Archive for the ‘fix bad credit reports free’ Category

Medical Billing Errors Can Ruin Your Credit

Thursday, July 24th, 2008

You pay plenty for medical insurance and you count on it to pay your medical bills so you don’t have to worry about them should you get hurt or become ill. Once you’ve covered the co-pay you should be home free.

And you should. But unfortunately that’s not the way it works.

All it takes is for a data entry person to code your claim incorrectly, and your insurer will disallow the claim. In other words, the bills won’t be paid.

Unfortunately, the people doing data entry are generally minimum wage workers who are only “putting in their time” and don’t really care if they make errors, as long as they can get through the day and go home. It really doesn’t concern them if your insurer disallows the claim – or if the doctor or hospital ever gets paid.

So, what happens? There you are, doing your best to recover from illness or injury, and these bills keep arriving. The medical field is notorious for sending garbled bills that require some kind of degree to decipher – and they send them in little spurts, so it’s difficult to see if they’re all different, or duplicates. It’s even hard to figure out if you actually got the treatments they’ve itemized, because they have strange names and codes.

So you set them aside, assuming that eventually all the bills will find their way to your insurance company and will be paid.

Then, after several months or even a couple of years, you begin getting collection letters – and you realize that your credit score is in the basement because of bills you assumed had been paid.

Here’s what to do:
• Get the medical claim number from the collection company
• Call your insurance provider and discuss what the problem was
• Get something in writing from the collections company to delete collection from all 3 credit bureaus after you’ve verified there was a code entered incorrectly.
• Once you receive this letter, mail it via certified mail, along with a dispute letter, to each of the credit reporting agencies listed below. Then be patient, because it takes about 30 days to delete misinformation.
• After 60 days, pull your credit report to make sure all 3 credit reporting agencies have removed the collections.

It’s true that certain lenders disregard medical collections – just as some disregard collections from health clubs because of their unethical practices. However, some creditors will look only at the overall score – and those medical collections will definitely lower your FICO score.

The three major credit reporting agencies:
P.O. Box 740256
Atlanta, GA 30374

P.O. Box 9595
Allen, TX 75013

Trans Union
P.O. Box 2000
Chester, PA 19022-2000

Do you really need to file bankruptcy?

Sunday, July 13th, 2008

Current reports show that bankruptcy filings are at an all time high. This is probably due to the fall of the real estate sector, which affects everything. The way the current bankruptcy law is, does it really protect you and is it necessary? I personally don’t think bankruptcy is necessary for individuals. Bankruptcy for one will destroy your credit report and credit scores. There are two types of bankruptcies for individuals, and they are Chapter 7 and Chapter 13. The most common now with the new law in place is Chapter 13. Chapter 13 forces you to pay back a porting of your debts usually over 5 years to a court appointed trustee. With all the creditors currently having records defaults, you would think that some kind of resolution is in order with the actual creditor on your own. This is actually true; you can call and negotiate with your creditors a lesser balance and a payment plan. Plus if you have retirement funds you don’t have to liquidate them. With bankruptcy you do.

Disadvantages of bankruptcy

If you have wracked up a bunch of unsecured debt, you can assure yourself calls all day from creditors if you don’t pay them. Bankruptcy will stop the calls but it does not change the fact that the negative record will be on your credit report for 7 years if it is Chapter 13. If its chapter 7 it will stay on your credit report for 10 years. So depending on what your situation is, I think in most cases bankruptcy is not necessary. If you have found yourself in financial trouble you can call your creditors and negotiate an affordable payment plans on your own. In most cases you can reduce 40 – 60 percent of what you actually owe to credit card companies with a fixed interest rate and low payments. So do you research before you jump into a bankruptcy and pay a bunch of money to an attorney for no good reason.

Advantages of bankruptcy
If you file bankruptcy the phones calls with stop. It will also stop creditors from taking you to court. You have the option under the bankruptcy laws to file every 6 years. Most lawyers will tell you that the bankruptcy laws are in place not to protect you but the creditor. So keep this in mind. If you are able to file chapter 7 bankruptcy, this will liquidate all your debts with no obligation to pay anything back. This chapter bankruptcy is harder to file now due to the income restrictions. So don’t think bankruptcy is the easy way out now, because its not. I personally think the only advantage is it will stop the harassment from creditors.

Just remember you can negotiate with your creditors yourself, and it cost you nothing but your time. You can also get a payment plan in place you can afford. Creditors will typically work with you to determine a budget over a period of time. Remember you owe this debt; the creditor did not rack up the debt for you. The long term affect of bankruptcy is hard on your credit report vs setting up a payment plan with your creditors and getting them to stop the interest.

There are also other options like debt consolidation. This is could be a alternative as well. Look at your options before jumping into anything.

Life after a Foreclosure

Saturday, July 5th, 2008

Your life during a foreclosure might seem never ending. A foreclosure does affect your credit score report, but the good news is there is life afterwards. If you have fell victim to the Sub-Prim meltdown which caused you to loose your home, I will explain to you how you can recover from this fairly quick. Obviously anytime you have a negative mark on your credit report it will stay on there for 7 years. The positive side is you can implement some good credit management steps to recover.

It will be a minimum of 3 years after foreclosure date before you can buy a house again. FHA and Conventional loans have a 3 year seasoning requirement before they will allow you to get financed. By implementing what I am about to teach you, you can still get your credit in the right direction.

Step 1: Late Payments
Make sure you don’t have anymore late payments on any of your other obligations. Late payments will destroy your credit.

Step 2: Credit
Make sure you have at least 3 lines of credit reporting on your credit report. This could be a couple of credit cards, secured credit cards, car loans, and installment loans.

Step 3: Rental
Make sure you have excellent rental history. Don’t be late on your payments to your landlord. When you get ready go buy a new home in 3 years, this is a must, and make sure the rental payment is fairly close to what you new mortgage payment would be. The reason is if you are ready to buy a home and your rental was $400 to $500 less than your new mortgage payment, the bank will consider that payment shock. So watch this closely.

Step 4: Savings
Save your money, you should have at least 6 months worth of mortgage payments in your savings. The banks like to see that you have the ability to save.

Step 5: Learn from your mistakes
After you have experienced a foreclosure, make sure you don’t have the something happen again. Fair Isaac the creator of the FICO score will forgive credit mistakes, but the new FICO 08 does not forgive repeat offenders too well. So don’t make the same mistakes twice.

Stuff comes up during our little journey here on earth, but we can make matters a lot better with good credit management. If you are not rich, there will come a time where you need to borrow money. It can be a little frustrating when you need a loan and you cannot get one because of bad credit. Once you implement what I have mentioned you will be well on your way to good credit health.

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.