In order to correct an error in your credit report, you need to inform the reporting agency in writing what information you believe is an error or is incomplete. Below is a sample credit dispute letter.

Your Name

Your Address

Your City, State, Zip Code

Complaint Department

Name of Reporting Agency

Address

City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received. (Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as charge card account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

First get a copy of your credit report from all 3 CRA's(Credit Reporting Agencies). Go over each one line by line, first correcting and disputing any erroneous personal information such as incorrect spelled name, wrong phone numbers, old or incorrect addresses, d.o.b.'s etc. Then look at the TL's(Trade Lines) if you feel as though they are in error or reporting TL's that are not yours, disput this information with the Original Creditor under F.A.C.T.A., or the Collection Agency/Debt Collector under the FDCPA or FCRA directly asking them to validate the information they are currently reporting to your credit reports. Make sure you send all correspondence US Postal Service CMRRR, wait about 15 days, if no response, now dispute it with all 3 CRA's and wait for there response. id the investigations come back verified or updated you now have the Collection Agency for violation of you State and Federal rights as it Relates to the FCRA and FDCPA.

Generally speaking, the estate is responsible for the debts of the decedent. If a person owned any property at the time of their death that property comprises the estate and their estate must be probated. Depending on the size of the estate, many jurisdictions have less formal procedures for small estates. The decedent's debts must be paid before there can be any distribution to the heirs. If the assets of the estate are not sufficient to pay those debts the estate is declared to be insolvent. There is no liability for personal debts if the estate cannot pay. The lender can repossess property in the case of any secured debt such as one for the purchase of an automobile. Of course, in the case of a mortgage, the lender can foreclose and take possession of the property.

Creditors have a statutory period in which to file a claim against the estate. State laws vary. You need to check the laws of your state to determine if any special provisions may apply. In community property states, credit accounts opened in one name during a marriage may automatically become joint accounts. The situation changes in the case of JOINT account holders. If you are a joint account holder or co-signer with the decedent then you will be held responsible for full payment of the outstanding balance.

Note that many creditors will try to get payment from heirs. Check with an attorney before making any payments toward any debt of a decedent. If there is no estate, most creditors will close the account upon the receipt of a death certificate. Once a death certificate is received by the creditor along with a letter explaining that there is no estate, creditors usually forgive the debt, close the account and write it off. In the case of a persistent creditor, an estate may need to be filed even if there is no estate in order to satisfy the creditor that the debtor has died and there is no estate.

If you suspect fraud, you may be asked to sign a statement under oath that you did not make the purchase(s) in question.

• Don't give out your credit card number(s) online unless the site is a secure and reputable site. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but might provide you some assurance.
• Don't trust a site just because it claims to be secure.
• Before using the site, check out the security/encryption software it uses.
• Make sure you are purchasing merchandise from a reputable source.
• Do your homework on the individual or company to ensure that they are legitimate.
• Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
• Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn't required to open the account.
• Consider not purchasing from sellers who won't provide you with this type of information.
• Check with the Better Business Bureau from the seller's area.
• Check out other web sites regarding this person/company.
• Don't judge a person/company by their web site.
• Be cautious when responding to special offers (especially through unsolicited e-mail).
• Be cautious when dealing with individuals/companies from outside your own country.
• The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
• Make sure the transaction is secure when you electronically send your credit card numbers.
• You should also keep a list of all your credit cards and account information along with the card issuer's contact information. If anything looks suspicious or you lose your credit card(s) you should contact the card issuer immediately.

FBI - REPORT INTERNET FRAUD

http://www.ic3.gov/default.aspx

Don't throw anything in the bin that has your name or address on it, protect your card pins at all times if you use your credit cards online make sure that you have the right protection on your PC and make sure you use secure websites. Don't give out personal information over the telephone.

If you suspect credit card fraud, you may be asked to sign a statement under oath that you did not make the purchase(s) in question.

