Frequently Asked Questions

If the bill in question comes from your doctor, and you know your doctor reasonably well, try working out a payment plan. Alternatively, if you have an emergency fund set aside, inquire as to whether the office would accept a reduced settlement lump sum payment in cash. You can also offer to pay a similar amount to what your doctor accepts from major medical insurance companies for similar treatment. If you’re dealing with a hospital bill, contact the billing office and have every charge fully explained to you. No detail on a hospital bill is too small – be fully thorough in your questioning, as this is the best way to guard against any potential billing errors and fraud. If you spot any expensive procedures listed on your hospital bill to which you don’t recall consenting, dispute them with the billing office.

FICO scores, created by the Fair Isaac Corporation, range from 300-850 and are utilized by many lenders. FICO scores above 670 are considered good, with scores above 740 considered excellent.

The VantageScore, which was developed by the three major credit bureaus (Experian, Equifax and TransUnion), also uses a range of 300-850, with scores above 700 considered good and scores above 750 considered excellent.

There are two ways to request free copies of your credit report. Visit https://www.annualcreditreport.com to request a free credit report from each of the three national credit reporting bureaus – Experian, Equifax and TransUnion. At the above website, you have the opportunity to receive a free copy from each bureau every twelve months. Accordingly, it can be a good idea to stagger your free reports throughout the year, rather than requesting all three reports at the same time. You can also request free copies of your credit report by calling 888-574-5454

It is a good idea to periodically view your credit report to ensure it remains an accurate reflection of your debt repayment history. If you do spot any inaccuracies, contact the appropriate credit bureau and initiate a dispute if necessary.

When you order own credit report or check your FICO score online through a credit card company that provides this benefit, there will be no adverse impact on your credit score. However, there can be a mild negative impact to your score if you apply for more than one line of credit within a short period of time.

No – your credit score would go down if you did this. Your credit score is in part determined by your credit utilization ratio – that is, the percentage of available credit that you have actually borrowed. The higher the credit utilization rate, the lower your credit score. Therefore, keeping unused available credit lines open will lower your credit utilization rate, and this is a good thing for your overall credit score and profile.

Late credit card payments will typically remain on your credit report for seven years. For this reason, it is always important to pay your credit card bills in a timely manner each month. For those considering bankruptcy, you should know that a bankruptcy filing will remain on your credit report for ten years.

Above all, get into the habit of consistently paying your bills in a timely manner. If you’re having difficulty making payments, contact your creditors to work out a payment plan or consult with a reputable credit counseling service who can help structure a debt management plan or other viable solution appropriate to your specific financial situation.

If you’re not having difficulty making payments, then work to decrease your total debt load relative to your aggregate available credit lines. Lowering your debt utilization ratio will help raise your credit score. Additionally, you should periodically verify that your credit reports do not include any inaccuracies that may be harming your credit score.

on time. Penalty APR is typically applied for six months and often is significantly higher than the previous interest rate. Avoiding Penalty APR is yet another reason to consistently pay credit card bills in a timely manner.

You may want to consider applying for a secured VISA credit card, one in which you deposit money into a savings account and the card is then used for purchases up to the amount of your deposit. This is an excellent way to begin the process of rebuilding your credit.

A credit card account from fifteen years ago is displayed on my credit report. Are accounts supposed to stay on my credit report for this long?

If you look closely at your credit report, you’ll likely find that credit card account activity from more than ten years ago actually reflects a positive item – namely that you paid your bills on time. Negative items – such as missed payments and late fees – will remain for seven years, while bankruptcies and judgments remain for ten years. If you discover negative items on your credit report that extend beyond these time frames, contact the credit reporting agency that issued the report and dispute the error.

If you and your former spouse opened any joint credit card accounts or other credit lines – including mortgages and auto loans – then you’ve got to stay on top of these situations. Contact each creditor to determine whether you can convert joint accounts into individual accounts, and make every effort possible to remove your former spouse as an authorized user from any credit card accounts that bear your name.

Credit Counseling is a wise option for those who need help getting back on track financially. A skilled, certified credit counselor from a reputable agency will conduct an initial 30-45 minute telephone interview related to your income, expenses and debt levels, before making a determination as to what may be the best solution for your specific financial situation. Common solutions including enrolling in a debt management plan, taking out a debt consolidation loan or pursuing debt settlement.

A debt management plan (DMP) is a common solution for individuals who are carrying too much unsecured credit card debt and are having difficulty paying bills to a number of different creditors each month. A reputable credit counseling agency can structure a DMP for you in which you make one streamlined payment each month to the counseling agency, who in turn allocates funds to your various creditors. All accounts included in a DMP become inactive, and the closing of these accounts will temporarily negatively impact your credit score. However, a DMP will result in a lower blended monthly interest rate and monthly payment while giving you the opportunity to demonstrate a consistent payment history, rebuild your credit profile and get out of debt over a three- to five-year time period.

A debt management plan (DMP) is a common solution for individuals who are carrying too much unsecured credit card debt and are having difficulty paying bills to a number of different creditors each month. A reputable credit counseling agency can structure a DMP for you in which you make one streamlined payment each month to the counseling agency, who in turn allocates funds to your various creditors. All accounts included in a DMP become inactive, and the closing of these accounts will temporarily negatively impact your credit score. However, a DMP will result in a lower blended monthly interest rate and monthly payment while giving you the opportunity to demonstrate a consistent payment history, rebuild your credit profile and get out of debt over a three- to five-year time period.

Debt settlement can be a good idea when a debtor has already fallen behind on a number of different credit card accounts. Creditors recognize that delinquent accounts that are approaching charge-off status may eventually become worthless to them, and are often willing to accept less than the total balance owed as a result. A debt settlement firm may be able to successfully negotiate a lower balance payoff – and even get the creditor to mark the account as “paid in full” on a credit report, though creditors are under no legal obligation to accept settlement offers.
What is bankruptcy and how does it work?

The primary purpose of bankruptcy is to provide a fresh start to those who are unable to pay their debts. Under Chapter 7, debtors may be required to relinquish property that is then sold, the proceeds of which are used to pay creditors. Most remaining debt balances are then discharged. Those declaring bankruptcy under Chapter 13 can typically retain their property, but must commit to a court-ordered repayment plan lasting three to five years.

Declaring Chapter 7 Bankruptcy will discharge most debts, with the exception of some student loans and recently incurred debts. Under Chapter 13 Bankruptcy, an individual is required to repay some debts over a three to five year time frame, after which time remaining balances are erased.

A bankruptcy filing stains a credit report for ten years, and declaring bankruptcy forces a credit score to drop significantly – as much as 200 points or more.

Home equity loans and lines of credit can be utilized to pay off high interest rate unsecured credit card debt, with the underlying property utilized as collateral to secure the loan. Such a loan will often result in lower interest rates and lower monthly payments that are spread out over a longer period of time – often as long as 15-30 years.

Do you have any additional questions that we haven’t addressed here? Please add them in the comments below.