Welcome to The 5 Star Credit Presentation and Introduction
Please follow along with the notes below
- Who we are
- What we do
- Why we are successful
- 5 Star Credit – www.5starcredit.com
- 13 years in business
- 213-923-9999 or 866-720-FICO
- chuck@5starcredit.com
- Paid vs Unpaid
- Dates of last activity
- Renewing dates of last activity
- Reaffirming – confirming you owe the debt
- Speaking on recorded line about the debt
- Paying collections without a deletion letter
- Negotiating the debt on your own
- If they get you to reaffirm the debt the statute of limitations starts over for 4 more years
- Date of last activity is usually with the original creditor unless you reaffirm the debt
- What you should do instead
- When someone says they are on a recorded line – “I do not speak to people on recorded lines and please do not call me again”
- Don’t acknowledge your name, your account, the amount. DO NOT HAVE ANY WORDS WITH THEM AT ALL EXCEPT FOR THE WORDS ABOVE.
- Then hang up – add their phone number to your contact with a note to NOT ANSWER
- Statue of limitations in California
- 4 years from legitimate date of last activity, you cannot be sued, UNLESS YOU REAFFIRM THE DEBT
- 7 years after ORIGINAL date of last activity, it comes off credit report unless it has been reaffirmed
- When the creditor sells it off (charge-off), they no longer have any rights to the debt. They have to turn it over to the collection agency. If they have a commission deal with the collection agency, then the debt still remains with the original creditor
- When creditor gives or sells debt, both the creditor and the collection agency can be on the credit report
- If the first collection agency sells the debt, they must take their name off the credit report immediately but might not show up until the next reporting period
- If we are able to get a collection removed from your report, the money is still owed. It is just not reporting (same for charge offs)
- Renewing dates of last activity
- Ask about Medical Collections
- Medical collections do not get reported to the credit bureaus until they are 6 months old
- Settled vs Deleted
- Settled – pay less than what is actually owed
- If you enter into a settlement agreement, your credit report takes two hits
- Date of last activity renews
- Credit report will say “Paid for less than previously agreed upon”
- Both a & b will cause you to lose points and cause your score to go down
- Deleted – when the creditor will remove all negatives from that account from your report
- if you pay a collection without a written agreement to delete it before payment, your score will drop
- if the creditor will not give you a letter to delete, then I will tell you what to put on the back of the check.
- If the creditor deposits the check with this information included on the back of the check, it is considered an implied contract and it must be deleted
- If you enter into a settlement agreement, your credit report takes two hits
- Settled – pay less than what is actually owed
- Dates of last activity
- Paid vs Unpaid
- Paid – paid the collection after its already been charged off.
- Apply the same rules for deleting the account with collections
- Unpaid – when the debt is still owed after the chargeoff
- Paid – paid the collection after its already been charged off.
- Mortage lates – Can cost 80-100 points from your score in the first few months of that late payment
- Credit card and automobile loan lates – can cost 35-50 points in the first few months of that late payment
- As the late payment gets older, it has less effect on the score
- It is very important that you do not get new lates, because if we have raised your score, the new lates will cause your score to go down again
- Late payments show up on the credit report 30 days after the due date
- Are not actually reported to the bureaus. They are given to a 3rd party that is responsible for reporting to the credit bureaus.
- If we are able to get a public record removed, it generally does not come back onto the credit report. The reason is 3rd parties do not re-report
- Exception is tax liens and judgements
- Types of public records
- Judgments –
- can last for ten years and must be renewed within 9 years and 6 months
- Tax Liens –
- Statute limitations – 10 years from filing date
- State
- Federal
- Child Support
- Alimony
- Judgments –
- Hard inquiry – when you are actually applying for new credit
- Cost 4-5 points on report
- Stays on report for 2 years
- Only affects the score for one year
- So creditors can see how much credit you are trying to get
- Only do one inquiry per month for any credit cards
- Every credit card inquiry is a separate inquiry – no 45 days
- Big Ticket items – 45 days
- Cars
- Boats
- Mortgage
- Land
- RVs
- Airplanes
- DO NOT APPLY FOR CREDIT WHILE WE ARE DOING THIS PROCESS
- Soft inquiry – monitoring your credit or an existing creditor is checking on you
- We use Identity IQ for all of our clients
- You only need 3 – 5 credit cards for an optimal score
- NEVER CLOSE A CREDIT CARD
- Credit cards can be closed by you or the creditor
- Can be closed due to inactivity on the card
- If the card is closed in any way, your score will go down
- To increase your credit score, you should ask for increases to your limit 4 times per year
- Reducing annual fees
- Secured credit cards
- *See authorized users below*
- Chapter 7
- Chapter 11
- Chapter 13
- Student loan consolidation
- Must focus on positive credit as well as negative credit
- Our Company Credit Cards-Authorized Users
- Our Payment Process
- No form Letters
- If an item is removed and it later reappears, we will dispute it again at no extra charge
- If they call you at work or anywhere and you have asked them not to call – $1000 fine for each call instance
- Escrow payment Strategy – for collections that must be paid in order to close escrow
- Strategy for paying down credit cards in order to raise score
- Legal shield
- Credit alert vs credit freeze
- Two types of credit scores
- Fico
- Vantage