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By Mi ke Rober t s

The Cr edi t Sol ut i on
Copyr i ght 2012 by Mi ke Rober t s


Copyr i ght Inf or mat i on:

Copyright 2011, 2012 by Mike Roberts

All rights reserved. No part of this book may be reproduced, distributed,
transmitted, stored in a retrieval system or used in any form or by any means,
whether electronic, mechanical or digital, except as may be expressly permitted
by applicable copyright laws or as expressly allowed by the publisher or the
author in writing.

Publ i sher Inf or mat i on:

Published by Smart Consumer Solutions, LLC, 601 Van Ness Ave, STE E869
San Francisco, CA 94102.

Di scl ai mer :

All of the information contained in this publication is true and accurate
according to the best information available to me at the time of publication.
Please understand, however, that laws and credit industry practices and
procedures are constantly evolving; so you should independently update laws,
practices and facts before you take action. I do not accept any responsibility for
errors or mistakes of any kind, or for any damages or losses that might result
from the use of any information provided.

Also, I am not a lender, a collection agent or a credit reporting agency. I am not
an accountant or an attorney, and nothing in these materials is intended as
professional advice. It is personal opinion only. I am providing it to you without
any warranties or guarantees whatsoever. To obtain advice as to the tax or legal
consequences of any action covered in these materials, or any action that you
might consider based on these materials, you should consult an attorney, an
accountant, or both. What I have tried to do here is simply offer solid, useful
information that I have obtained through my own personal and business
experience. Any action you choose to take based on any information that I
provide, including forms and other attachments, is entirely your responsibility.

Tabl e of Cont ent s

Introduction: ................................................................................................... 4
Questions about Bankruptcy and Foreclosure: .................................................. 5
How long will my bankruptcy stay on my reports? ................................... 5
How long will my bankruptcy hurt my credit score? ................................ 5
Why do my discharged debts still show balances on my reports?............. 6
How low will my score go if I file bankruptcy? ......................................... 6
How will a foreclosure affect my score? .................................................. 7
How long will a foreclosure remain on my credit reports? ....................... 7
Questions about Credit Reports and Reporting: ................................................ 9
Why do I have a different score from each of the three CRAs? ................. 9
Can I use my highest score to force the other CRAs to match it? ............. 9
Can I get the CRAs to remove unauthorized inquiries? .......................... 10
The CRA keeps updating my old negative items. What can I do? ............ 10
Im trying to pay off some old charge- offs. Is this wise? ....................... 11
An OC and a CA are both reporting balances for the same account. ...... 11
Is my bank legally required to report a 30- day late pay? ....................... 12
Are old closed accounts on my reports hurting my score? ..................... 12
Questions about Credit Cards: ....................................................................... 14
I cant pay the minimums on $15,000 in card debt. What can I do? ....... 14
My credit cards cut my limits and my score dropped. What now? .......... 14
Should I get a debt consolidation loan to pay off my cards? .................. 15
Should I close the credit card accounts I dont use? .............................. 16
Is it better to reopen an old credit card account or start a new one? ...... 16
Questions about Goodwill Letters: ................................................................. 17
Will a Goodwill Letter work with several 30- days on one account? ......... 17
Can I use a Goodwill Letter for an account in collections? ...................... 17
Will a Goodwill Letter work for a 30- day on a closed account? .............. 17
Should I send my Goodwill Letters certified, return receipt requested? .. 18
I sent a Goodwill Letter and it didnt work. Whats Plan B? ..................... 18
Questions about Validation Letters: ............................................................... 20
Should I follow up a Goodwill Letter with a Validation Letter? ................ 20
I got no response to my Validation Letter. Whats next? ........................ 20

The CA has ignored all my Validation Letters. Am I out of options? ....... 20
I got a Validation Notice letter but I didnt respond. Now what? ............ 21
Questions about Investigation Letters: ........................................................... 22
Can I use an Investigation Letter for an accurate, complete item? .......... 22
The Date Opened on a credit card is wrong. Should I dispute it? ......... 22
The CRA said my dispute was frivolous. What did I do wrong? ............ 22
Can a CRA remove a disputed item and then reinsert it later? ............... 23
Questions about FCBA Evidence Request Letters: ........................................... 25
Can I use an FCBA Evidence Request Letter for a credit card account? ... 25
I cant prove a negative item is an error. Am I out of luck? .................... 25
Questions about Accounts in Collections: ...................................................... 26
The collection agent keeps calling us and driving us crazy. Help! .......... 26
Old collection items were discharged, but remain on the reports. ......... 26
The CAs law firm is threatening to sue me. Is this likely? ..................... 27
I got a computer printout from the CA. Is that enough evidence? ........ 27
What can I do about four medical collections that are 5- 6 years old? .... 27
The statute of limitations is up, but the items remain on my reports. .... 28
Miscellaneous Questions: .............................................................................. 29
How do I remove accounts that were paid in settlement? ...................... 29
My scores are stuck at 650 or so. I dont know why. Can you help? ....... 29
I dont have time for all these steps. What are my options? ................... 30
I am going through a divorce. What can I do to protect my credit? ........ 30
Is it illegal to remove a negative item from a credit report? ................... 30
Should I use a debt consolidation company? ......................................... 31
What does pay for deletion mean, and when is it used? ...................... 31
Would the CRAs raise my scores if they knew why I couldnt pay? ......... 32
Should I hire an attorney? ..................................................................... 32


Int r oduct i on:

For several months before I released The Credit Solution in final form, I offered
a free video series on my website. The videos were sort of a forerunner to the
final product, and the purpose was to get a lot of feedback from folks like
youfeedback that I could use to make The Credit Solution as good and as
valuable as possible. I was hoping for a big response.

Thats exactly what I got. I was pretty sure that people would be interested in
the topics I covered in the videos (times are tough, after all); but I have to admit
that even I was surprised by the volume of the response I received. It was huge.
Much of it took the form of thoughtful comments and suggestions, but many
people just took the opportunity to ask me questions about the process of
solving personal credit problems.

Of course, I did my best to answer every question; but it wasnt long before I
noticed that many were very similar. I was answering basically the same
questions over and over again. It turns out that many, many people have the
same issues. I worked hard to cover all these concerns in The Credit Solution,
and I think I succeeded; but I didnt want to just leave it at that. I thought it
would be helpful to put all the most important questions in a straightforward
Q&A format and share them with everyone.

