Financial Education Services - The Six Worst Items To Appear On Your Credit Report

It's easy to make mistakes or experience hardship when it comes to paying your bills. Some mistakes are so detrimental; want to avoid them at all cost. Since future creditors and lenders use your credit report to make decisions about you, it's important to understand how each of these impact your credit file.

1. Charge-offs

Missing your payments for 6 months or more could cause your creditors to deem your account as uncollectible. When this happens, the creditors write that debt off as a loss against their income taxes. Charged-off accounts are allowed to be reported on your credit report for seven years. Just because a debt is charged off (or written off) does not mean the debt is forgiven. The money is still owed. The creditor will usually sell or assign the debt to a collection agency or a lawyer to effect collection.

Some companies continue to charge interest, but most don't. If they do decide to keep charging interest, they have to continue to report it as income. Most companies would rather just write it off and be done with it.

Having charge offs on your credit report usually results in the consumer being denied credit by other lenders. Even worse, it can also affect the interest rate that other lenders charge on current debts even if those lenders were not impacted by the charge off themselves.

If you find yourself late on your payments, you should always try to contact the lender and let them know you are having problems meeting your financial obligations. Ignoring the situation and letting it get to charge off status always makes it worse. You can usually avoid your account being charged off by at least letting them know you intend to pay and by at least making small payments as often as you can.

It's much easier to get a paid charge off removed from your credit report than it is an unpaid charge off. When you dispute the charge off with the credit bureaus, they have 30 days to verify the account with the creditor. If the account is paid, many times the creditor will just ignore the verification request. They really only report charge off so that they can damage your credit hoping that it will turn make you want to pay them off.

2. Collections

Not only will creditors charge-off your account after a period of non-payment, they may also hire a third-party debt collector to attempt to collect payment from you. Your credit report may or may not be updated to reflect a collection status. Sometimes the debt collector places an entry on your credit report or the original creditor places a note on your report indicating the account is in collection status.

3. Bankruptcy

Filing bankruptcy allows you to legally remove liability for some or all of your debts, depending on the type of bankruptcy you file. Your credit report will reflect each of the accounts you included in your bankruptcy. Even though the bankruptcy information can legally remain on your credit report for seven to 10 years, you can begin rebuilding your credit soon after your debts have been discharged.

4. Foreclosure

If you default on your mortgage loan, your lender will repossess your home and auction it off to recover the amount of the mortgage. This process is known as foreclosure. When your home is foreclosed it can severely damage your credit, limiting your ability to obtain new credit in the future. A foreclosure can remain on your credit report for seven years.

5. Tax liens

When you don't pay property taxes on your home or another piece of property, the government can seize the property and auction it off for the unpaid taxes. Even if your home is foreclosed because of a tax lien, you are still responsible for the mortgage loan. Non-payment of the mortgage will also hurt your credit. Unpaid tax liens can remain on your credit report for 15 years, while paid tax liens remain for 10 years.

6. Lawsuits or judgments

Some creditors may take you to court and sue you for a debt, if other collections fail. If the lawsuit is accurate and a judgment is entered against you, it can remain on your credit report for 7 years from the date of filing, even after you satisfy the judgment.

For information on how you can solve these issues as well as potentially remove them from your credit report please visit United Credit Education Services

Also be sure to review our complete FES Protection Plan

Financial tips for couples

Across the country there are thousands of cheerful couples saying "I do" to a lifetime of love and dedication. You have to wonder how many of these brides and grooms are aware that they could also be saying "I do" to hefty mortgage payments and troubled credit reports. Understanding the financial commitments that come with marriage can help to maintain marital bliss long after the ceremony. Here's what you need to know:

1. Talk About It - Openly discussing your finances with your fiancé is the best way to prevent future disagreements. Talk about your spending habits, your savings and your financial goals so that you will both be on the same page. Develop a plan for managing your money after the wedding. Will you open joint accounts? How much do you want to save each month? Work together to create a money management strategy that fits your needs.

2. Wedding Expenses - Planning the wedding of your dreams can sometimes lead to a nightmare of debt. The average wedding now costs $22,000, according to the Condé Nast Bridal Infobank, a hefty sum that can lead to big credit card bills after the honeymoon ends. Talk with your fiancé about how much you can afford to spend without breaking the bank. Be creative about cutting back your budget: using potted flowers and making the invitations yourself can help you shrink your costs without reducing your style.

3. Credit - Understanding your sweetheart's credit history can help you avoid future surprises. Your fiancé's credit could have a dramatic impact on your rates for co-signed loans and joint accounts in the future. If there are past credit problems, work together to clean things up and reduce debts. Starting your new life together could be a lot smoother with good credit.

4. Joint Accounts - Don't worry, your credit reports won't automatically merge together when you get married. Only when you open a joint account, become an authorized user or co-sign on a loan will a record appear on both your credit reports. Combining your finances this way can be a great way to get the best deal on a major purchase. Be careful though, any negative reporting associated with the account could mean double damage.

5. Love Nest - If you are planning on buying a home together, give yourselves at least six months to save up a down payment and reduce your debt-to-income ratio. A few months of financial improvement can help you save thousands on your mortgage.

