Free Credit Reports In Canada

Free Credit Reports In Canada

How to Clean Up Paid Debts on Your Credit Report?

One's Credit Score is among the most important factors that companies and banking institutions refer to when assessing how trustworthy a borrower is. You would need a clean record to get a major Credit Card or to be approved for various loan packages (including secured Credit Cards, mortgages, and other instruments for financing). You will also need a Higher Credit Score so that you negotiate a good interest rate with your potential creditors. Otherwise, all you are left with is sub-prime lenders and skyrocketing interest rates.
 
When you pay off a current debt, you automatically increase your score because the payment is reflected on the credit report within sixty days. Be sure to check the status of your report and if there is no update 90 days after the payment, you may need to contact the creditor.

Once you call the Credit Card Company, wait until you reach an operator and notify him or her of your recent payment. Express your desire to have the Credit Bureau informed in a timely manner. Fax or send via e-mail the account information to prove your claim. The representative is sure to give you an advice on how to proceed, probably asking you to make a written request.  Whatever the case, you have to obtain a letter from the creditor, which clearly states that the business admits your payment has been made. Keep in touch with the creditor until you make sure they have reported the repaid debt to the credit bureau. The most thorough check in this case is obtaining A Credit Report, which you can get for free once a year from the three major bureaus - Experian, Equifax, and Transunion. Once you have the report, look for a sign of identity theft – sometimes you might find a record of accounts you never opened. In such a case, file a report at the local police department and notify you creditor in writing.  Take a copy of the report with you. The dispute has to be settled by the bureaus in thirty days.

The accounts you have been charged off on needs to be validated. Under the Debt Collection Practices Act, users can ask for the validation of any account, and have it reflected on the credit report.  There is an attractive catch here – if the collection agency does not manage to provide sufficient evidence of your liability, the law states that this debt be removed from the credit report. You may consult with a lawyer if you suspect this is your way out of the deadlock.

A very stressful situation in terms of unpaid debt is when a credit bank gives up on the idea that you are going to pay your dues and sells them to a collection agency. Typically, the bank will be willing to negotiate an alternative payment plan, making it easier for you to keep up with your payments.  If your debt is sold to a collection agency, it will employ all its aggressive collecting methods, including threats of law-suits, calling you all the time and any time. The agency may proceed with a withdrawal of funds from your accounts. Since the collection agency makes profit of charge off accounts, it is in your interest to settle these debts as early as possible. To do that, you have to contact the agency and negotiate a change of your account status in exchange of a settlement payment. Never give them your checking account, though, since they are legally allowed to get everything that is in it to pay off against your bed debts.

 

Disclaimer: This article is provided for educational and informational purposes only and should not be considered a substitute for professional and/or financial advice. The information found in this article is provided "AS IS", and all warranties, express or implied, are disclaimed by the author.

About the Author

I like to write about finance, banking, money, investing and credit. Find out more about debt settlement, and credit cards here.

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nope

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