Quick-Fix Credit Repair May Spell Doom

When you find yourself on the edge of your patience and finances, you would definitely consider working with a credit repair agency to improve your FICO score. Generally most people look for such services only when they reach the end of the road, which makes them nervous and ready to grasp at straws if need be. Unscrupulous credit agencies count upon this desperation to sell you "magic" deals that promise to raise your score literally overnight.

How Do They Do It?

Some of these agencies do not even bother to attempt to help you in realty. They keep promising you the moon and wait until you pay them their fees. After that you're left with nothing but a broken promise and a bitter taste in the mouth.

Some agencies go a step further. They indeed get your credit report from the three credit bureaus and then dispute all the negative information falsely.

The result is that the credit bureaus would immediately remove these negative remarks and set forth investigations to check up on them simultaneously. In the meantime, the FICO score would jump forward filling you with joy and gratefulness for the credit repair agency. In a couple of months or so, the investigations would prove the disputes wrong, resulting in the negative remarks finding their way back in the report.

By this time, the credit repair agency would be beyond your reach and the deal would have been closed as "services delivered up to the satisfaction of the client". Your money is gone and you find yourself in a worse position than you were before.

Another way used by these underhanded credit repair organizations is guerilla warfare with the creditors. They get your authorization to negotiate on your behalf, and they haggle for months on the amount to be repaid. In the meantime, your credit report would show that the outstanding loan was delayed for 90 days or 120 days and accordingly your score would suffer. In most cases, after months of such tactics the creditors agree to accept a lesser amount.

However, you stand to gain nothing positive. You lost your score value because your payment would be shown as 'delayed'; you lost money in terms of taxes since the difference between what you were to pay and what you are paying would be considered as income by theIRS. And in the end you are back to square one, if not worse.

What Can YouDo About It?

Most people react with a knee-jerking action. They totally ban the name of credit repair from their vocabulary and start badmouthing the concept to whomever would care to listen. You need not do anything so drastic. All you have to do is choose the right agency or agent. Check for affiliation with esteemed organizations and ethical regulatory bodies. All credit repair agencies worth their salt would be part of ECRA or similar organizations where there are strict codes of behavior, which promote transparency, ethical behavior and a strong customer-bias. Avoid all quick fix techniques and go for the real thing. Always keep an eye open for possible fraud.

Divorce Is An Important Milestone In Your Credit Report

When you obtain a divorce decree, you divide your property according to what the judge decrees and move on. You would think that this was all there is to it when it comes to finances. However, unless you inform all the three credit bureaus about this development, the financial status of your spouse would still reflect upon your credit report as the joint account does not get dissolved automatically.

The creditors would consider you as one entity until you close the joint account(s) you have and inform both the creditors as well as the credit bureaus. You need to keep in mind that the negative comments that find place on your credit report due to the financial mismanagement of you ex-spouse cannot be erased. Therefore, it is in your interest to take immediate steps to close all the current accounts and name the responsible person for paying the debt for the particular account.

What If That Is Not Possible?

Sometimes it so happens that the creditors do not find it feasible to divide the account as you and your spouse might not be financially stable enough to solely shoulder the loan. In such cases, the creditors would not accept the separation of accounts. If such is the case, you need to find legal recourse at the earliest and pin the loan repayment responsibility as the law dictates.

This is a little murky since the legal body would take into consideration the fact that the creditors are not to suffer because of your decision to divorce. Therefore, you need to work out a reasonable method to liquidate the loan so it would not reflect negatively on your credit report. In such cases, it is always advisable to look for ways to come to a mutually acceptable agreement regarding the payment schedule and amount each one of the estranged spouse should end up paying.

Revise Your Credit Standing

There is another aspect in your credit report that would need your attention post divorce: your credit standing. In most cases, your marital home, car, and all major purchases would reflect as your credit and savings on your credit report. Post divorce, when this property is divided, this needs to be reflected in the credit report as well. Unless this is done, your spouse can still get loans or mortgages on the power of credit standing that shows in the credit report, which may cause problems to you at a later date when he or she defaults payment.

Do It Now

Finances can become a big mess after the divorce, more so if both spouse chipped in to build common property. However, it is very important that you take appropriate steps and eliminate ambiguity as much as it is possible so negative remarks that belong to your ex-spouse do not find their way into your credit report.

Keep in mind that once these remarks are posted in your credit report it may not be possible to have them removed, because legally speaking they belong there unless you have taken steps to inform your creditors and credit bureaus about the separation of accounts.


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