Friday, March 28, 2014
Capital One Charge Off During Credit Counseling
Lee,
I became unemployed and fell behind on bills. The last priority was credit cards.I talked and worked with these companies the whole time. Luckily, I became employed once again. I joined a legitimate credit counseling service to setup payments. Capital One accepted the counseling services agreement. I have been making payments for a number of months on time and without issue. I recently checked a copy of my credit report, one of the free ones we are entitled to each year. I noticed that Capital One had reported my account as charged off. I called them to confirm this and the representative I spoke with said that was indeed the case. I inquired why it was charged off when I was on an agreement repayment plan. She really had no answer for that but said that there was nothing she could do about it.
I am in a repayment plan for an account I have already been charged off on. Should I stop the payment agreement? Is there any mechanism or circumstance in which the credit card company can recall my debt? Is there anything I can do to urge them to do this? Why and under what authority are they still accepting my payments if indeed my account has been charged off? Should I not be entitled to a full und of these payments?
What I would like to happen is for the credit card company to recall the debt so that I can pay it off and for it not to appear as a charge off on my credit report. Any thoughts, ideas or suggestions would be greatly appreciated.
Robert,
I think most of your questions will be answered by me explaining how a charge off works. When a credit card company charges off your account, it generally sends the account to the companys collection department or sells it to a third party agency. Charge offs occur without fail once you go 180 days without making a payment. A charge off does not mean that the company has discharged the debt and you no longer owe it. Capital One still owns your debt and you still owe it. It just appears in a different place on the companys profit and loss statement this year.
Capital One is still accepting payments because they still own the account. They dont owe you a und because you still owe the debt, regardless of how the debt appears in the company paperwork or on your credit report. Sounds harsh, I know, and I dont mean to be. Just trying to explain how the system works.
The company cant "recall" the debt in the sense that they can retrieve it from a third party because it never went to a third party. They can remove the charge off from your credit report, no matter what they say. Any company with a contract to report information to the credit bureaus has the right to modify or delete that information. Its unlikely, however, that Capital One would modify your credit report and remove the charge off. Not only is it accurate, but theyre receiving regular payments from you. What incentive do they have to modify the account? None.
Thats not to say that you should stop paying the credit card company. Your regular payments are the only thing preventing that charged off account from being turned over to a collection agency. If your account were to get turned over to a collection agency, the collection agency would make yet another note of the debt on your credit report and your credit would suffer further.
Original creditors like Capital One typically only modify credit information in the event they made a mistake. Even if you were to stop paying and offer to resume payments in exchange for a removal of the charge off, the company is more likely to sue you than to remove the charge off from your credit report.
Per federal law, the charge off will disappear on its own 7 years from the date it was charged off. Unfortunately, the charge off doesnt disappear after you pay off the debt in its entirety. The credit card company is required by law to update your credit report to lect the debt was paid once you pay it off. A paid charge off, however, is just as bad for your credit score as an unpaid charge off.
Its a shame that responsible people such as yourself who try to do the right thing and pay their bills have to suffer the same consequences they would have suffered had they simply left the debt alone. You have a small advantage in the sense that you dont have to deal with a collection agency damaging your credit report and harassing you all day and night.
So grit your teeth and keep making those payments until the debt is paid off. The older it gets, the less negative impact it will have on your credit scores.
Now, if you never stopped making payments on the account, it should not have been charged off – regardless of the fact that you were enrolled in credit counseling. If that were the case, the charge off is a legitimate error that Capital One has to address. In that case, I recommend you get the name and contact information for a senior account manager and send a polished, professional business letter explaining that your account was charged off in error and ask that he remedy the situation. Letters always seem to work much better than telephone calls. Best of luck to you.
Lee
Saturday, March 1, 2014
Payday Loans Avoiding Scammers When Looking For One
There is no doubt that the payday loans are the best solution when you are out of cash and are faced with a sudden expenditure. These short-term unsecured loans make for an ideal quick cash fix in times of dire financial needs. And with the payday loan being just a mouse click away today, these loans are also one of the more convenient ways to obtain instant money. Given the advantages that the payday loan offers, it is of little wonder to find that nowadays it is quite commonly obtained by needy individuals. The popularity of this type of a loan is further proved by the fact that there are umpteen such lenders, both online and offline. In fact, so many are the lenders, particularly online, that there is tough competition existing in this business with each lender vying with the other for customer attention.
In such a scenario, it is quite common to find scammers passing of as genuine lenders as they try to earn a quick buck in the name of helping an innocent person financially. When you search for payday loan lenders online, beware of such fraudsters and instead, find an authentic lender who can truly lend you a helping hand. Here are some tips to avoiding scams when looking for a payday loan lender.
How to avoid scams when searching for a Payday Loan Lender
A typical fraudulent action carried out by the scamming lenders is to ask for money even before they lend you some. Usually, money is asked for during the application process under the heads of application fees, insurance and/or taxes. The scamming is done so smoothly that new customers cannot even identify if the website is legitimate or not as even fake testimonials are included to woo them.