You will need to contact your credit card company - they will walk you through the procedure. They should immediately put a block on your file and report it to the exception files. They may ask you for an affidavit or a police statement. If you're concerned that they're giving you the run-around, you should read up on your rights as a consumer-

Actually, I wouldn't recommend closing your credit card account, closed accounts impact your score and do nothing to help improve it. If you zero balance the card just put it in your sock draw get gas or pay a bill with it once a month and then P.I.F. it when you get the bill, that way your not paying any interest, the credit card companies hate when you do that! LOL It makes you look good it fakes up your score and your utilization of your credit limit is well below the recommended 35%.

From what I understand, if you are closing an account in good standing, it is important to include in your letter a request, stated clearly and in no uncertain terms, that your credit record show YOU were the one to request that your account be closed and NOT your credit card company.

This way in the future anyone needing to check your credit will see this and know that the account was not closed for other reasons that could reflect poorly on your rating.

It might not hurt, as a follow up, to check your credit record. I know sometimes it's recommended to check your credit record yearly in order to check for errors and mistakes.

However, I've also read that you shouldn't check it TOO often because this can adversely affect your record or score.

1) Do you have a history of credit being extended to you? They want to see a long history, which is why you should NEVER close the account for the credit card you've had the longest, even if you never plan to use it again (unless, perhaps, you're paying a yearly fee, but--even then--call them to see if they'll waive the fee; tell them you're thinking of closing your account otherwise): keeping the account open keeps it on your credit history, showing that you've have credit for a while.

2) Do you have multiple types of credit (credit cards, mortgage, car loan, cell phone, student loan, etc.)? They like to see a mix.

3) How much of your credit do you use? They like to see that you use no more than around 30% of the credit available to you. For example, let's say you have two credit cards--one with a $10000 limit, one with a $20000 limit--and so, you have $30000 of available credit. You owe $5000 on the card with a $10000 limit and $0 on the $20000 card. That means you're using about 17% of your available credit ($5000 of $30000). That's fine. But let's say you close your $20000 card. Now, all of a sudden, you're using $5000 of $10000 in available credit--50%. That looks horrible--like you are living beyond your means, getting by on credit, even though you owe THE EXACT SAME AMOUNT OF MONEY as you did when you had $30000 of available credit. But, by closing the account, you jacked up your debt ratio past 30%, making you look like a poor manager of credit. People will be less likely to offer you credit now, and they'll offer you worse interest rates when they do.

So--if you want to close the account, make sure it's for the right reason, such as it's costing you an annual fee. Otherwise, if you can hang on to the card, do it. If you are worried you'll use it when you shouldn't, put it in a bag of water and put the bag in the freezer. That way you'll have to wait for it to thaw before you can use it, which will cut down your impulse purchases.

The best way is to look for a reputable organization that is an approved nonprofit organization. You can check with the IRS to ensure that the organization is tax-exempt. Otherwise, any Debt Consolidation Company can try to sell you on a consolidation option that could make your situation even worse.

No harm looking for a company that is BBB registered.

Look for unresolved complaints in the company's name.

Search the internet for the complaints that company has.

You can look up rippoffreport or search for the company name + complaints/ scam/ review/ feedback.

All these things will always help you make a decision.

Ask the companies to provide some referrences of customers who are already enrolled into the program.

Do not forget to ask the Debt Consolidation company about the drawbacks of the programs.

READ THE AGREEMENTS THEY SEND. The entire world knows that Americans dont read agreements. It is high time we stop trusting what is told to us over the phone. Start reading the agreements and make sure that what ever was told on phone, is that true or not.

And never forget to compare multiple options. There is no harm comparing. It is better to spend more time researching initially than regretting later.

2

You can choose the companies that provide you the consolidation services from some information like consolidation services can help people in debt by either repackaging their debts into one lower-interest loan or by actually reducing the total amount of debt a person owes through negotiating with that person's lenders.

3

You should search first the reviews of debt consolidation loans company to make sure that they were not scam.

4

You should look for a debt consolidation company which is registered with the Better Business Bureau (BBB) and has a good rating. The best rating is A+. Check the BBB to see if there any complaints registered against the company and if there are, whether these issues have been resolved amicably. You should also view the history of a debt consolidation company. If the company is more than 3 years with good standing, it should be a safe bet. You should check with as many companies as you can and see which one can help you settle your debt the quickest, as that would be to your best advantage.