So here they areyour questions, and my answers. Before we get started I want
to cover a couple of technical points about how I decided to present this

1. I have done my best to delete or edit out all information that might be
used to personally identify any questioner. To the extent that a question
appears to provide personal information, that information is fictional. It
isnt real, and any resemblance to the circumstances of any real person is

2. Each individual question is in fact a combination of several similar
questions I received. In most cases I just boiled down the language from
several questions and rolled it into one in order to focus on a single


Quest i ons about Bankr upt cy and
For ecl osur e:
How l ong wi l l my bankr upt cy st ay on my r epor t s?
Quest i on: I just went through bankruptcy and got all my debts
discharged as of about six months ago. My score is really low right now
about 500. My credit reports all show the bankruptcy, and I understand
that it will probably stay on my reports for at least seven years. Is that
true? Is there any way to get the bankruptcy removed early?

Answer : Unless you find a way to get it removed, your bankruptcy will
probably stay on your reports for ten years, not seven. This period runs
from the date the discharge order is entered, not the date the original
petition was filed. Its true that most negative items must be removed
after seven years, but in the case of Chapter 7 bankruptcies, Congress
saw fit to extend the period an extra three years.

As far as having your bankruptcy removed from your credit report is
concerned, that is difficult to do if the bankruptcy is legitimate and is
accurately reported. If there is anything about the way your bankruptcy is
reported that is incomplete or inaccurate, you can try to get it removed
through the Investigation Letter process. Bankruptcy courts are set up to
respond to CRA investigation requests, however; and normally they are
able to provide the necessary documentation to verify the entry.
How l ong wi l l my bankr upt cy hur t my cr edi t scor e?
Quest i on: I went through bankruptcy just over one year ago. I just got all
my credit reports and my scores are really low. Is there any hope of
raising my score while my bankruptcy remains on my reports?

Answer : Yes, there is. Even though your bankruptcy might remain on
your reports for years to come, there are steps you can take right now to
start diminishing its effect on your credit score. At the moment your
score is low because of the bankruptcy, no question; but it doesnt have
to stay that way. You can start to establish a new, positive credit history
going forward from here, using the methods I lay out for you in my Build
Your Credit from Scratch report. Within a few months, as your bankruptcy
fades further and further into the past and as you build up a recent,
positive payment history, youll see your score improve significantly.

Why do my di schar ged debt s st i l l show bal ances on my
r epor t s?
Quest i on: I didnt want to file bankruptcy, but in the end I had no choice.
I had a ton of credit card debt that I couldnt pay once I became
unemployed in 2009. I listed each of my delinquent cards on my Chapter
7 petition, and I received a full discharge from the bankruptcy court
about a year ago. My old credit card companies stopped bothering me
when I filed bankruptcy, and I have not heard from them since; so I
thought I was all set with them. But I got my credit reports just a week
ago, and I was very surprised to see two of these old cards listed on my
report as active accounts with balances. These are the same balances that
I thought were discharged in bankruptcy. Can these credit card
companies still come after me for these old debts? If not, can I get these
items removed from my credit reports?

Answer : If your credit card debts were accurately listed on your
bankruptcy petition and the court granted your request for a discharge,
then the debts are gone. Theres a good reason why you havent heard
from the credit card companies since you filed. They know theyre out of

As far as removing these items is concerned, you can send Investigation
Letters to the CRAs. Any debt that has been discharged in bankruptcy
should show a zero balance. If it doesnt, then the listing is an error, and
it is made to order for the Investigation Letter process.
How l ow wi l l my scor e go i f I f i l e bankr upt cy?
Quest i on: I have a friend who went through bankruptcy and she told me
her credit score went down 250 points. Should I expect that to happen to
me if I file bankruptcy?

Answer : There isnt any way to know in advance exactly how far a score
will drop because of a bankruptcy. It varies from person to person. The
reason is that people file bankruptcy for different reasons, and the
number of accounts (debts) discharged varies a lot too. Generally, the
greater the number of accounts discharged in a bankruptcy, the greater
the damage to the credit score. It also matters what the score was before
the discharge. If a person with a 650 score files, the drop will be greater
that it would be for a person whose score is 475 at the time of filing.

Your friends experience is pretty typical. If you have a decent score now,
and if you have a number of credit cards and some other debt that will be
discharged, you should expect to see your score drop by at least 200
points; and it could more.

How wi l l a f or ecl osur e af f ect my scor e?
Quest i on: I have managed to avoid foreclosure so far, but Im way behind
on my mortgage and at this point I think foreclosure is probably
inevitable. Ive never been through anything like this before. I used to
have good credit, but with my recent missed mortgage payments, my
score has dropped a lot. If the bank forecloses, what will happen to my

Answer : If your bank forecloses, you can expect your score to fall far
lower than it is now. The only thing worse than a foreclosure, from a
credit score point of view, is a bankruptcy. Your score is likely to go down
by 100 to 200 points, depending on how far it has already dropped by
the time the foreclosure is reported.

Depending on which state you live in, the appearance of the foreclosure
on your credit report might not be the end of the bad news. In some
states, like New Hampshire and certain other Eastern states, a foreclosing
bank is allowed to sue you in court to try to force you to pay for any
deficiency remaining on the debt after the foreclosure sale. In other
places, like California, this isnt allowed. If you have a deficiency (most
people have a big one) and your bank sues you in court, youll soon have
a judgment on your credit report to go along with your foreclosure. This
will do still more serious damage to your score.

How l ong wi l l a f or ecl osur e r emai n on my cr edi t
r epor t s?
Quest i on: I have a foreclosure on my credit reports right now because I
lost my home to the bank about two years ago. My score dropped a lot in
the period leading up to the foreclosure, and still more when the
foreclosure was completed and the bank took the house. Its still very
low. How long will this black mark remain on my reports? Is there any way
to improve my credit in the meantime?

Answer : You can expect to see your foreclosure on your credit reports
for seven years after the date of the foreclosure sale. As with bankruptcy,
you can challenge the foreclosure entry on your reports if there is
anything inaccurate or incomplete about it. I dont have statistics to back
this up, but I think the chances of getting a foreclosure removed through
the Investigation Letter process are better than they are for bankruptcies.
Heres why: With foreclosures, the CRAs have to send the investigation
request to a bank (creditor), not to a court. I think this increases the
likelihood of success. The bank probably isnt expecting any more money
from the foreclosure process, and has little incentive to take the time and
effort to provide the requested information.


As far as improving your credit in the meantime is concerned, there is a
great deal you can do. Follow all the steps in my Build Your Credit from
Scratch report. Within a few months, your score should start to show
significant improvement.


Quest i ons about Cr edi t Repor t s and
Repor t i ng:
Why do I have a di f f er ent scor e f r om each of t he t hr ee
Quest i on: I have 592 at Experian, 605 at Equifax and 618 at TransUnion.
What gives?

