The Season to Not Worry About Your Credit!

Well, the Christmas season is here and I imagine many people are out using their credit cards to purchase gifts for loved ones.  It is wonderful to be able to have the credit available to be able to do so.  But many people are not so fortunate, and when I say many, I mean the majority of people.  Credit card companies are being very tight with giving credit, giving decent credit limits, and boy do they love to pack on the fees.

I'm not trying to be a downer, so I apologize if it comes across that way.  What I am actually getting at though, is that it is best to have good credit so when you do use those cards, you are getting the best rates and the highest credit limit possible.  Lower rates save you money and high credit limits are great for improving your credit, if you don't max out the cards. The better the debt ratio, the higher the fico score.

Now, if you have used cards or credit and are struggling to pay the bill, don't fret.  If you are behind on your payments, or you've stopped paying altogether and they have charged off or are getting ready to charge off, more power to you.  I'm not advocating not paying bills, but when the burden is too much and you have more important liabilities that need your hard earned money, credit cards are the last thing you should be paying.  Its much more responsible to pay car payments and rents or mortgage payments than credit card bills.

If you are still paying the bills but are struggling, call them up. Most will give you an extension, and many will actually work out payment plans with you, if even just for a temporary amount of time.  If they have charged off and you are starting to get harassing telephone calls and letters from collectors, you hold the power in your hands.  By the way, what I mean by "harassing", is any call or letter that you just don't care to get. You will need to respond, but only respond in writing.  Don't talk to them on the phone more than you have to.  In other words, tell them that you don't talk business on the phone so they will need to put down in writing and mail something to you.  If they want your address, tell them that since they seem to think you owe them something, they should have your address on some contract you supposedly signed with them.  That's it.  Don't give them any information other than to tell them to put whatever they had to say to you in writing and throw it in the mail.

For those who are now dealing with collectors, or you're pretty sure that you're going to be real soon, you need to know what I'm about to tell you.  If they are not the original creditor, YOU HAVE NO OBLIGATION TO PAY THEM!!  Yes, it looks like I'm shouting but I want you to take notice of what I'm saying.  You DID NOT sign any contract with them.  They are not on your original contract.  They bought an alleged debt that they were not a party to.  They did so voluntarily and they did it on their own behalf, not yours.  The law is very clear about this.  It calls them "Voluntary Payees" when they pay a debt (purchase it) when not asked to do so by you (think Refinance).  

When you are in the above situation, please don't just ignore them, that is hazardous to your wallet, your paycheck, your bank account, and your credit report.  Immediately send them a letter demanding validation. What this means is you need to demand that they prove that they have documentation that shows you entered into an agreement with them.  They don't have it and they can't produce it.  They will try to send you some stuff maybe, like paperwork from the original creditor.  Fine, but that shows a contract between you and the original creditor - NOT THEM!  Usually though, they will send a bill.  When you demand validation, a bill does not meet the criteria.  They have now violated the law. Why? Because, until they provide full, legal validation (which they are incapable of actually doing), they are prohibited from continuing or resuming collection activity.  You have also just given yourself a level of protection against being successfully sued by them,

So, that's my little tidbit for today. Now, go enjoy your shopping, breathe a sigh of relief about trying to pay illegitimate and financially overwhelming obligations.  And, remember the true reason for the season, the real purpose for gift giving - to symbolize God's gift of his Son Jesus, who died to save us.  That's what Christmas is really all about!

Feel free to contact me if you need more information or help with your credit repair.  My contact info is above.