The first thing to bear in mind is that you should not be paying money to get money. Particularly, if you are asked for upfront fees you should immediately smell a rat and move onto other lenders. Know that the legitimate lenders do ask for fees but only at the time of repayment. Never trust a lender that asks you to wire money even before your application is approved.
To side-step fake lenders, learn the specific payday loan laws of your state. Additionally, ensure that you avail of the loan only through a registered company. Do not borrow money from lenders that state that credit check can be dispensed with. Always read the loan terms and conditions caully to glean any information related to hidden fees and loan costs. When you are going through the loan contract read the repayment process too, so that you do not end with out-of-budget loan costs. Check if the repayment time can be extended as this will help you tide over any financial emergencies while remitting the loan. It also pays to check your bank, credit and debit card statements regularly to see if you have already been scammed.
Finally, use a secure browser to avoid personal and bank information being leaked out. With these few tips, you can easily avoid payday loans scammers and find a lender who will actually bail you out of a financial crisis.
Sunday, February 9, 2014
Student Loan Consolidation Repayment Options Which One is Right For You
Asking for a student loan is easy, but repaying it can not only difficult but can also extend longer than one might expect. Students who have decided to consolidate their loans find that their original plan of repaying their loans right after they finish their studies are often put on hold for one reason or another. As a solution, they look for student loan consolidation repayment options.
A couple of the most common reasons why students search high and low for repayment options are the inability to land a job right after they graduate, and the lack of sufficient salary to answer for their past student loans. During this time, they have difficulty in fending for themselves, let alone repay their student loans. Student loan consolidation provides them with an opportunity to finally get their finances on the right track and be free from debt sooner than later. Obviously, one of the best ways to do this is to consolidate the repayments so that only one repayment per month is required.
Another one of the many options are to apply for graduate repayment plan, which is designed to start with low repayments that increase gradually until the balance is repaid. Students can specify how much the repayments should increase according to their current financial capability. Practical methods include juggling sideline jobs in order to earn extra income and living below their current means until they can afford to buy things without having to worry about how to cover the current months installment payment. As a last resort, students can apply for forbearance to suspend their repayment obligations in case they are having extreme difficulty in their present financial state.
Sunday, January 12, 2014
Personal Loans With Bad Credit One Rejection Does Not Mean Stop
One of the biggest myths we are led to believe is that rejection of a loan application by one lender means rejection is guaranteed for all others. The truth is that rejection is not a guarantee of continued application failures. In fact, often applications for personal loans with bad credit are rejected for something simple.
What this means is that by simply correcting an error, the application can be approved by another lender. Often, the error is something as small as missing basic criteria, or as straightforward as an unrealistic loan size. It is never down to credit ratings, so getting personal loans approved with poor credit is always possible.
This is not just optimism. Lenders rarely ever know an applicant personally, and so decisions rest on the criteria set and the value of the information provided. Once the basic criteria is met, there can be little surprise that loans with bad credit for personal use are approved.
How Rejection Can Improve Your Chances
It sounds strange but suffering an initial rejection with a personal loan application, can improve your approval chances in the long run. With every rejection comes the chance to fine tune the application.
For example, an application for a loan of $50,000 can be rejected on the simple basis that the applicant has not got a large enough monthly income to make the repayments. However, even with a monthly income of $10,000, this judgement might be made. This is because the judgement takes the debt-to-income ratio in account, a ratio by which lenders go to ensure that a borrower does not overextend their debt.
Basically, personal loans approved with poor credit must leave an income buffer to deal with any sudden expenses. But by reducing the size of a loan for personal use, say $25,000, approval is more likely. It is also possible to apply for two loans of $25,000 to reach the sum needed.
Why Bad Credit is a Minor Factor
It tends to surprise people when they learn that a bad credit rating is not enough to see a loan application fail. This is because a bad credit rating is an evaluation of past facts, and are not reflective of a current attitude. A personal loan with bad credit now might very well be repaid without a hitch.
The credit rating is calculated based on hard facts, but does not take into account the situation surrounding it, so sometimes personal loans approved with bad credit is only just. For example, if someone defaulted on a personal loan last year, it might be because of an unexpected redundancy after the loan was taken out, making repayments impossible.
For this reason, many lenders look for long-standing trends rather than recent instances before ruling on a loan for personal use. So, the actual score does not really matter.
Typical Criteria to Meet
So what are the vital criteria that we must meet when looking for a personal loan with poor credit? Well, they break down into three areas: age, income and citizenship.
Firstly, no-one under the age of 18 is permitted to get a loan, so lenders want ID to confirm that an applicant is not too young.
Secondly, as already mentioned, to get a personal loan approved with poor credit, it is necessary to prove sufficient income is at hand. This usually means providing a copy of a pay slip.
Finally, only US citizens are entitled to seek loans with poor credit for personal use (or any other use) so a passport or social security number is required.
After these three criteria are satisfied, the matter is all but settled. But remember that should the personal loan with bad credit application be rejected, simply go elsewhere. There are hundreds of lenders online.