5

Aside from checking its legality, services and capacity You could always check its company background, costumers testimonials, records and current progress. You can also crossed check it compare prices and accuracy, with other companies. If still your not satisfied you can always ask for a free demo from them and see it fits in your needs.

Fix Bad Credit

1. DELETE COLLECTION ACCOUNTS

Did you know that paying a collection account can actually reduce your score? Here's why: credit scoring software reviews credit reports for each account's date of last activity to determine the impact it will have on the overall credit score. When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as "Paid Collection". When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account damages the credit score more severely. This method of credit scoring may seem unfair, but it is something that must be worked around when trying to maximize your score.

How is it possible to pay a collection and maximize your score? The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that the all reporting is withdrawn from credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort.

2. DELETE PAST DUE ACCOUNTS

Within the delinquent accounts on your credit report, there is a column called "Past Due." Credit score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score. If you see an amount in this column, pay the creditor the past due amount reported.

3. DELETE CHARGE OFFS AND LIENS

Charge offs and liens do not affect your credit score when older than 24 months. Therefore, paying an older charge off or a lien will neither help nor damage your credit score. Charge offs and liens within the past 24 months severely damage your credit score. Paying the past due balance, in this case, is very important. In fact, if you have both charged off accounts and collection accounts, but limited funds available, pay the past due balances first, then pay collection agencies that agree to remove all references to credit bureaus second.

4. DELETE LATE PAYMENTS

Contact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account. Be persistent if they refuse to remove the late payments at first, and remind them that you have been a good customer that would deeply appreciate their help. Since most creditors receive calls within a call center, if the representative refuses to make a courtesy adjustment on your account, call back and try again with someone else. Persistence and politeness pays off in this scenario. If you are frustrated, rude, and unclear with your request, you are making it very difficult for them to help you.

5. CHECK YOUR CREDIT LIMIT(S) AND EVENLY DISTRIBUTE BALANCES

Make sure creditors report your credit limits to bureaus. When no limit is reported, credit scoring software scores the account as though your current balance is maxxed out. For example, if you know that you have a $10,000 limit on your credit card, make sure that the limit appears on the credit report. Otherwise, your score will be damaged as severely as if you were carrying a balance of the entire available credit.

Credit scoring software likes to see you carry credit card balances as close to zero as possible. If it is difficult for you to pay down your balances, read the following guidelines to maximize your score as much as possible under the circumstances:

1. There are different degrees that scoring software can impact your score when carrying credit card balances.
2. Balances over 70% of your total credit limit on any card damages your score the most. The next level is 50% of your balance, then 30% of your balance.
3. In order to maximize your score without having to pay down your balances, evenly distribute your credit card balances among all of your credit cards, rather than carry a large balance on one credit card. For example, if you are carrying a $9000 balance on a credit card with a $10000 limit, and you have two other credit cards with a $3000 and $5000 limit, transfer your balances so that you have a $1500 balance on the $3000 limit card, a $2500 balance on the $5000 limit card and a $5000 balance on the $10000 limit card. Evenly distributing your balances will maximize your score.

6. DO NOT CLOSE YOUR CREDIT CARDS

Closing a credit card can hurt your credit score, since doing so affects your debt to available credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit available is $20,000, you are using 50% of your total credit. If you close a credit card with a $5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using 66% of your credit. There are caveats to this rule: if the account was opened within the past two years or if you have over six credit cards.

The magic number of credit card accounts to have in order to maximize your score is between 3 and 5 (although having more will not significantly damage your score). For example, if a card was opened within the past two years and you have over six credit cards, you may close that account. If you have more than six department store cards, close the newest accounts. Otherwise, do not close any at all.

