Ignoring your problems may seem like the path of least resistance, but in the end it is much more painful, and will cost you thousands of extra dollars when it come times to get a loan on a house, car or other major purchase.

In our very first Credit Professor Radio show, host Lee Rodrigues talks to credit expert Regis Sauger about why you should fight back.

The show aired live on Wednesday, March 11 from 4-5PM PST (7-8PM EST) at http://www.blogtalkradio.com/Credit-Professor, and you can listen to the archived version here:

This week’s Credit Professor Radio show topics:

How to negotiate your debts.

Make sure you open the letters from bill collectors — they’re funny!

The “Rule of 72“, and why banks don’t want you to have good credit.

The Federal Reserve System, and how we’ve all been brainwashed.

Your creditors don’t even have to come to your door to steal money from you.

How many credit repair services work.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Flickr image by wsssst

Your credit report may be one of the most important documents that you will come across in your lifetime. In my opinion, it is more important than your marriage license, driver’s license, social security card, paycheck or bank statements. Why? Because your credit report determines how much you are going to pay in interest when you want to buy something.

If you have a low credit score, and you don’t care enough to do anything about it — no problem! You will just keep shelling out thousands of extra dollars to pay for high interest rates.

What is a “good” credit score?

There is a lot of talk out there about credit scores, but very few people understand what these magic numbers actually mean.

You probably had a credit score of around 450 when you were born, and in my years of experience, the highest scores I have seen are over just over 800. But these numbers are meaningless unless you understand how they affect your ability to get a new loan.

In general, a credit score of 660 or higher will get you approved for a government-guaranteed mortgage. What if your credit score is lower than that? Well, you can still get approved, but guess what — your mortgage will have a much higher interest rate.

Are you ready to do the work it takes to improve your score? You may be shocked to know that there is one item that will do more damage to your credit score than just about anything else.

Late Payments Kill Your Credit Score

Flickr image by wsssst

The single most important item that will lower your credit score is a recent late payment. I have seen credit scores sink a hundred points in one day (from 690 to 590) because payment on one account showed up as being 30 days late.

And size does not matter! Even if you miss one measly $50 payment, your credit score will drop drastically. Your credit scores will be affected not by the dollar amount of the entry, but by your track record of making payments on time.

Take a look at your credit report. Next to each account, the report shows how often you were 30, 60 or 90 days late in making your payment.

Look For Common Errors In 30, 60 and 90 Day Reporting

It is important to remember that the data in your credit report was entered by humans, and humans do make mistakes. Review your credit report carefully, and double check any instances of making a late payment to be sure they are correct.

What if you look at your report and it shows you as being 90 days late (4) times yet 60 days late (2) times? Now, let’s use some common sense. How can you be 90 days late before you are 60 days late? Not possible. Sorry, you cannot get to third base without passing second base.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Photo by PunkJr

Are you being hounded by collectors? Is the bank threatening foreclosure? Do you have judgments on your credit report?

Studies show that these financial stresses may hurt more than just your credit score!

Debt Stress Can Literally Make You Sick

According to an Associated Press-AOL Health poll, people who reported high levels of debt stress are more likely to suffer from certain illnesses, including:

• ulcers or digestive tract problems
• migraines and other headaches
• severe anxiety
• severe depression
• heart attacks
• muscle tension, including pain in the lower back

People who reported high stress also were much more likely to have trouble concentrating and sleeping, and were more prone to getting upset for no good reason.

Feel Better Starting Today

Are you ready to make the pain go away? Then you need to make a commitment to yourself to start tackling that mountain of debt. It may be daunting, but the rewards are great.

Regis Sauger, author of Get Out Of Credit Prison, tells his readers to take a deep breath, and remember that you only have to do it one step at a time.

“Look at the big picture. You have a big job ahead of you, but look at it as part of a larger financial planning program.

Staying focused on your long-term objective will help keep you from becoming discouraged should you lose a battle here or there. There are many battles in any war; you don’t have to win them all to emerge as the winner.”

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Photo by The Shopping Sherpa

Cleaning up your credit report can take a lot of time, perseverance and creativity.

So what about all of those credit repair businesses out there, promising to clean up your credit report for a fee? Is it worth it? Or should you do it yourself?