6. Stay Focused - Above all else, don't let money problems come in the way of your love for each other. Talk honestly about your financial concerns and work together to get through the hard times. Your relationship is far more valuable than anything money can buy.

For more information contact Mark Bustamonte at 954-707-2932 or visit

Financial Education Services (FES) and FES Protection Plan

Financial Education Services - FES Protection Plan

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Planning for life's uncertainties brings you and your family peace of mind. But a will alone is not enough. You also need a living trust, medical power of attorney, and financial power of attorney.

Protect your finances with FES DebtZero!

SAVE THOUSANDS with the most effective, most efficient debt pay off system available. Get out of debt easier than ever with a clear precise plan that is customized for you.

What is FES DebtZero?

FES DebtZero is a web-based debt acceleration program that provides individuals with personalized direction they need to accelerate the pay off time of all their debts and mortgage. FES DebtZero guarantees that if you follow your personalized instructions you will be 100% out of debt and mortgage free in less than half the time it takes the average person, making regular payments, while saving or gaining thousands of dollars in the process.

Can anybody qualify or use FES DebtZero? Is FES DebtZero right for me?

If you have a checking account, make more money than you spend and have debt that you want to pay off quickly then FES DebtZero will work for you.

How Does FES DebtZero Work?

1. Deposit Income

Deposit your income, as you normally would, into your standard checking account. It doesn't matter if you direct deposit or hand it to a teller. FES DebtZero is a web-based program that is used as a management tool like a navigation system for your finances. Provide the secure FES DebtZero system your financial overview and the system will offer step-by-step direction so you can properly apply optimal payments toward your debt. FES DebtZero directs you on the best quickly pay off your debt that is also conducive to wealth accumulation. The less money that you have to pay on interest, the more money you'll have growing in your account.

2. Follow Prompts

The program looks at your deposited funds, expected expenses, dates they are due, and safely reserves funds for any unexpected expenses. FES DebtZero then analyzes this information and generates monthly prompts that will provide precise directions for paying off 100% of your debt, without any alteration to your existing lifestyle. In other words, you will still be able to enjoy yourself while paying down your debt!

3. Pay Expenses

Continue to use your checking account to make payments to your monthly bills, as they become due. If you currently pay your bills using online bill pay you can continue to do so. You will also use your checking account for daily budgeted spending (i.e. gas, groceries, entertainment etc). Any money that you have not spent is left in your account to accumulate and then used to pay off your debts or mortgage.

For more information contact

Mark Bustamonte Regional Sales Director Financial Education Services 954-707-2932 Direct

Financial Education Services (FES) and FES Protection Plan

What is the definition of accurate information?

This is the $64 question. The Yale University School of Law put together an excellent publication that states, "Consumer reporting agencies must correct or delete inaccurate, incomplete or unverifiable information..."

http://www.yale.edu/hronline/careers/screening/documents/FairCreditReportingAct.pdf This is the first key to understanding what information can be placed on your credit report and which party bears the burden of proof. There are volumes of case law on this subject, but don't expect to see the credit bureaus placed in a negative light when looking for this definition on their websites. This would be like the IRS providing you with a guide on how to fool the tax auditor.

Consumers don't really know what should and should not be on their credit reports and hence, don't have the basis to challenge the information it contains. Look at the class action law suit filed at www.bankruptcydischargesettlement.com. This law suit alleges that bankruptcy debts in particular were manipulated to bring down credit scores more than they would be from the bankruptcy itself. There is a clear advantage to banks and insurance companies who profit from charging higher rates and fees to this class of consumer.

The process of identifying "inaccurate, incomplete, and unverifiable" information is best accomplished by someone who knows exactly what information is being reported. Many times, there can be something as simple as the opening date of the account that is wrong. Be definition, this is inaccurate. If the last activity date is unknown, this is incomplete. If the current balance on a loan cannot be verified, then that information is unverifiable. There are numerous other pieces of data that all fall under this same category.

Your Credit Score Is Yours to Control

Are you confused by credit, and how to create a better credit score? Don't feel bad, many consumers and business people find it hard to understand why their credit score is low. They pay their bills. And when they are a little late on a payment, they pay extra fees to the Lenders to make up for that. The Lenders enjoy great profits, and yet, the Borrower gets penalized more. Is it fair? I say NO! Enough! It's time for us to take control of our credit scores, and get them to reflect accurately, what kind of people we really are. In fact, the United States government agrees. Toady, there are laws to protect us, and allow us to take back control of our credit histories and credit scores.

Use these laws to make sure you aren't forced to pay more for auto loans, credit cards, mortgages, insurance and utilities. Besides costing you more money in monthly bills, we've been hearing more about people who get job offers that are later taken back, because of a "bad" credit score, a result of having been out of work for a year or longer. They didn't use credit to support a luxurious lifestyle. Ironically, they are penalized by taking away the very thing that they need to get back on their feet and to get back to paying their bills. Is it just me, or does it seem ridiculous to you as well? Credit reporting agencies, and Lenders, seem to believe that it's their right to penalize consumers to any level that they choose. The US government says it isn't their right. It is their right to report late payments and defaults on payment agreements, to the extent that they report it accurately. Is the information on your credit report accurate?