7. BECOME AN AUTHORIZED USER

(Note: Although this tactic is no longer effective for Experian, both Trans Union and Equifax consider authorized user accounts when calculating your credit score.) If you have a short and limited credit history you can ask someone who is a primary account holder to add you to their account as a joint account holder or an authorized user. When added, the primary account holder's credit card will appear on your credit report. Credit scoring software will treat the added account as though it is your account and you will benefit from the low balance and the long payment history for that account. It is important to remember that being an authorized user is helpful for your credit score only if (1) the person is carrying debt below 10% of the credit limit and (2) has had good payment history on the card for seven years or longer. The longer the history, the better. Being an authorized user is potentially detrimental to your credit score if, for example, the primary card holder carries a high balance on the card and has had it less than five years.

8. KEEP YOUR OLD CREDIT CARDS ACTIVE

15% of your credit score is determined by the age of the credit file. Fair Isaac's credit scoring software assumes people who have had credit for a longer time are at less risk of defaulting on payments. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time you've had credit. Use the old card at least once every six months to avoid the account rating to change to "Inactive." Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down. An inactive account is ignored by Fair Isaac's credit scoring software, so you won't get the benefit of the positive payment history and low balance that card may have. The one thing all credit reports with scores over 800 have in common is a credit card that is twenty years old or older. Hold onto those old cards!

Getting Around ChexSystems

When a person applies for an account at a bank that uses Chexsystems and is denied, it shows up as an inquiry on your report. Too many inquiries on your report can cause Chexsystems to "flag" your account for suspicious activity. It is very important to know where you can and can not get an approval at prior to applying at a bank.

Here is more information from WikiAnswers Contributors:

• I was reported to chex system 2 months ago and I'm able to open a second chance Basic Checking account with Compass Bank. It is only $5/month and I get a Visa check card. Lots of banks are starting to offer these kinds of services, you just need to look around. It is a very good way to restart your credit history.

• All banks are linked through the chexsystem as far as I know. If the balance is still owed, you may not find anyone willing to open an account for you until it's paid off. I believe you will be in Chexsystem for five years, then your name will be removed.

• There is hope. What you can do is write Chexsystem a letter stating your story. Depending on circumstances you may not be liable under the Fair Reporting Act.

• Well, I just found out that under most state laws a credit union cannot decline anyone that meets their membership requirements. This means that if you have bad credit they cannot decline you, but they can restrict your services. But if you need a savings account and a place to cash a check then they can do it.

• Second Chance Checking. Check availability in your area, some banks do offer this program for those of us that have outstanding items with chex systems.

There are several online companies that provide help in finding a bank after you've been reported to ChexSystems.

• Wells Fargo offers "opportunity checking" which is targeted for people who are on chexsystems, even if you still owe. There is a $12.00 monthly fee, and $2.00 credit if you get direct deposit.

• Guaranty Bank is one of the few that will open an account if you have 1 or less Chex system reports, as long as you don't owe any money.

To dispute write to:

Mail:

Chex Systems, Inc.

7805 Hudson Road, Suite 100

Woodbury, MN 55125

Phone:

By phone at 800-428-9623 or fax at 602-659-2197

If the reinvestigation does not resolve your dispute, you are entitled to request a brief statement be added to your consumer file outlining the nature of your dispute.

A list of non-chexsystems banks is on chexsystemsvictims.com

There are a few things you should read and understand before you read my answer to this question at the bottom of this response. Today Banks and Credit Card companies will try to bully you into giving a Social Security Number. Some have even begun to state that the Patriot Act requires them to obtain a SSN. This however is NOT TRUE.

Below is the Only Passage within the entire Patriot Act that mentions the phrase "Social Security".

[ Patriot Act ]

If you go to the Social Security Administration government website you'll find that Social Security is a Voluntary program, and only the SSA can require you to give a Social Security Number for the purposes of identification. No American is required to pay into this federally setup Social Security Insurance program, Nor is any American required to apply for or obtain a SSN from the SSA.

That Does Not mean US citizens do not have to pay income taxes.

While it is true that article 16 of the United States Constitution was never properly ratified by Congress, into law, making taxation legal, the federal government has accepted and now enforces income taxation as being true. Therefore all tax codes supported under article 16 come into play.

However nothing within the tax code requires a United States Citizen to have a SSN. The tax code does require US citizens to obtain an Individual Taxation Identification Number in order to pay income taxes, if they do not have a SSN.