Answer : Its very normal for the three major CRAs to report different
FICO scores. There are two reasons for this. First, they all use the same
basic mathematical calculations (software programs); but each company
tweaks its own system just a little. This almost always accounts for at
least a small difference. Second, dont forget that not all lenders and CAs
report to all three CRAs, so the three companies might not be working
with exactly the same information; and even if they do get the same
information, each CRA is prone to make errors and mistakes. Different
mistakes will lead to different results.
Can I use my hi ghest scor e t o f or ce t he ot her CRAs t o
mat ch i t ?
Quest i on: I have different scores from each of the three CRAs and the
reports dont match either. On a couple of important points they are very
different. This seems sloppy and very unfair. Dont they legally have to
report the same information about me and dont they each have to give
me the same FICO score? Can I use my highest score to force the other
two CRAs to match it?

Answer : You make a very good point that this system is sloppy and
unfair. These CRAs are private companies, however, and there is no law
that requires them to report the same information or calculate the same
FICO score for each consumer.

And no, you wont have any luck getting one of the CRAs to change your
FICO score because another CRA gave you a higher number. The three
CRAs are competitors, and they all believe they are doing it right. Their
only concerns are to avoid legal trouble and collect fees from lenders who
request information. The two CRAs that assigned you a lower score will
be happy to know that the third CRA came in higher because they believe
this puts them at a competitive advantage. Lenders are more likely to
request reports from CRAs that issue lower scores.

Can I get t he CRAs t o r emove unaut hor i zed i nqui r i es?
Quest i on: I just got my report and I see that Bank of America has put two
inquiries on my report in the past six months. I dont have any accounts
with them. Is this hurting my score? If so, what can I do?

Answer : Whether these inquiries are hurting your score depends on
whether they are hard or soft. A hard inquiry is one that you authorize
when you apply for credit. If you actually applied to Bank of America for a
loan or a credit card in the past several months, then these inquiries are
hard, and they may be having a negative effect on your score (at least
temporarily). If you didnt apply to Bank of America for any credit, then
what youve seen on your reports are probably inquiries that the bank ran
without asking you. Banks and credit card companies do this all the time
before sending out Youve Been Pre- Approved! offers. Inquiries like this
are soft, and they dont hurt your score at all.

Take another look at your reports to see how these new Bank of America
inquiries are categorized. All three CRAs make it clear on their reports
whether an inquiry is authorized or not (whether it is hard or soft). If you
didnt apply for any credit from Bank of America and you see that the
inquiries are being counted against you, then you can use the dispute
procedure (Investigation Letters) to challenge them.
The CRA keeps updat i ng my ol d negat i ve i t ems. What
can I do?
Quest i on: I have a couple of collections items on my report that are older
than seven years. They are staying on my credit reports because they
keep updating? At this rate, theyll never go away. What can I do about
this, if anything?

Answer : A CRA is allowed to keep reporting most items for seven years
from the date of first delinquency. Im not sure what you mean by
updating, but it isnt unusual for a creditor to report a new date of first
delinquency if there is any later activity on the account. They particularly
like to do this if you request an investigation on the account.

If that is what is going on here, it is illegal. You have every right to
challenge the accuracy of these listings through the Investigation Letter
process. These are old items, and the investigation (assuming the
creditor responds to the CRAs evidence request) will reveal that they are
beyond the seven- year period. They should soon disappear. If the
creditor doesnt respond to the CRAs request for information within 30
days (a likely scenario), theyll soon come off your report for that reason.

Im t r yi ng t o pay of f some ol d char ge- of f s. Is t hi s wi se?
Quest i on: I ran into some tough times about four years ago and I had a
couple of accounts that I couldnt pay anything on at all. In the end the
creditors charged them off and thats how theyre listed on my credit
reports. These days I am doing much better financially, and I feel like I
should pay these debts. Is this wise? I want to pay what I owe these
people, but I dont want to hurt my credit if I can avoid it.

Answer : If you have the ability to simply pay these old debts, then youve
certainly turned your finances around in recent years. Congratulations. As
it happens, you have an opportunity here to do more than just avoid
damage to your credit. You should be able to improve it. Right now these
old charge- offs are on your reports and theyre hurting your score. You
can probably get rid of them.

I recommend that you offer to pay the debts, but only if the creditors
agree to remove the items from your reports. This is called pay for
deletion. Contact each creditor and say that youre willing to pay the
debt, but only on the condition that the creditor will notify the CRAs to
remove the item. Once you get verbal agreement, follow up with each
creditor in writing. Before you pay, make sure you get an authorized
representatives signature on a letter stating that the creditor agrees to
the deletion.
An OC and a CA ar e bot h r epor t i ng bal ances f or t he
same account .
Quest i on: I have an old credit card account that went to collections. The
credit card company (OC) is reporting a balance due on this account, and
so is the Collection Agency. Im getting hit twice on the same account.
This cant be right. Is there anything I can do about this?

Answer : First of all, youre correct. This is not right. When an account
goes to collections, the original creditor should start reporting it as
charged off, transferred or sold, depending on whether they sold the debt
to the CA or just asked the CA to collect it. Regardless, the amount
showing as owed to the OC should be zero. It is essentially a closed

So, you have a couple of options. You can write to the OC, point out the
error and ask them to correct it. They might do it, and this will help you a
little; but the negative item will remain on your reports. A better option is
to dispute the OC entry using the Investigation Letter procedure, and at
the same time to challenge the CA entry using a Validation Letter. The
Investigation Letter process makes sense for the OC entry because that
entry is an error. The Validation Letter is your best option when youre

dealing with an item reported by a CA and that item remains unpaid.

One more thing: Dont forget about the statute of limitations. Unless you
know for sure that the statute has expired and the creditor cant sue you
in court, think through the issues that I outline in The Credit Solution
before you take action.
Is my bank l egal l y r equi r ed t o r epor t a 30- day l at e pay?
Quest i on: I was about 35 days late on a car payment recently, and I
called my bank to ask that they not report this to the CRAs. The person in
the credit department told me they were legally required to report the
payment as 30 days late, and that if they didnt they would be violating
federal law. She said they had no choice. Is this true?

Answer : I believe that what this person told you is completely false. Im
not a lawyer, but Im very familiar with the laws that apply to this
situation. I dont think your bank is under any legal obligation to report
anything to anyone. Your bank isnt required to report your 30- day late
payment, and if they dont do it, nothing bad will happen to them. Im
sure its their policy to report all 30- day late payments, and they dont
want to go against their own internal policy; but thats all it is- an internal
policy. Its not the law. The federal laws that pertain to lender behavior
have to do with accurate billing and truth in lending, not credit reporting.

The answer you got from the credit department, though it is nonsense, is
not at all uncommon. I suggest that you try a different approach. If
youve only got this one blemish on your account with your bank, this
might be a good situation for a Goodwill Letter. If its only been a month
or two since you missed the payment, you might want to wait another few
months before making the request. Write your letter to someone else in
the bank, maybe a loan officer or branch manager. You might get a very
different response.
Ar e ol d cl osed account s on my r epor t s hur t i ng my
scor e?
Quest i on: I have a three old credit card accounts that still show up on my
credit reports even though then have been closed. Are these old accounts
doing anything to drag down my FICO score? Should I try to get them

Answer : Whether these old accounts are hurting your score depends on
why they were closed. If you closed them voluntarily, and your payment
history on the accounts was good, then the fact that these accounts are
showing up on your reports today isnt doing your score any harm. If, on
the other hand, the credit card companies closed any of these accounts

due to payment problems, then they certainly are hurting your score. If
that is the case, you can try getting them removed through the
Investigation Letter process.

