Collection Laws – Top Five Debt Collection Laws and Charge Off Laws

Did you know that there are more than 20 laws that protect somebody with a debt collection or charge off? Here are the top 5 debt collection laws:

Law #1: Right to Counsel

Disputing a collection or charge off with the creditor and credit bureaus can get ugly. Historically, credit bureaus have been fined multiple times for ignoring credit disputes.

A charge off or a collection listing on your credit history is big deal. It can keep you from owning a home, getting loans for transportation, or getting credit for much needed medical care.

That’s why you have the right to hire a credit lawyer who can dispute charge offs on your behalf. (Don’t listen to a credit bureau worker or banker when they say you can’t get credit repair help.)

Law #2: the FCRA

The Fair Credit Reporting Act was enacted in 1970. It is the federal law that regulates consumer information. Along with the Fair Debt Collection Practices Act it exists to protect you, the consumer.

Under the Fair Credit Reporting Act creditors have only a MAX of seven years to report your delinquency to the credit bureaus. – That’s seven years from the time of the original first delinquency.

Seven years is a very long time. You don’t have to wait the entire seven years however. Seven years is the MAX. You can take action at any time to dispute and erase a charge off. Consider sending a dispute letter to the credit bureaus reporting the negative information.

Law #3: State Law

Each state has its own laws regarding statute of limitations and debt. This means each state regulates how much time is allowed for a creditor to sue you for a debt.

You might be surprised to learn that collection agencies sue people every day for charge offs (which then result in judgments) way past the statute of limitations. It is no one’s responsibility but your own to raise the question of statute of limitations.

Law #4: Debt Validation

It is your right to ask a creditor for a validation of debt including charged off debt. If the charged off account is now in the hands of a collection agency, then by law they must provide you with the name of the original creditor and the amount owed.

They might not do this and you’re stuck with the charge off. Debt validation is more advanced for the do-it-yourselfer. I had Lexington Law file debt validation – which worked because the collection agency immediately erased the charge offs. Here’s the debt validation hotline number: 1-800-298-4297.

Law #5: Demand Proof

Even if the creditor/collection agency has provided a validation of the charged off debt, it is your right to request additional proof.

By law they must provide you with a copy of any and all contracts you signed concerning the debt. You can also request them to provide you with a copy of the last bill right before the account was charged off.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

A charge off on your credit report is very damaging to your credit score and your ability to obtain credit. Interpreting the laws and knowing which apply to you can be confusing. To chat with a charge off expert, call this number: 1-800-298-4297. There’s no charge and you’ll get answers you’re looking for.

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Is a 642 a Bad Credit Score?

Have you just checked your credit score online and discovered you have a credit score of 642 (or lower) …now you’re asking yourself: “Is 642 a bad credit score?”

Sadly, the short answer is: Yes.

If you have a credit score of 642 – or anything under 710 for that matter, you’re in for some rough sailing as far as your financial borrowing future. A 642 credit score will undoubtedly impact what you can get credit for including a mortgage, a personal loan, a line of credit or a car loan.

credit image 1 Is a 642 a Bad Credit Score?

I started with a score of 582 - improved to 745 because of Lexington Law

The good news is that things could be much worse for you. I personally had a 582 credit score and used a credit repair service to raise it to 745 inside of 4 months.

What are the credit score ranges?

A credit score, more often referred to as a FICO score (and named after the company that developed it, Fair Isaac & Company) is usually any number 300 and 850.   If you have a higher number, it is easier for lenders to trust that you earn enough money to apply for the loan, and that you will pay it on time. Duh, right.

A “higher” number being in the 700′s.

Lenders sometimes rely solely on your credit score – a simple three digit number – because it saves them a ton of time/money/resources. They can take a 2 second glance and your score and say: “yea, this guy will pay this loan back, or “no, this guy is a huge risk – he’s probably a deadbeat. Denied!”

(As a footnote, banks and other lending companies have always used FICO scores to determine who could be approved for what, but the scores were not shared with the applicant. It is only recently due to pressure from consumers, advocacy groups and Congress that lenders have released these numbers to the general public when they are asked.)

How to quickly improve your 642 credit score

There are many ways to increase your credit score primarily through removing any negative items such as charge offs, collections, judgments, tax liens, late pays, and the list goes on. You can, despite what so-called experts tell you, LEGALLY remove ANY questionable negative credit.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

How do you legally and ethically remove bad credit? It’s simple: you enroll in a law firm sponsored credit repair program. We used Lexington Law which worked quite well. Get a FREE credit consultation with credit repair experts by calling 1-800-298-4297

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What the FTC Says about Credit Repair

If you Google the words “credit repair” you’ll see that the Federal Trade Commission occupies one of the top spots: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

What the FTC Says about Credit Repair

FTC and Credit Repair

The Federal Trade Commission (FTC) protects consumers and has a great deal of helpful information about credit repair services. The FTC gets involved because shady fly-by-night credit repair companies have sullied the reputation of reputable, legitimate credit repair companies.

The FTC has put together a few guidelines on spotting a credit repair scam:

Credit repair is never quick

Any company making the claim that they can fix your credit overnight is being dishonest.

Unfortunately, the process of fixing bad credit is one of the most time consuming, frustrating tasks you will ever tackle. It can take months and even years for some people. (Personally, for us we had good credit again in the 700′s inside of 4 months with help from Lexington Law.)

You may need to make a combined effort of disputing negative listings AND negotiating with creditors to get your score back into the 700 range.

Do not pay large up front fees for credit repair

Is a credit repair company asking you for $2,000 up front? If so, it’s time to run the other way and don’t look back. A large fee like that up front is a red flag for a credit repair scam.

See the Credit Repair Organizations Act for the nitty gritty details of this law. This is a pretty straightforward rule and if you come across a company not abiding by it you should run from it. This is a major red flag that the company is not reputable.

It is illegal to create a new credit identity

Can’t you just start over? Yes! You can improve your credit score with a lot of work, time and maybe some help but it can be done.

What you can’t (legally) do is create a new identity or credit profile. This is illegal! Anyone telling you differently is not reputable and is encouraging you to break the law. A good credit repair service should get you out of hot water not into it!

Beware of misleading claims

Just a glance at some of these credit repair services websites sounds an alarm. The websites read just like a tacky, loud, gimmicky infomercial. “But wait! There’s more!”

This does not give anyone a good first impression. There is nothing professional about how these companies have chosen to represent themselves.

You may decide that having a credit repair expert on your side is the quickest and most trouble free way to dealing with bad credit. If you choose to hire a professional we suggest Lexington Law Firm.

We selected them for two reasons:
1. Lexington Law has a great track record with the BBB;
2. Lexington Law has REAL attorneys – they are not just selling a package of software.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

How did we know we could trust Lexington Law? It was a good sign to see they even have the FTC guidelines disclosed on their website. A credit repair company that divulges their methods of compliance on their website is a great place to start your credit repair journey. Get a FREE credit consultation with credit repair experts by calling 1-800-298-4297

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