It’s important to keep an eye out for companies that contact you with hard sell tactics, outrageous promises and huge fees.

Avoid Credit Repair Scams

An article on MSN Money describes five such “popular approaches for making consumers part with their money with the promise of a better credit rating.” Link to the full story here.

The story also provides a great list of questions to ask before signing up with a credit repair counselor:

• Who is proposing the plan?
  space
• Has this entity had problems before?
  space
• How are they paid, how much and when?
  space
• What’s the downside of this plan?
  space
• Did you contact them or did they contact you?
  space
• What’s the reason for not doing this yourself?
  space

Clean Up Your Credit Report Yourself

Why would you give hundreds of dollars or over a thousand to someone else to clean up your credit when you can do it yourself? As the article points out,

“Thinking of paying someone else to clean up your credit file? Anything they can do, you can do better. And cheaper. But it takes time and dedication.”

If you’ve got the time and dedication, and are ready to get started, Regis Sauger’s e-book “Get Out Of Credit Prison” contains more than 40 strategies for how to legally fix your credit and take your life back.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Photo by cvander

Have you disputed an item on your credit report, only to be ignored by the Credit Bureaus?

Credit Bureaus work hard to discourage you from attempting to restore your credit.  While the Fair Credit Reporting Act (FCRA) legally requires them to give you a chance to dispute an item on your credit report, Credit Bureaus do whatever they can to make it difficult for the average consumer to exercise their rights.

This may come as a shock to you, but the Credit Bureaus do not want you to have good credit because lenders — their customers — make far more profits from people who have low credit scores.

Who Handles Disputed Items On Credit Reports?

Under pressure from Washington, the Credit Bureaus now include a generic dispute form when they mail your credit report to you. In theory, if you see an item on your report that you do not believe is correct, you simply fill out the form and send it back so they can fix it.

Do these forms work? Well, sometimes they do.

But put your imagination to work here for a minute, and place yourself in an office building somewhere in Atlanta, Georgia where you along with another hundred workers do nothing else but respond to credit disputes.

Photo by wbaiv

Now, this is not the highest paid job in the company, and the working conditions are not as plush as the executives on the top floor with a nice view of the Atlanta skyline. In your tiny cubicle, you get a telephone with speed dial and a place to put your purse. You report for work at 8 AM and wait for the guy from the mail room to drop off a big pile of dispute letters from irate consumers who are angry about their bad credit.

Most of these letters are pretty generic, the sort of thing you get from a “credit repair kit” sold at one of the leading discount stores for $19.95. Then there are the nasty letters, the ones that practically shout, “You are the reason for my bad credit”, “My brother-in-law says that by law you must help me” or “I am going to let the air out of your tires, unless you fix my credit.”

What a great job, right? These credit dispute staff come in to work every day to do the same mundane task.  The pay is terrible, and since people quit all the time, half of the workers are still “in training.” Do you really expect your dispute letter will be handled in a highly professional manner?

How Do They Handle Disputes?

Under the Federal Debt Collection Practices Act (FDCPA), you have the right to ask a collector or creditor to prove that the amount owed is accurate. The woman who reads your dispute letter is required by law to “verify the debt”.  She probably already has the phone number of the creditor or the collection agency in her automatic dialer, so she just calls them up and says, “Do you have so and so as a customer”? Then they answer, “Why, yes we do and they owe us $1,543.20.” So she makes a note on your credit report that the account has been verified.

She’s just taking their word over yours, and she never checked any further into the details. Why would she, when she just wants to get to the end of her work day and go to the movies with her boyfriend? This is how many errors end up on credit reports. Even though verification is mandated by law, Credit Bureaus simply do not provide 100% accuracy.

There Are No Credit Cops

Photo by davidsonscott15

How can they get away with this? Well, on the surface, the Credit Bureau in this example has followed the law. The Federal Trade Commission is supposed to enforce these laws, but they often lean toward the side of the credit bureaus, and there are no “credit cops” on patrol to make sure that everything is done correctly.

And in all too many cases, the customer simply gives up and stops trying.  They are counting on you giving up.

You lose unless you fight for your own rights.

To learn more about how to make Credit Bureaus to sit up and take notice of your dispute, check out my e-book, Get Out Of Credit Prison.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.