Let me make a separate point about closing revolving accounts. For
accounts that are in good standing, its not a good idea. There are two
reasons for this: First, the older your open accounts are, the higher your
credit score will be. When you close an old account, you take it out of the
mix and you lower the average age of all your accounts. Second, when
you close an old account, you lower the amount of credit you have
available for use. Its better to just leave the account open, even if you
dont use it. That way the credit limit on the account is counted in the
calculation of your utilization rate.


Quest i ons about Cr edi t Car ds:
I cant pay t he mi ni mums on $15,000 i n car d debt . What
can I do?
Quest i on: For a long time I had three credit cards and I paid the balances
down to zero each and every month. Then I lost my job and we still had
to eat. I started using the cards to buy groceries and other necessities,
and before long I was making only minimum payments. Today Im back
to work, but I make less now than I used to make at my old job, and I
have so much credit card debt now (about $15,000) that I cant even
make the minimum payments. I dont know what to do next. Help!

Answer : This is a very tough situation, and its all too common these
days. Youre not alone. There are no simple answers for you, but I have a
couple of suggestions that might help. First, work your way through the
exercises in The Credit Solution Workbook. You might find some ways to
squeeze a few extra dollars out of your current budget so that you can
start making some progress on these cards and still make ends meet.

Second, you might want to consider negotiating with your credit card
companies to lower your balances. I go into the details and the mechanics
of how to do this in a separate program I developed called Negotiate with
Your Creditors and Settle Your Debts. In broad terms, it would work as
follows: You negotiate with the card companies independently and make
the best deals you can. If the total you then owe is low enough, you can
try for a debt consolidation loan to pay them all off at the reduced
balances. After that youd have a single monthly payment that you could
handle at your reduced level of income.

I should note that this process will cause your credit score to drop
significantly, but right now thats a minor issue compared to having all
your cards go into collections. Once youre up and running and making
payments this negative history will fade into the past and eventually be
outweighed by your good payment history.
My cr edi t car ds cut my l i mi t s and my scor e dr opped.
What now?
Quest i on: I have three credit cards, and Ive had these same three cards
for several years. The limits used to be $3,500, $5,000 and $6,000. I
used the cards pretty actively, and sometimes I didnt pay the balances
down to zero at the end of the month; but I was never late on any of
them. My credit score was very good. Now the two larger cards have
dropped the limits to $2,000 and $2,500 respectively. I still use both
cards at about the same level as I always did, so now my utilization rates

on those two cards are much higher. My score has dropped. What can I
do about this, if anything?

Answer : Well first of all, to start with the most obvious step, you could
call these two card companies and ask them to restore your old limits, or
at least raise them. The chance of them agreeing, now that they have
taken the action to lower your limits, is pretty low. If you decide to make
the call, start with an informal discussion and see what the lay of the land
is. Dont make the request until someone gives you an indication that
youll probably get a yes to your request. The reason is that a request to
raise your limit will result in an inquiry on your reports.

Otherwise, you need to do one or both of two things: (a) Start using your
credit cards less (and thereby stay under 30 percent of your new limits),
or (b) get some more credit cards. If you get new cards, you can do a
balance transfer to spread out the balances so that youre under 30
percent on all your cards, including your new ones. After that, spread out
your monthly credit card use among all your cards (both new and old).
The new cards will be new credit on your reports, so your score will go
down a little when you open them; but if you can get all your utilization
rates under control the long term net effect on your score will be worth it.
Shoul d I get a debt consol i dat i on l oan t o pay of f my
car ds?
Quest i on: I have about $10,000 in credit card debt spread out over four
cards. Im way over the 30 percent utilization rate on all of them and the
interest rates on the balances are averaging 27 percent, so this is a bad
situation all around. My bank will give me a low interest debt
consolidation loan to pay them all off. Right now my credit scores are in
the mid- 600s. Im thinking this is a good idea. What do you think?

Answer : I agree with you. This should work out well for you. Right now
your high card utilization rates are putting a serious dent in your scores.
When you take out this new consolidation loan, your scores will probably
dip even lower for a short period because this is new debt. Before long,
however, the very low utilization rates should catch up and the net effect
should be better scores.

From a personal finances point of view, this makes sense as well. Right
now youre paying credit card interest to the tune of $2,700 per year.
Thats a killer number. The rate on your new loan will be much lower, and
it will enable you to start making some headway in lowering the principal
balance. This is a good thing. It would be worth doing even if it wasnt
going to improve your credit scores.


Shoul d I cl ose t he cr edi t car d account s I dont use?
Quest i on: I have been working hard to improve my credit and so far I
have managed to pay off and close down two credit card accounts that
used to carry big balances. I thought this would really help my score.
There has been some improvement, but not as much as I expected. Am I
doing something wrong in closing down these unused accounts?

Answer : I dont recommend closing unused credit card accounts. From
the point of view of getting your scores as high as possible, its better to
keep these accounts open, even though you dont use them. This all has
to do with the utilization ratio. The more open cards you have (within
reason) with balances below 30 percent of the credit limit, the better.
When you close down an account, you no longer have it available, and it
no longer counts in calculating your utilization ratio. I recommend
requesting that these accounts be reopened. You dont need to use them
much (just make an occasional charge to keep them active), and youll
soon see your scores improve.

There are two points to keep in mind here. First, requesting to reopen an
account likely will result in another inquiry. This will have a minimal
negative effect on your score. Second, your creditor might want to just
give you a new account. If that happens, your credit score will drop
further because youll have new credit on the books.
Is i t bet t er t o r eopen an ol d cr edi t car d account or st ar t
a new one?
Quest i on: I have only one active credit card account right now, and I was
thinking I should have at least two more. I have had other cards in the
past, but I closed them because I wasnt using them. The decision to
close these old accounts was mine. The credit card companies would
have been happy to continue with me because my payment history was
excellent. Now that I see how a couple of extra cards could help my
score, Im torn between opening two new accounts and trying to reopen a
couple of these old ones. What do you think?

Answer : I definitely would try to reopen the old accounts. Either way you
go, youre going to take a slight hit to your scores because there will be a
couple of new inquiries on your reports. You wont be able to avoid
that; but what you want to do here, if possible, is make sure you dont
end up with new credit on the books. Your old accounts have excellent
credit histories, apparently, and you want to get the benefit of that when
you reactivate them. Call the companies, and make sure in advance that
they will report your old credit histories on the reactivated accounts, and
that they will list the accounts with open dates going back to when you
originally started using those cards.

