent real estate bubble, millions of Americans have found themselves facing the question of whether to fall into foreclosure or attempt to sell their property through a short sale. The next question is usually “which is better for my credit?” First, It is important to know the difference between the two processes. Although there may not be one with any ultimate advantage over the other, this will help you decide which process which is right for you.

A short sale is only possible when your lender agrees ahead of time to accept less than the amount owed on the loan. Not all lenders will agree to negotiate a short sale, especially if you are not currently very behind on your loan or have other cash assets. If you know your loan will become delinquent in the future, (i.e. unemployment payments running out, job ending)having a short sale in anticipation could be helpful - but depending on your individual situation, a short sale could be just as damaging to your credit as a foreclosure.

A foreclosure will occur when you are indeed behind on mortgage payments. The amount of allowed payments missed before the final foreclosure will vary according to your state. These late payments can very negatively affect your credit and regulations state that you’ll likely need to wait 24-72 months to apply for a new home loan. (One advantage for short sellers is only needing to wait about two years to re-apply for a mortgage loan.)

There is some debate about whether short sales will harm your credit any less than a foreclosure, but the fact is, neither will help you to obtain good credit. Bad credit can get in the way of renting a new apartment, buying a newer downsized home, or even getting a new car or new job. In order to secure your future after a short sale or foreclosure, it will be imperative to assess your individual situation with complete financial and credit counseling.

Government Cracking Down on “Debt Relief” Scams

Less than legitimate “debt settlement companies” have found themselves in the perfect environment to exploit during recent years. Scams Artists posing as useful debt settlement companies have been thriving on the credit crunch of recent years and on the millions of Americans who are in debt. Genuine government bailouts of banks and other corporate giants have made the idea of an actual a “government sponsored” bailout for consumers all too easy to sell. The fact of the matter is, there is no government sponsored bailout for consumer’s with credit card debt.

This may sound contrary to the many radio, tv, and internet ads you may have been hearing lately. A great deal of misleading advertising has been created to deceive desperate individuals and families in order to trick them into paying large upfront fees for what turns out to be absolutely no help at all.

You may recall recently having heard catch phrases like “Credit card debt relief act” “president Obama’s debt relief plan” and “national debt hotline.” These misleading terms are completely illegitimate and deceiving. Again, no such government program to bail consumer’s out of credit card debt or even to alleviate their debt.

Many companies who are advertising with these phrases aren’t even directly in the debt settlement business. Several are simply marketers who hope customers will contact them and give them their information so that they can sell the leads to other companies for a hefty sum. Many are just companies who ask for an upfront fee without any promises of delivering or actually delivering any debt settlement whatsoever. What’s worse? Dealing with any of these companies is likely to greatly damage your credit.

Luckily, the Federal Trade Commission (FTC) has created new laws that take effect on September 27,2010 that will help protect consumers from debt settlement scams. Under the new laws debt settlement companies and affiliates will be required to:

•Disclose how much the companies charge to settle debts

•How long the process is likely to take

•Disclose any negative consequences of debt settlement, including the facts that your credit scores could be lowered, you may get sued, and you’re likely to get a tax bill for any debt that is forgiven

•Follow a ban from collecting upfront fees

Until then, be sure to beware in order to protect your credit.

When Debt Collectors Error, Consumers Pay

When debt collectors make a mistake, it’s up to the consumer to prove his innocence. In most states, credit repair specialists caution, laws governing debt collection favor collection agencies, not debtors. In most states debt collectors are allowed to freeze bank accounts, seize checking and savings account balances, garnish wages, and place liens on homes and property without any legal oversight and often without notifying the debtor.

If the debt has already been paid, if the consumer was the victim of identity theft, if the collection agency has made an identity mistake or an error in debt amount, the consumer bears the burden of proof and must defend himself in court to resolve the problem. Unfortunately, aggressive collection actions often leave consumers without the financial resources to hire a knowledgeable attorney, stacking the decks against them once again. Too often the innocent wind up paying for debts they do not owe.

The poor economy has fueled the growth of a new type of debt collector, warn credit repair professionals. These “debt sharks” buy up lists of uncollected old debts, many of which have already been claimed as losses by the financial institutions that hold them. In the business to make money, debt sharks don’t bother to investigate to see if a debt has already been paid or reduced or forgiven. They don’t look into the circumstances of the debt to see if it’s the result of identity theft. They don’t verify the current status of the debt to see if it has been partially or fully paid.