Frits Tessers is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Personal Coaching for more information on Frits Tessers.

Credit Reporting Guidelines

Below are some very important credit reporting guideline that you as a consumer should be aware of.

The Fair Credit Reporting Act (FCRA) was designed to promote accuracy and to ensure that the credit reporting agencies maintain precise information regarding consumer credit.

The Federal Trade Commission (FTC) enforces the FCRA and is the watchdog over the three credit reporting agencies. The FTC enforces fines and may shut down any business that does not operate in compliance with the FCRA.

The FTC stipulates the maximum length of time a negative item can stay on a consumer's credit report is 7 years, unless it is a Public Record. Bankruptcy and other public records may be legally allowed to remain on the credit report for 10 years.

The Credit Reporting Agencies have 30 days to investigate our challenges according to the FCRA. The agencies can verify, modify, or delete a negative item in question. If a creditor takes longer than 30 days to respond back to the CRA for their request for investigation, the information should be automatically deleted.

It is important to note that the agencies are allowed to temporarily delay sending the consumers back their updates by sending a notification within the 30 days that they have received the requests and an investigation is pending.

The FTC also regulates the Fair Credit Billing Act (FCBA), which is designed to protect consumers from inaccurate information by their original creditors. The FCBA states that the consumer is not liable for unauthorized charges and other billing mistakes by their original creditor. The FCBA also states that that the original creditor is responsible for verification of any adverse account that the consumer challenges, and also responsible for any illegal activities by third party collection agencies that the original creditor assigns the account to.

The FCBA bounds original creditors to correct inaccurate reporting of information to the credit reporting agencies.

Fair, Isaac and Company of California originally developed the concept of the credit scoring model for use by financial institutions. Today, most credit agencies and lenders calculate your credit score (FICO) based on their formula.

Credit scores are being used increasingly by potential employers as a considering factor for hiring.

Credit scores are now being used on a small scale to determine auto insurance and utility rates.

The credit score is a computation of many different factors, including payment history, proportion of debt to available credit, and amount of credit used.

The length of a consumer's credit history counts towards 15% of consumer credit scores.

A consumer's payment history counts towards 35% of credit scores.

The type of credit a consumer has open determines 10% of their credit score. The different types of credit include: secured - mortgages, unsecured/revolving - credit cards, installment - car payments and small home improvement loans.

In calculating credit scores, the amount owed is an important indicator of a consumer's credit worthiness, and equates to 30% of their credit score. If a consumer is carrying high balances on many accounts, creditors may see this as a sign of financial overextension, or possibly irresponsible credit use,  and may assign the consumer a high risk. Consumers should make every attempt to keep account balances at 35% of their allowable credit limit.

The amount of newly established credit accounts for 10% of the credit score.

The best way for a consumer with little or no credit history to establish good credit is by applying for a secured credit card and making the payments on time.

For more information go to: Credit Reporting Guidelines

How to Establish Good Credit

When you have little or no credit history, applying for loans and credit can be difficult, if not impossible. Lenders like to see a record of payment history and a current credit score before they extend credit or loans. This information also helps them determine what interest rate to offer. If you do not have a credit history, here are some ways to build it one: Understand What Lenders Are Looking For If you are looking to establish credit for the first time, lenders can't look to your credit score to decide whether or not to lend you money. In these situations they have to examine other factors that can help them decide if you are a good credit risk or not. Here are basic guidelines to follow to establish or re-establish your credit: 1) First and foremost, pay any bills that come your way on time. 2) If you don't have a checking account, open one. You have very little credibility with lenders if you don't have at least a checking account and preferably a savings account as well. Just as importantly, be sure not to overdraw your bank account. Bouncing checks sends a signal to potential lenders that you can't manage your daily finances and are therefore not a good credit risk. 3) Establishing a relationship with a bank will improve your chances in obtaining a loan or credit card through them. If you already do business with a bank, they should be the first place to look. 4) Open a charge card with a local department store or apply for a gasoline credit card. Pay off the entire balance each month. Remember, if you cannot pay off the balance each month, you are spending outside your means. 5) Keep in mind that a lender or creditor may say you are approved for a particular amount, but that does not mean you have the resources to repay it quickly. Borrow only what you can afford to repay quickly. 6) Another important factor lenders look at is your employment history. They want to see if you are able to hold a job or if there are periods of unemployment. Your ability to hold a steady job can improve the likelihood of getting approved. 7) Lenders will also look to see how often you move and whether you rent or own. As with employment history, it pays to have a stable residence. 8) Even without a credit history, it is possible to sign up for many utilities in your own name. Having an electric or gas bill, telephone, cable, or water service in your name also helps. Just having your name on these accounts won't establish a credit score, but it can be helpful for first-time borrowers. 9) Get a secured credit card. To obtain this type of card, you deposit a specified amount of money into a financial institution who will then issue you a bank credit card. The amount you deposit is your credit limit. After you maintain that account in good standing for a while, you may be able to obtain a regular credit card or loan. Establishing Credit is Only the First Step Establishing a good credit history takes time. There are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months.