Quest i ons about Goodwi l l Let t er s:
Wi l l a Goodwi l l Let t er wor k wi t h sever al 30- days on one
account ?
Quest i on: I have a pretty bad payment history on one of my credit card
accounts. I have several 30- days on my report for that account. I have
been paying regularly lately, so I was thinking a Goodwill Letter might be
an option. What do you think?

Answer : You can give it a try, but I wouldnt get my hopes up for this
account. Goodwill letters work best if there is only one minor infraction
and you can point to a special bump- in- the- road circumstance that
caused you to miss that one payment. It sounds like several 30- day late
payments will be hard to explain. A better option is the FCBA Evidence
Request Letter.
Can I use a Goodwi l l Let t er f or an account i n
col l ect i ons?
Quest i on: I have a good relationship with my bank, but several months
ago I was out of work for awhile and one of my accounts went to
collections. I have since paid it off. Can I use a Goodwill Letter to get it
removed from my reports?

Answer : Well, there is no harm in trying a Goodwill Letter in this
situation, but typically results are not good. Your chances might be better
than normal if your relationship with the lender is really good, but I still
wouldnt count on it. The reason is that it costs a lender time, effort and
money to send an account out for collections, and the more hassle an
account costs, the less forgiving the lender tends to be.
Wi l l a Goodwi l l Let t er wor k f or a 30- day on a cl osed
account ?
Quest i on: My credit scores are pretty good, but I do have a 30- day on an
account that I closed about a year ago. Im sure its hurting my score. Do
you recommend using a Goodwill Letter in this situation?

Answer : You can try it. There is no downside, and you might get lucky;
but there is no incentive for the lender to cooperate in this situation. The
value of doing business with you in the future doesnt exist. To remedy
that you might consider asking to re- open the account along with your
goodwill request.


On the question whether this old negative item is hurting your score, I
doubt if its doing that much damage. If you closed the account a year
ago, then the 30- day late payment is fading into the past. It does less
and less damage as time passes and you continue to make timely
payments on all your cards and other debts. Unless youre contemplating
a major loan in the near future and you know that a difference of ten to
fifteen points on your score will affect your interest rate, working to get
this removed might not be worth the trouble.
Shoul d I send my Goodwi l l Let t er s cer t i f i ed, r et ur n
r ecei pt r equest ed?
Quest i on: I want to send out some Goodwill Letters, and Im thinking I
should send them certified, return receipt requested. There are two
reasons for this: First, if I dont get action, I want to be able to take the
next step right away. Second, I want the lender to understand the
importance Im placing on the request. Do you recommend this?

Answer : No, I definitely do not recommend sending Goodwill Letters
certified. Just put stamps on them and send them first class mail. Heres
why. The message of a Goodwill Letter is that youre asking for a favor,
and that you know you need that favor because of your own fault and no
one elses. A certified letter sends exactly the opposite message. It says
you want to be able to prove receipt because you intend to hold the
lender responsible. I believe this puts the lender in a defensive mindset,
which will work against you. I know that using regular mail means you
wont know when the letter is delivered; but this is preferable to using a
delivery method that will, in my opinion, kill any chance that the letter
will be effective.

I sent a Goodwi l l Let t er and i t di dnt wor k. What s Pl an
Quest i on: About a year ago I had a single 30- day late payment on a
credit card that I have had for almost six years. One blemish; thats all.
Otherwise I always paid on time. I sent a Goodwill Letter, and heres the
answer I got: We are unable to update any information that was reported
correctly. Obviously, they dont value their relationship with me, and I
am angry now. I want to push the issue. What should I do?

Answer : Well, this is frustrating, for sure; but I wouldnt give up on
Goodwill Letters just yet. Credit card companies are big institutions, and
one hand doesnt always know what the other is doing (in fact, they
usually dont know). You might send the letter to a different department,
or if you have the name of anyone in the company you can send it to that

person. You also might try calling, using a very friendly tone, to see if
someone there can suggest who would be the best person to send the
letter to.

If a second letter fails, you can send an FCBA Evidence Request Letter, or
you can try disputing the entry by requesting an investigation through
the CRAs.


Quest i ons about Val i dat i on Let t er s:
Shoul d I f ol l ow up a Goodwi l l Let t er wi t h a Val i dat i on
Let t er ?
Quest i on: I sent out a Goodwill Letter to my credit card company and got
no response. Should I follow up now with a Validation Letter?

Answer : No, you should not use a Validation Letter in this situation. Its
very important to understand that Validation Letters are only for unpaid
accounts that are in collections, and they only go to collection agents.
They dont go to original creditors. Im assuming you are now current on
your account, so you can follow up here with a FCBA Evidence Request
Letter. If that fails you can try an Investigation Letter.

I got no r esponse t o my Val i dat i on Let t er . What s next ?
Quest i on: Its been almost two months since I sent the CA a validation
letter. They have stopped harassing me, and thats good; but Im not sure
what to do next. Do you have any suggestions?

Answer : Im assuming your Validation Letter included the demand that
the CA communicate with you only in writing. If so, and theyve stopped
calling you, you got some benefit from the letter.

As far as what to do next is concerned, you should check your credit
reports. Very often when a CA gets a Validation Letter, it will just delete
the item from the reports and not even bother to respond in writing to
the consumer. This might be the case with your item; and if it is, youre
done. If your negative item has disappeared from your reports, youve
accomplished your goal, and theres nothing else you need to do.

If the item remains on your reports, you can now follow up with another
letter. I lay out exactly how to do this in the Workbook that is included as
a bonus with The Credit Solution. Youll find step- by- step instructions
The CA has i gnor ed al l my Val i dat i on Let t er s. Am I out
of opt i ons?
Quest i on: Ive followed all your suggestions about using Validation
Letters to get rid an unpaid collections item on my reports. The CA
agents dont call me anymore; but otherwise theyve just ignored me.
They havent even written to me, and the collections item is still showing

up on all my reports. Whats next for me? Am I just stuck with this
negative item on my reports?

Answer : Its an unfortunate fact of life that sometimes CAs just ignore
their legal obligations to consumers. This is less common today than it
used to be, but it still happens. In your case, you can now take your fight
to the next level by filing a complaint with the FTC or by filing suit
against the CA in federal court. You also have the option, if you can find
anything about the report entry that is inaccurate or incomplete, of
writing an Investigation Letter to the CRAs. Whether youll want to take
any of these additional steps will depend on how much money is owed,
whether the statute of limitations has run, and how old the item is. If the
amount is large and you cant pay if you get sued, you might want to
leave well enough alone. For a detailed discussion of the statute of
limitations considerations, please see Chapter 7 of The Credit Solution.
You should also keep in mind that if the item is really old, its harmful
effect is lessening with time and it will soon fall off your reports of its
own accord.