A US citizen can obtain an ITIN by contacting the federal Internal Revenue Service. If the IRS asks you for a SSN, tell them you do not have one. Be prepared to provide your US Passport Number.

You can obtain a US passport without a SSN.

To obtain a US Passport without a SSN you will need to mail in a completed DS-11 US Passport Application form with fees, and you will need to include a reissued "Long Form Original Certified Birth Certificate With A Raised Seal". If any part of the DS-11 form asks you for a SSN it is legal under federal guidelines established for the purposes of obtaining a passport to put "000-00-0000." Feel free to call the US federal government's passport division to double check.

Also...

If you have a SSN, that your parent's got for you, and now you don't want one use the link below to find out where to mail a letter of SSN revocation, to terminate your SSN.

Also...

Most states will allow you to obtain a Drivers License without a SSN if you bring a letter sent to you by the SSA stating you are not eligible for a SSN. Which I can assure you, you will get if you terminate your SSN number.

As for the Credit Card Companies and Banks....

It will be an up hill battle. You'll more than likely have to call or go in person. If they attempt to deny you:

[1] Inform them you have terminated your SSN legally in accordance with 20 CFR 3 A7 404.1905, or you do not have one period.

[2] Inform them that the bank can not be held legally responsible by anyone for failing to obtain a SSN from you pursuant to 31 CFR 103.34(a)(1) .

[3] Inform them that under the Internal Revenue Code Section 6041, they are not required to provide any taxpayer identification numbers on the Form 1099 that they file with the IRS at the end of the year.

[4] Inform them that pursuant to 26 CFR 301.6109-1(c) they are under no legal federal or state obligation to obtain a SSN from you, and doing so is actually against federal SSA policy.

[5] Inform them that 42 USC 408 makes it a Felony to use threat, duress, or coercion to try and force a person by fear or deceit to provide a SSN.

They will probably tell you they have to consult their legal team.

With the exception of being told I don't have enough gather-able credit history to offer a line of credit. Every time I have used the aforementioned method with a Bank or Creditor it I've been issued a back account or credit card within 72 hours.

The credit card company will first try to collect from the estate. Creditors are not allowed to put the extra debt baggage on survivors if the estate is insolvent. Creditors will most likely close the account and write it off when they receive the death certificate and has filed a claim in probate towards the estate. Only way the survivors are responsible for the debt is if they want to pay off the debt themselves or if they are the joint owner of the debt.

More Information:

I just went through Probate court with my Grandma's estate and she had no estate to resolve so Creditors had to close the account and write it off. They are not allowed to come after heirs because they are not responsible for the debt because they are not co-owner or a co-debtor on the debt.

If the person who died owns a car and owes money to the bank, then the bank will repossess the car and auction it off. The difference between the loan and how much they got in the auction will determine if they will file a claim on that person who died on their assets to make up the difference.

A satisfied judgment can be taken off your credit, if it is inaccurate. If the judgment is yours, it will remain for the full reporting period allowed by law.

Here is more advice:

• I have a satisfied judgment on my credit report. We satisfied this judgment 5 years ago. However, the plaintiff the judgment was awarded to, never bothered to give the court an order to mark the judgment satisfied. And I didn't know at the time that I could do it myself. I went down to the court Friday and gave them a 'request to vacate judgment' form. I have to wait a week to see if they will do it. If they don't, I'm taking the plaintiff in this judgment to court. I'm going to sue him for the amount of the satisfied judgment times the 5 years it's been reported to the credit bureaus. The credit bureaus are worthless and they are no help at all. They don't investigate anything. I found a lot of interesting websites with lots of info on how to fix errors on your credit report. If you want more info, email me and I'll send you a list of the URLs I found.

• The previous answer was a bit scary. Credit reporting is not the responsibility of the judgment plaintiff, nor the courts, nor the bureaus themselves. If a consumer is sued over financial matters that typically show on a credit report (judgments, tax liens, foreclosures and bankruptcies) those actions need their proper disposition. Obtaining that disposition is not anyone else's responsibility. It is up to the defendant to find out what steps to take to clear their credit. A lawsuit for failing to do so would most likely be unsuccessful.