Debt sharks take old, usually out-of-date debt lists and initiate immediate and aggressive collection actions. Many of these debt collection firms don’t even bother to contact debtors to see if they’re going after the right person, they just file collection actions in court based on the often faulty information on purchased debt lists. As soon as debt collection actions have been filed, these sharks turn around and strip unsuspecting consumers of their cash and attach their assets.

Consumers can be left with no money to pay for food, shelter or medicine. And even when debt collectors admit an error, it can take their victim’s months to recover their money.

Banks’ Manipulating Debit Payment Policies to Rack Up Overdraft Fees

In an apparent effort to recoup some of the losses suffered under enactment of new financial reform laws, some banks are manipulating the order in which they process bank account transactions to maximize the number of overdraft fees they can charge customers.

Here’s one of the scenarios reported by irate bank customers:

Say you have $500 in your checking account on a day that your bank receives four debits against your account:

$5 latte

$220 groceries

$80 veterinarian

$565 auto insurance

Your total debits for the day total $870 against a balance of $500, overdrawing your account by $370.

If the bank debits the three small purchases totaling $305 (easily covered by your $500 balance) before it processes the larger $565 insurance debit, you would incur a single overdraft fee. However, if the bank debits the larger purchase first, causing your account to be overdrawn, it can charge an overdraft fee for each subsequent debit. At the end of the day, you’ll pay 4 overdraft fees instead of one! At $35 a pop, that’s a loss of $105.

Bank customers expect their accounts to be debited in the order purchases are received. Consumer credit repair experts, however, have found that many banks — 25% according to a 2006 FDIC survey — shuffle debits received in the same day to maximize overdraft fees, generating significant profit for banks.

In our example above, if the insurance transaction arrived at the bank early in the day and was processed before the other transactions occurred, most consumers would agree that, while onerous, the bank is within its rights to impose 4 overdraft penalties. However, when the three smaller purchases occur before the insurance debit arrives, consumers rightfully argue that they should only be charged a single overdraft fee. When banks processes debit transactions out of order to rack up fees — known as “high-to-low” check clearing – consumers are understandably outraged.

Wells Fargo bank was recently called to task for high-to-low check clearing by a California judge who called the practice “gouging and profiteering.” Wells Fargo was ordered to pay $203 million in restitution to customers who had been unfairly charged. While the U.S. District Court ruling applies only to Wells Fargo bank, it is considered an encouraging sign for similar suits in other states.

What Final Phase of Credit Card Act Means for Consumers

Yesterday, on August 22, 2010, the final phase of the 3-part Credit CARD Act of 2009 went into effect. February saw the bulk of changes mandated by Congress in the way banks manage credit cards, but the final phase of the CARD Act includes some significant changes that will impact consumers. Credit repair professionals say the new changes provide additional protection to consumers from unfair and arbitrary practices by credit card issuers.

Credit card fees.

•Those annoying inactivity fees that credit card issuers charged card holders who did not use their cards are no longer permitted. Also, consumers cannot be charged for failing to meet minimum charge amounts.

•Credit card issuers are prohibited from leveling late fees that are greater than the minimum monthly payment.

Credit card interest rates.

•When credit card issuers increase a card holder’s interest rate because of late payments, they must give the consumer an opportunity to earn back the previous rate. If a card holder pays his account on time for six consecutive months, his interest rate must be lowered to the previous rate.

•Starting February 2011, credit card issuers must review a consumer’s account every six months if their interest rate was increased for any reason after January 1, 2009. If the circumstances that caused the increased interest rate no longer apply, the card issuer must reduce the consumer’s interest rate. One flaw in the new law is that it does not specify the reduction amount.

Gift cards.

•The new law protects the long-term value of gift cards. Gift cards, prepaid cards and gift certificates cannot expire within 5 years of activation, unless — and here’s the loophole – the terms and expiration are clearly disclosed before purchase.

•If consumers load additional funds onto a gift card, the 5-year expiration period is automatically extended by 5 years.

Credit repair professionals should make certain that their clients understand the latest credit card changes made under the Credit CARD Act. Click here to access a Credit.com’s Consumer Guide explaining all of the CARD Act changes.

Identity Theft Can Be Messy

First the good news: Stolen checks and credit cards may be the easiest to deal with because most banks charge victims nothing for stolen checks, and may only charge only $50 for credit cards, regardless of the amount of fraudulent charges. Some charge nothing at all. (Because of this, the identity theft protection packages that they offer aren’t worth the money.)