I got a Val i dat i on Not i ce l et t er but I di dnt r espond. Now
what ?
Quest i on: I had an account go to collections not long after I lost my job. I
soon got a notice from the CA that they had the account for collection,
but I didnt send out a Validation Letter within 30 days. I did remedy the
situation within the next couple of weeks, but by then the collections
item was showing up on all three reports. Am I stuck with this negative
item on my reports because I dropped the ball by not sending my letter
within 30 days after the Validation Notice letter?

Answer : No, youre not in the great position you would have been in if
youd responded within 30 days, but you can still try to use the Validation
process to get the item removed. The problem with waiting longer than
30 days to respond to a Validation Notice letter is that it allows the CAs
to do just what your CA did to you. They immediately reported the item;
and now it is on your report. If they had received your letter sooner
(within the 30 days), they would have been prohibited from reporting the
item in the first place. From your point of view, this would have been
much better.

Quest i ons about Invest i gat i on Let t er s:
Can I use an Invest i gat i on Let t er f or an accur at e,
compl et e i t em?
Quest i on: I have a paid collections item on my credit report. Its true that
the item went to collections and its true that I paid the amount due. The
account shows a zero balance. Now that Ive paid the account, I dont see
why this item should remain on my reports and hurt my credit. This
seems unfair to me. Can I use an Investigation Letter to get it removed?

Answer : As I understand your question, you want to use an Investigation
Letter to challenge an entry that is complete and accurate. Technically
speaking, this is not an option. The language of the Fair Credit Reporting
Act makes it clear that the dispute process is for items that are
incomplete or inaccurate in some way. Normally, this requirement doesnt
present much of a hurdle. There is almost always something about an
entry that doesnt quite pass muster due to the sloppy record keeping
methods of creditors, CAs and CRAs alike.
The Dat e Opened on a cr edi t car d i s wr ong. Shoul d I
di sput e i t ?
Quest i on: Equifax is reporting that I opened a Capital One credit card
account back on 5/ 2002, when in fact I didnt open the account until
5/ 2004. Otherwise they are reporting the account correctly and my
payment history is spotless. I just want my reports to be completely
accurate. I assume that if I challenge this wrong date, they will fix it. What
do you think?

Answer : I think that if you dispute this item, Equifax will likely fix it or
delete it. Neither of these results is good for you. If the account has a
solid history, the older it is the better. If the account is removed, or if the
Date Opened is changed to 5/ 2004, your score will go down. I
recommend that you leave this matter alone and do nothing. This is an
error that is helping you, not hurting you. The Fair Credit Reporting Act
doesnt assign the consumer any responsibility for maintaining the
accuracy of credit reports. That obligation falls on the credit bureaus. I
would ignore this.
The CRA sai d my di sput e was f r i vol ous. What di d I do
wr ong?
Quest i on: I sent off a dispute letter to TransUnion in which I listed
several errors, omissions and inaccuracies with many different accounts. I
thought they would at least respond to each of my issues, even if they

didnt agree with me; but they just wrote back to say that they thought
my letter was frivolous. Apparently they dont intend to do anything else,
and all the items I challenged remain on my report. What good is this
dispute process if they can just brush it aside by saying it is frivolous?

Answer : The Fair Credit Reporting Act does say that a CRA doesnt have
to investigate if it reasonably determines that a dispute is frivolous.
The law doesnt say exactly what frivolous means; but a lengthy list of
challenged items covering several different accounts might very well meet
the test. Regardless, its a good bet that when the CRA saw your long list
of problems, they just said to themselves, No way are we going to do all
this work. Well just throw this letter in the frivolous pile.

You never want to give the CRAs an excuse to designate your dispute as
frivolous. Thats why I normally recommend that a dispute letter include
no more than three or four items. You want to give the impression that
youre pointing out a couple of serious problems with your report, not
that youve combed through your report to find every conceivable issue
with every one of your accounts. You have the right to respond to the
letter you received, but I suggest that you let two or three months go by
and then write a new dispute letter. This time identify only two or three of
your most serious issues. Dont make any reference to your previous
letter. Theres a good chance youll get a better result.
Can a CRA r emove a di sput ed i t em and t hen r ei nser t i t
l at er ?
Quest i on: I had an item on my reports that was killing my score (an old
charge- off), so I challenged it using the Investigation Letter process. I
checked my reports after 30 days, and lo and behold, the item had
disappeared. My scores were better, and I was happy. Now Im not happy.
I just got my updated reports, and the old charge- off is back. Its like it
never left, and my scores are down again. What is this all about? Can they
do this?

Answer : What happened to you is called reinsertion. It is very common,
and you were wise to keep updating your reports. At least now youre
aware of the problem and you can take action. Many people dont catch
this when it happens, and their FICO score pays the price.

Heres why this is such a common problem: The CRA has only 30 days
after getting a dispute letter to do one of two things: (1) produce
evidence that the entry is correct or (2) remove the entry from the report.
They dont produce the evidence themselves; they have to get it from the
creditor. If they dont hear back from the creditor within the 30- day
period, they have no choice but to remove the item. But, if the evidence

arrives a few days or a few weeks later, and it tends to prove the accuracy
of the original entry, the CRA will just start reporting it again (they will
reinsert it). Thats what happened to you.

The CRA is supposed to notify you in writing if an item is reinserted, but
they dont always do it. You can call them on it, but that isnt a process
that is likely to get your negative item removed. Youre better off
choosing one or the other of these options: (1) You can request to see the
creditors certification of accuracy and completeness. Maybe youll see
something there that is clearly wrong or incomplete. (2) You can send a
new Investigation Letter challenging the new item, as amended. This way
youll be treating the new entry as a new error or omission.


Quest i ons about FCBA Evi dence Request
Let t er s:
Can I use an FCBA Evi dence Request Let t er f or a cr edi t
car d account ?
Quest i on: I see how the creditor confusion technique would work with
an installment loan. Can I use the same kind of letter for a credit card
account that has some old, serious late pays?

Answer : Yes you can. The FCBA Evidence Request Letter isnt limited to
any particular kind of account. I assume this account is current now, or
that it was closed after it was brought current. If that doesnt work out
for you, you can try the Investigation Letter process.
I cant pr ove a negat i ve i t em i s an er r or . Am I out of
l uck?
Quest i on: I just got all my credit reports (for the first time ever) and I was
surprised to see a late pay item on an old account that I thought I always
paid on time. This entry is for about three years ago, and I have shredded
my records (maybe not a good idea). Anyway, can I use the FCBA Evidence
Request process if I cant prove that the entry is wrong?

Answer : Yes. You dont have the obligation to prove anything. Its up to
the creditor to provide the evidence.