• The lawsuit that he is speaking of is true and is valid, when and only after you have requested in writing, from the person who has put the Judgement on you, the filing of a satisfaction of Judgement, if they do not file within 14 day of receiving the written request then you can sue for the amount of the Judgement Plus 50 dollars according to California state law Code of Civil Procedure section 116.850. (116.850. (a) If full payment of the judgment is made to the judgment creditor or to the judgment creditor's assignee of record, then immediately upon receipt of payment, the judgment creditor or assignee shall file with the clerk of the court an acknowledgment of satisfaction of the judgment. (b) Any judgment creditor or assignee of record who, after receiving full payment of the judgment and written demand by the judgment debtor, fails without good cause to execute and file an acknowledgment of satisfaction of the judgment with the clerk of the court in which the judgment is entered within 14 days after receiving the request, is liable to the judgment debtor or the judgment debtor's grantees or heirs for all damages sustained by reason of the failure and, in addition, the sum of fifty dollars ($50).)

• Regarding the above note: Successfully petitioning for a Motion to Satisfy Judgement does nothing more than show that the judgment was satisfied within the negative entry in your credit report. It will remain in your Credit Report (showing satisfied) for 7 years as allowed by law. Now, if someone knows in DETAIL (please be specific with your answer along with Links if referenced) how to truly remove a satisfied/paid judgment within the 7 years then please let us all know.

It should be removed automatically after seven years, but even a judgment that's satisfied can't be removed before then. Your credit history - the good and bad - is reported for a period of seven years.

I went through the same situation with a satisfied judgment that wasnt updated by the plaintiff. However, I found the credit bureaus helpful b/c I was able to go online and dispute it through annualcreditreport.com along with other stuff I know I paid. They updated it within a week and I had about 5 accounts updated (even some I know I still owed) I pays to stay on top of your credit, some companies may change names, lenders, go out of business (you never know) So, my advice is to dispute it on your credit report. Anyway, Good Luck with your lawsuit.

I agree with the above. I recently disputed a judgment that was satisfied but it wasn't being reported that way and they just deleted it.

A satisfied judgment should stay on your credit report for 7 years from the last activity. It can only be removed by the court that placed in on your credit report or by the credit bureau reporting it. You can request to both to verify the account is yours and if they judgment is not verified it can be removed.

A satisfied judgment does not have to stay on for 7 years at all. This is a myth. You must understand the law. It states that derogatory entries can stay on your report for 7 years, not mandatory that it will. The key is can stay on!! That part of the FCRA is in place for people who do not check there credit regularly. So it gives a limit to the holder of the debt or plaintiff to pursue resolution to get debt paid!!! To get removed all you have to do is get notice from original plaintiff that through the courts the debt has been paid. They will acknowledge this and get you a statement letter of satisfaction. Take that letter to the court that rendered the Judgement and they will update. The next step is in writing contact the Credit Bureaus and show cause for a dispute! The cause will be that per the original plaintiff the derogatory entry should be moved. They will have to investigate this for you and when they call the original plaintiff they will not respond and the Bureau will remove within 31 days. I have helped people get over 20 judgments removed this way!

The first step that most U.S. banks require to begin the settlement negotiation process is that the customer must be delinquent in his or her monthly payments. So, initially, yes is the answer, as missing monthly payments will reduce your credit score. The longer the payments are missed, the more the score will drop.

However, once you reach a negotiated settlement, the bank will report to the credit bureaus that the account is "paid, settled for less than amount owed." While this doesn't rate your score as high as an "account paid in full" note, you will actually see a rebound in your credit score as accounts are settled because a settled account, even if for less than the total originally owed, is better than an outstanding or delinquent account.

Lastly, if you are considering debt settlement as an option, a better question to ask isn't simply, "Will is lower my credit score," but rather, "Is it worth lowering my credit score to settle the account." If you have a significant amount of debt and know you can save 'thousands' or 'tens of thousands' of dollars through a settlement, it may be worth the extra few points in interest you might pay on a new loan to settle your delinquent debt.

You want the item on the credit report to state, Paid. Do not accept anything less.