Now for the rough stuff. Debit cards can be damaging because of the ease of cash withdrawals. The sooner you report it the cheaper it is for you – between $50 and $500, but if you don’t notice for more than 60 days, you may be held liable for the full amount withdrawn. Ouch.

Then there’s the hassle of clearing it all up. According to Identity Theft Facts:

• Victims of identity theft lose an average of $2,000 to $15,000 in wages trying to repair the financial damage caused by identity thieves, and some even spend up to a year trying to deal with their cases.

• On average, victims spend between $850 to $1400 in expenses related to their cases, which includes paperwork and any other legal fees.

• As a result of identity theft, nearly half of all identity theft victims have difficulties obtaining credit and loans, and roughly 1/5 of victims have higher credit interest rates. Over 2/3 of victims have difficulties removing negative information from their credit scores.

This is where it may be well worth having a the help of a trained credit counselor.

Here are some tips to protect yourself:

• Shred documents with financial information

• Erase all personal information from old hard drives, memory sticks, PDA’s, cell phones etc., before getting rid of them

• Cover the keypad when you enter account numbers in public

• Don’t respond to e-mails that ask for your account number and password.

• Don’t give financial information to telemarketers who call you. Call the company’s published main number instead.

• Create strong passwords with a combo of letters and numbers that would be impossible for anyone to guess if they had basic information about you.

• Be sure your computer’s operating software is up to date and that you have antivirus software that protects you from malware and other threats.

Rescoring Can Boost Poor Credit Rating

You would think that the combination of low home prices and low mortgage interest rates would have sent the real estate market soaring, but that hasn’t happened. The fly in the ointment has been exceptionally tight credit. Since getting burned by their own subprime loans, mortgage lenders have made it difficult for consumers with good credit scores to obtain home loans. People with merely average or poor credit scores are finding it impossible to quality for a mortgage loan or any other type of credit.

Mortgage lenders face pressure to adhere to extremely tough underwriting procedures not only from within their own organizations but also from Fannie Mae, Freddie Mac and the Federal Housing Administration. New rules requiring higher credit scores have made obtaining a mortgage loan a real challenge. Mortgage lenders are looking for FICO credit scores of at least 700 and prefer scores in the mid to high 700s.

That’s a tough standard for most folks to meet today. Economic fallout from the recession and continuing high unemployment rates have caused the average U.S. consumer credit score to plummet. More than 43 million Americans — 25% of all consumers — now have FICO scores under 599, putting them in the untouchable category as far as lenders are concerned. It now takes a FICO score of 740 or higher to qualify for Fannie Mae’s best mortgage interest rates.

To combat narrow loan qualifying standards, credit repair professionals have had to get creative to find a way around the roadblocks lenders have tossed in consumers’ paths. Experienced credit repair professionals can fast-track their clients into rapid rescoring programs that have the potential to boost FICO credit scores. Rescorings performed by independent credit reporting agencies vetted by the nation’s big three credit reporting bureaus can change credit file information, presenting a more positive picture of a consumer’s credit life that results in a higher credit score.

Rapid rescoring can usually be accomplished in 3 to 5 days and typically costs between $90 and $200, depending on the number of credit accounts and borrowers. Contact a credit repair specialist to see if rapid rescoring could improve your credit score.

Credit Repair Pro Offers Fastest Route to Healthy Credit Score

If, like many consumers, your credit score has taken a hit during the recession, it will take more than a little effort to repair the damage and bring your credit score back up to desirable levels. Backlash from the recession has resulted in tighter credit standards and more onerous credit requirements. Obtaining a credit rating equal in stature to the high rating you enjoyed before the recession now requires more work, greater effort and achievement of a higher score than you had previously. Credit industry standards for good and excellent credit ratings have increased, establishing new, higher FICO scores for “good” and “excellent” ratings.

Consumers are willing to make the necessary budgetary cuts, reorganize their finances and work hard to re-establish an acceptable credit rating. The problem is that most consumers don’t know what to do or how to do it to effectively raise their credit scores. Savvy consumers realize that seeking professional help is the fastest, smartest path to restoring their credit rating. Credit repair professionals have the knowledge, training, experience and credit repair software to assist consumers in designing and implementing an action plan that will bring their credit score back up to a healthy level.

Before the recession, most people had all their financial ducks in a row. Wall Street investments, retirement accounts and savings were on track, promising a comfortable retirement in the future. The recession was like sending a pack of foxes into the duck pond. Investments and retirement accounts were bloodied or destroyed. Savings rates dropped to near zero. Not only was the cozy retirement you had been planning wiped away, but finding the cash for daily living became a trial.