Quest i ons about Account s i n Col l ect i ons:
The col l ect i on agent keeps cal l i ng us and dr i vi ng us
cr azy. Hel p!
Quest i on: I have two accounts in collections. My husband lost his job a
year ago and there is no way we can pay. That doesnt seem to matter to
these people. They just keep calling, even though I have said over and
over that we cant send them any money. We are becoming really
frustrated and were to the point where we hate to answer the phone
because they are becoming more abusive. Is there anything we can do
about this?

Answer : A couple of things: First, it is not a good idea to talk with
collection agents on the phone. These people are highly trained and one
of their purposes is to get you to say things on the phone that they can
use against you. Unless you have had the same training they have had
(Im guessing you havent) you can easily make an important mistake and
you wont even know it.

Second, and maybe more important for you, yes there is something you
can do about this. You can make them stop. Just get the correct mailing
address for the agency and write to them using something along these
lines: I require that you communicate with me only in writing, and only
at the address provided above. You may not contact me by phone at any
time, for any reason. They are required by law (the Fair Debt Collection
Practices Act) to honor this written request, and they usually do.
Ol d col l ect i on i t ems wer e di schar ged, but r emai n on t he
r epor t s.
Quest i on: I have some old collections items listed on my reports that
were discharged in bankruptcy over six years ago. This seems like
overkill to me. Can I have them removed since my bankruptcy is already
on my report?

Answer : You might be able to get them removed, but not for the reason
you raise. Accounts that are discharged in bankruptcy can still show up
legitimately on reports as long as its clear from the entry that the
account was discharged and it shows a zero balance. They definitely
should not appear as open or as currently past due. You can use the
Investigation Letter process for this situation. Provide any proof you have
that the contested item was included in the bankruptcy.

The CAs l aw f i r m i s t hr eat eni ng t o sue me. Is t hi s
l i kel y?
Quest i on: I got a call this afternoon from the collection agencys
attorney. She told me that if I dont agree to the terms she is offering (a
payment plan), she will bring suit in court tomorrow. Can she do that? Is
this legal? Do you think she will do it?

Answer : The answer to Can she do that? is yes. If she is a member of
the bar in the jurisdiction where suit would be brought, she has the
power to do exactly what she is threatening to do. It is legal to threaten
suit in negotiations as long as the threat is made in good faith. What this
means is that attorneys are not allowed to threaten suit when they have
no intention of carrying out the threat.

The more important question is whether she is bluffing. There is no way
for you (or me) to know the answer to that. Thats what makes it such an
effective tactic when it is used. If you are sued, there is at least some
prospect that shell still agree to the deal she is offering now, but she is
going to tell you at first that this deal is off the table. Youll have to make
your own judgment here. If you are sued, you might be able to negotiate
a deal that includes having the suit withdrawn. Youll have to just weigh
things and decide.
I got a comput er pr i nt out f r om t he CA. Is t hat enough
evi dence ?
Quest i on: I sent my CA the Validation Letter that you recommend. They
sent me a copy of a computer printout from their files. There is nothing
here showing that the original creditor even sent them this debt for
collection. This looks pretty flimsy to me. Is it enough?

Answer : The answer to no, its not enough. It looks pretty flimsy to the
Federal Trade Commission too. Some years back the FTC issued an
opinion stating that this tactic is not sufficient to meet a request for
validation. You need to write to the CA again, and this time attach a copy
of that FTC opinion letter. There is a copy of it in the Appendix to The
Credit Solution, and youll also find information there about what to put
in the follow up letter.
What can I do about f our medi cal col l ect i ons t hat ar e 5-
6 year s ol d?
Quest i on: I have four old medical collections items that remain unpaid
and are still on my reports. I assume they will fall off in another year or
two, but I want to buy a house this coming summer. Im afraid that if
these collections remain on my reports this will inflate the interest rate Ill

have to pay on my mortgage. The amounts range from $250 to $1300. I
believe the original creditors (three doctors and a clinic) still own the
debts, even though they have hired a collection agency to try to collect.
What can I do to get rid of these things in the short run?

Answer : I think youre in a strong position to negotiate a pay for
deletion. This is a classic case where that technique has a good chance
for success. I assume that if youre thinking of buying a home and
putting up a down payment (a requirement these days) you have some
cash. Use it to negotiate the best deal you can, and refuse to pay
anything until they agree to delete these items. As old as these items are,
the statute of limitations has probably expired (youll want to confirm
that), so there isnt much they can do to force you to pay at this point.
Chances are theyll look at your proposed payments as found money
and agree to a deletion.
The st at ut e of l i mi t at i ons i s up, but t he i t ems r emai n on
my r epor t s.
Quest i on: I know for a fact that the statute of limitations (three years) has
expired on a couple of unpaid collections on my reports. I wrote to the
CA demanding that they remove these items immediately now that they
no longer have the power to sue me. They replied that the CRAs allow
them to leave the items on my reports. Can they do this?

Answer : Your question highlights a very common misunderstanding of
the relationship between a statute of limitations and the credit reporting
system. The fact that a statute of limitations has expired on a debt has no
effect on the right of a creditor or a collection agency to keep reporting
the debt to CRAs. Nor does it have any effect on the CRAs right to keep
displaying the item on their reports. It only affects the creditors right to
bring suit to collect that debt. Im not surprised you got the answer you
received. Theyre not going to remove the item because the statute has
expired. Of course, now that you know they cant sue you, this opens up
a range of other options, including Validation Letters, Investigation
Letters, and pay for deletion.


Mi scel l aneous Quest i ons:
How do I r emove account s t hat wer e pai d i n set t l ement ?
Quest i on: About two years ago I had an account in collections and I was
able to negotiate a settlement. I thought this meant that the negative
item would be removed from my credit reports, but I was sadly mistaken.
Its still there. What should I have done differently? Is there anything I can
do about this now?

Answer : What you could have done differently is get the creditor to agree
to delete the account from your credit reports as a condition of payment.
This is called pay for deletion. Of course, its too late to do this now
because the account is paid and you have no leverage. At this point, all
you can do is to try getting the item removed. Review the entry carefully
to try to find something about it to dispute. Then use the Investigation
Letter procedure. Thats your best option.
My scor es ar e st uck at 650 or so. I dont know why. Can
you hel p?
Quest i on: I have only one credit card and no debt at all other than my
mortgage. I pay my credit card down to zero every month and Ive never
been late. Still, my scores are around 650 and they just sit there. They
dont budge. Any suggestions about what I can do to raise my scores
would be welcome. Help!