Actually, it would be better if you could get them to delete the item when you pay it off. Send them a 'pay for delete' letter via certified mail. If they agree, make sure you have it in writing. I also suggest you offer less than is owed, 35 - 50% of total debt.

Know that your credit scores are marked according to the age of the history. If you are wanting to fix your credit score for a possible loan, do not pay on anything over two years inactive. Doing this will bring the account current and negatively affect your credit score more. If you are looking for long term credit repair (not a loan soon) than pay the charged off account off. There are three main credit bureaus -- Transunion, Experian, and Equifax -- and that they give you a grade on your credit-worthiness according to what your creditors report to them. While each of these three bureaus may have some small variables that differentiate their scoring, the FICO scoring model is still the heart. FICO stands for Fair, Isaac and Company, the group that designed the model. Here is how they say the score breaks down:

• 35% - payment history
• 30% - amounts owed
• 15% - length of credit history
• 10% - types of credit
• 10% - new credit

Getting a credit report is quite simple, but getting your credit score can be much trickier. Make sure any company you pay to send you your credit report is also sending you the credit score, so you know the exact number that lenders are receiving. (Most companies will charge extra to show you the scores.) Credit.com is one place that will send you a credit report and your credit score for free -- but you have to remember to cancel your membership within their 30-day period, and you only receive one of the three bureau's reports. Credit Resource Corp. refers their clients to an Annual Credit Watch Program that will give you 24/7 access to your updated credit reports and credit scores from all three bureaus without causing a HARD INQUIRY. Most delinquencies aren't reported to the credit bureaus until after they are 30 days late. This allows for a small grace period - which is supremely helpful to folks who aren't adept at organization. What's valuable to know is that delinquencies which occurred within the past 2 years are of greater weight than older items. That means that if you see an item sent to collections, it might actually hurt you to pay it off during the loan process if it's more than two years old. Why? Because paying collections will decrease the credit score due to the date of last activity becoming recent. But if you do decide to pay off a collection, MAKE SURE that the creditor gives you a letter of deletion first. If, however, you have any recent accounts with past-due amounts, paying them off immediately will help your credit score. Again, if you do decide to pay off a collection, MAKE SURE that the creditor gives you a letter of deletion first.

Here are more opinions and answers:

• Yes, it could. Although credit card companies may encourage you to settle your debt with the help of a credit counseling service or a debt repayment plan, as an alternative to bankruptcy (where they may get nothing), this step would still become part of your credit history. According to the FTC, "the use of debt counseling may appear on your credit report. Some creditors consider this activity negatively; some may consider it as a positive step."

• In addition to the above, Creditors will sometimes offer you a straight settlement through their collections department (I know, I used to be a collector) and I strongly advise you to NOT TAKE IT. Although it may sound nice to give them a one time payment and be done with it, the debt will show on your credit report as SETTLED. Other lenders will look at that and not be as willing to lend you money down the line (or an apartment, job in finance, etc.) for fear that you will not be willing to repay the full amount you owe them. Credit Management however is only a temporary mark on your credit. As soon as you are done with the program, the mark falls off. Most Credit Management companies will have you sign an agreement that you will not open any more lines of credit or loans while on their program anyway though, so it isn't that big of a deal. No one will be looking at you.
• Relax. Two years from now (2009) greater than 40% of the population will have poor credit scores based on todays credit rating system. This means that the banks will be forced to lower their credit rating standards if they want to obtain new business (lending). Considering that it is the banks who first created the profitable cycle (for them) of organized periods of boom then bust at the expense of Joe citizen, it would be a moral hazard for you to pay them anything. The banks have avoided any recent possible losses by raping the U.S. treasury, your money, and now they want you to continue paying them. This is double dipping. Go ahead and forsake your credit score today because the system will change and in two years you will be allowed credit again.
• Yes, almost anything will for a short time. Your score moves up and down like a

  merry go round. But if you follow the advice above it will bounce back quickly.

  EX- I charged 10.000 in June on a card but paid it in full ex for 5.00 in July, my score went from 748 in June to 720 in July and the to 740 in august.

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