As the economy has begun to improve, people are trying to get their ducks lined up again. Credit repair experts recommend a little tough love to start rebuilding your financial flock:

•Open a savings account to serve as an emergency fund. If you put 10% of your monthly income into your savings account, in a year you’ll have a month’s worth of income saved for emergencies.

•Pay bills, loans, credit card accounts, mortgages, etc. promptly. Every late fee chips away at your credit rating.

•If you get a sizable tax refund, adjust your W-2 exemptions to keep more money in your pocket.

•If you stopped making 401(k) deposits, it’s time to start back up.

The Good, Bad and Ugly of “Bad Credit” Credit Options

You practically can’t get by these days without a credit card in your wallet – you can’t book a flight, rent a car or get a decent hotel room without the presence of plastic. The problem that people with poor credit scores have is that it can be difficult to get approved for a good credit card with a low credit score or without a solid credit history. This doesn’t necessarily leave those with low scores out in the cold, but many of the options available have some less than favorable associations that you may have to deal with.

If your only desire is to be able to make online purchases or book a flight and you don’t have a whole lot of concern for improving your credit score, you could opt for a pre-paid credit card. A pre-paid credit card will work in the same fashion as a traditional credit card, but you only have access to the funds that you have put on it – it won’t do anything to establish your credit history or work to raise your credit score.

A secured credit card is similar to a pre-paid in the fact that you need to put money on the card prior to using it, but it will give you a bit more in the way of freedom than a regular pre-paid card. A secured card will often report to the major credit bureaus so you can actually start building new or rebuilding damaged credit. A secured card is a great option for someone just starting out building their credit history or for someone with poor credit who has the initial minimum to lay down to secure the card and who doesn’t want to deal with excessive interest rates.

There are credit cards specifically designed for people with low credit scores and these “bad credit” credit card can actually be a blessing for people who want to slowly rebuild their credit and have a little bit more freedom than they would with a pre-paid. The pitfall of “bad credit” credit cards is that they often have low limits and exceedingly high interest rates – the low initial limit may not be a big deal for most, but if you don’t plan on keeping up with your payments and paying off the balance every month, the high interest rates can be a tough pill to swallow. If you charge more than you should or fall behind on your payments, a credit card with a high interest rate can result in you paying hundreds or even thousands of dollars more for an item or service over the course of time it takes for you to pay it off.

If you want to obtain credit and you currently have a low score or little history, you need to weigh the pros and cons carefully prior to deciding which option is best for you. Credit is available to even those who have made mistakes in the past, but choosing the wrong option can have you in an even worse situation than you were before if you aren’t careful

Big Bank Fees Causing Customer Exodus

Big banks are taking a hit that many credit repair professionals hope will serve as a wake-up call and a return to customer-oriented service. In the wake of the economic meltdown, the subsequent federal bailout and continuing tight credit, consumer ire with the banking industry is starting to change where Americans bank. Anger and frustration over the myriad and increasing fees big banks have begun charging for previously free services has caused many customers to flee America’s big banks in favor of smaller regional or community banks and credit unions.

In an effort to recoup recession losses and get around new restrictions imposed by the recently passed financial reform bill, major U.S. banks have instituted a plethora of new fees and upped the rates of fees already in place. Fees for making a deposit, processing an ATM transaction, visiting a teller window, using the night depository, utilizing online bill payment services and other typical bank services have outraged consumers. Cash-strapped bank customers argue that these services, most of which were previously provided without charge, should still be free. After all, they argue, shouldn’t bank customers benefit from depositing their money in the bank? If banks are going to use customer money to make more money, bank customers think they should get something in return. So far, all they’ve gotten is more fees and severely restricted credit opportunities, neither of which have done anything to endear banks to their customers.

Excessive bank fees may be the instigating force for consumer unhappiness with major banks, but poor customer service and credit denial are the triggers that compel big bank customers to withdraw their cash and deposit it elsewhere. Community and regional banks and credit unions have become the happy beneficiaries of the growing big bank exodus.

Consumers are finding that community banks and credit unions provide more customer-friendly service than their behemoth counterparts. Small community banks rely on support from local residents and businesses for their business. To attract customers, community banks offer stellar, more personalized customer service and provide a greater number of services at no charge. Because they are more vested in the local community, community banks are also more apt to lend money and extend credit lines to their customers.

The Truth on Credit Restoration

Contrary to what the credit bureaus would like you to believe, credit repair does work and can work for 100% of people in most circumstances. This is, of course, provided you are getting the best advice and have an experienced professional working on your case.