Answer : I can think of a couple of reasons why youre stuck in the mid
600s. First, the best scores go to people who have a long history of using
various kinds of credit responsibly. Youve been very responsible (youre
doing great on that factor), but you have only one loan and only one
credit card. If you had a couple of other cards and an installment loan or
two, youre scores would go up. You can probably get an unsecured
installment loan pretty easily, with your payment history, and you should
consider it. You could just put proceeds aside to fund the payments and
the loan would only cost you a little interest and the transaction costs. I
would also apply for a couple of name brand credit cards. You dont have
to use them much, and if you keep the balances low, youll get the
benefit of a strong utilization rate across several cards instead of just

These steps will increase your scores, and if youre thinking of a major
financed transaction anytime soon (buying a home, refinancing your
current home, or buying a nice car), they will be well worth your trouble.
Youll save a great deal of money if you can get your scores up into the
720 range.

I dont have t i me f or al l t hese st eps. What ar e my
opt i ons?
Quest i on: I need help with my credit, but I just got a new job that
requires a lot of travel. With family responsibilities and my new work
load, I dont have time to do all the things that you recommend to rehab
my credit. Can I hire someone to do this for me? Can I hire you to do it?

Answer : The answer to your first question is yes. You can certainly hire
someone to handle this process for you. In my opinion, an ordinary
person, using the methods that I lay out in The Credit Solution and the
bonus publications that go with it, can get the same credit improvement
results that the professionals can get. Still, I know that not everyone has
the time or the inclination to do this. If youre thinking of hiring
someone, I suggest that you call Lexington Law. They specialize in
helping people with credit problems, and you can talk with them and
decide whether their approach makes sense for you.

The answer to your second question is no. I do my best to contribute to
forums and I try to provide good, sound information; but Im not
available to take on individual cases.
I am goi ng t hr ough a di vor ce. What can I do t o pr ot ect
my cr edi t ?
Quest i on: Im a mother of two teenagers, and right now Im in the middle
of a divorce. The marriage is ending after 18 years. Based on what my
attorney is telling me about my future finances, I can see that the credit
consequences of this divorce might not be good for me at all. What can I
do to protect myself?

Answer : Its true that divorce can have a very negative effect on the
credit of one or both of the parties; but there are steps you can take to
help yourself. This is such a widespread issue that I have put together a
special report called Your Divorce and Your CreditLike Oil and Water,
They Dont Mix. If you have The Credit Solution, you also have access to
this report already. Its one of the bonuses. Just go through it as soon as
you can. You should read the whole report, but the section entitled What
to do if youre in the middle of your divorce is the part that will be most
helpful for you.
Is i t i l l egal t o r emove a negat i ve i t em f r om a cr edi t
r epor t ?
Quest i on: I recently talked with my credit card company about removing
an old negative item from my report. I thought they might be willing to
do it because Ive had the card for years and except for this one problem

my payment history is excellent. They told me that there is nothing they
can do. The man I talked to said that under the law, once a late payment
has been reported there is nothing the creditor can do have it removed.
He said that to remove it would be illegal.

Answer : I believe that what this person told you is false. Im not an
attorney, but I bet he isnt either. The fact is that creditors have negative
items removed from credit reports every day. They do it all the time.
Talking any more with this particular person probably is a waste of time,
but there are other steps you can take to try to get this item removed. I
would write a Goodwill Letter to someone else at the company and see
how that goes. If that fails, you can try challenging the item through the
Investigation Letter process.
Shoul d I use a debt consol i dat i on company?
Quest i on: I simply cant pay all my loans. Ive been out of work for
months, and though I recently started a part time job, there is nowhere
near enough monthly cash flow to handle all my debts. Im considering a
debt consolidation loan. Does that sound like a good idea?

Answer : I generally dont recommend debt consolidation loans unless
youre going to use the money to pay off balances that youve already
negotiated down very significantly from their previous levels. Right now,
with no ability to pay all your debts, youre in a prime position to
negotiate. Youve got some leverage. You can say to your creditors,
Look, Ive been out of work for many months, Im still only working part
time, and I simply cant pay what you say I owe you. I could, however, pay
you $______. A quick look at your credit report today is likely to convince
a creditor that it isnt likely to see any more from you than the amount
offered. Talk to a reputable bank and see if you can get a debt
consolidation loan, and if you can, see how much you can realistically
afford to borrow if all your unsecured debt is paid off. Then youll know
how much money youre trying to divide up among your unsecured
What does pay f or del et i on mean, and when i s i t used?
Quest i on: Ive heard about something called pay for deletion. It sounds
too good to be true. Is it real? When is it used?

Answer : Yes, pay for deletion is a real debt settlement technique. When
you use it, youre essentially saying to a creditor that you will pay a
certain amount to satisfy an old debt, but only if the creditor agrees in
writing to delete any reference to the debt from your credit reports. It can
be used any time youre negotiating with a creditor to satisfy a debt, but

it works best when the statute of limitations has run on the debt and the
creditor knows he cant sue you to collect any of the amount owed.
Woul d t he CRAs r ai se my scor es i f t hey knew why I
coul dnt pay?
Quest i on: I went through a really bad divorce that really hurt my credit.
Before the divorce, my spouse failed to pay on many of our joint debts
and when I found out about it the damage was already done. After that, I
was ill for several months and unable to work. I have always been
responsible with money, and I did the best I could during the divorce and
while I was sick. Im really feeling like a victim. Now that I am working
again, do you think the CRAs would raise my scores to a decent level if
they saw that this is really a hardship case?

Answer : The unfortunate answer to this question is no. The CRAs have
no interest at all in helping people who have been victimized by
unfortunate circumstances. They only have one concern, and that is to
report the information they receive from creditors. Thats it. When it
comes to individual consumers and their problems, the CRAs dont care.

This doesnt mean that you cant improve your credit. It only means that
explaining to the credit reporting agencies why you fell on hard times
isnt going to help you. Now that youre employed again, you should be
able to use the various tools in The Credit Solution to help yourself.
Shoul d I hi r e an at t or ney?
Quest i on: Im really not very good at negotiations and Im not the
aggressive type. Im thinking of hiring an attorney to help me rebuild my
credit. Is that a good idea?

Answer : This can be a good option for people who dont want to deal
with things on their own, for whatever the reason. Its true that
sometimes the lenders, CAs and CRAs dont take individual debtors
seriously at first, and it can take a little while to impress upon them that
youre not going to just quietly go away. If you have an attorney, this can
make a strong first impression and get things moving.

In the end though, if you have the time and energy or if you cant afford
an attorney, you can do just about everything on your own that your
attorney would do for you, except provide experienced courtroom
representation. Just follow the steps in The Credit Solution, use the
Workbook, send out the letters and follow up, and you should get a good

If you do decide that an attorney is the way to go, do it right. DO NOT

stop in at a general practice firm and try to get help there. Credit repair
and debtor representation is a specialty, and it requires knowledge and
experience in that area of the law. Lexington Law is one well- known
option, but there are others. Make sure the firm you hire specializes in
helping people in your situation.