Any one with a credit score below 720 can benefit long-term from the advice and information provided through credit repair; however, there are times when your own limitations make adhering to this advice impossible. The two limiting factors are: (1) your financial situation and (2) the time frame within you need to reach your results. It is possible to remove anything from a credit report, even accurate items, if the creditor does not adhere to the law the outlines what needs to be done and by when. Just because you have a certain type of account removed at one time does not mean other, similar items are going to be able to be removed, even with the same circumstances. A hit-or-miss aspect exists in credit repair, because credit repair relies not only on the strategies of the person attempting to repair the credit, but also on the effectiveness or ineffectiveness of the creditors and credit bureaus in adhering to the laws. Sometimes you want the credit bureaus and credit bureaus to follow the law, sometimes you don't-it all depends on your particular situation.

The reason credit repair has received such a bad name is due to the abundance of scam artists who flock to the easy money made available by people desperate for this type of service. This unfortunate reality leads the credit bureaus and the FTC to make blanket, untrue statements such as, "Credit repair does not work ever and there is nothing a credit repair company can do for you that you can't do for yourself." Given that more than 90% of credit repair companies are scam artists, promising the world and then disappearing when you pay, the credit bureaus and the FTC are forced to make such bold statements. It would be impossible for them to explain the truth to consumers without causing them to make a bad choice that would result in the getting scammed. As a result, the credit bureaus and the FTC must adhere to the "credit repair does not work" position.

As I have stated, credit repair does work, but...don't let anyone tell you that credit repair is effective every time. Its success varies with the number of players in the game, some of whom never perform consistently. Even if you have a true master of credit repair on your side, you have to take into account that sometimes the other players perform in a way that throws your master of his game. Take Shaquille O'Neal. Although he has the ability to win every game for his team, there are going to be times when the other team has a formation that takes him off his game and causes his results to be less than optimal. Given that fact, you still cannot predict to any level of certainty whether or not he will perform well or poorly the next time he faces that team. Credit repair is similar. Sometimes the opposing side shows up strong, other times they don't. Even if you follow the same approach with every situation that arises when doing credit repair, your results will still vary due to the other players involved. So the next time someone tells you they can get everything repaired on your credit, run the other way, because, at best, the pendulum will swing widely both ways for the same situation.

Credit repair limitations occur almost 100% of the time under the following situations. These situations make it nearly impossible for credit repair to help someone needing results within six months to a year. Please keep in mind even when you can't be helped in the short term, the advice that can be given now, if coming from a professional, can prevent you from making a mistake in the near future that may worsen your situation. Here are examples of situations where not much can be done with-in a six to twelve month period.

1. If more than 50% of the negative accounts showing on the credit report appear as unpaid collections, charge-offs, repossessions, or foreclosures and you do not have the money to either pay the accounts in full or settle them. Due to the negative accounts remaining unpaid, these items will simply reappear on your report once removed. Any negatives, even unpaid accounts, can be removed-but, unless the negative account is current, paid or settled, it will simply reappear in 10-90 days.

The only way to prevent this is to bring the account current by paying the past due amount, or, in the case of a collection, charge-off, repossession, or foreclosure, pay the balance in full or settle it for pennies on the dollar. Unpaid accounts that do not have collection, charge-off, repossession or foreclosure status require only that the past due balance be paid to be considered current. Unless the negative account is a public record, the only way to keep it from being re-reported is to make sure the status is "current, paid, settled, transferred or sold." In other words, if deleted, any negative account that does not show one of those five statuses will most likely get re-reported, unless the account is a public record.

Public records are the only negative items that do not need to be paid to prevent re-reporting. Because they are only reported once, public records, such as unpaid judgments and tax liens, can remain unpaid and yet will not reappear once they are removed. In fact, the only time they reappear is when the initial reason for removal was the public record agency failing to respond the credit bureaus' verification request with-in the 30 day period outlined by the Fair Credit Reporting Act, in which case the credit bureau would reinsert the public record if and when the public record agency responds to the credit bureaus after that 30 day period.

2. Credit repair is nearly impossible if you can't pay your minimum monthly payments and you keep adding new late payments to your report. This is a "spinning wheels" scenario that rarely yields much improvement to your credit score. In conclusion, you can repair your credit if you hire a pro and listen to his or her professional advice. The effectiveness of the credit repair depends not only on the skill of the professional you hire and your ability to cooperate with his or her advice, but also, a little luck