Author: Ron

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Is This Collection Real?

Is This Collection Real?

How Do I Know Who To Pay?

It’s a fairly simple process to tell when you owe money to a debt collector: they’re usually wearing out your phone with calls and voicemail messages, right?  They may also be sending notices by mail or, in some cases, email. But what about those collectors that are harassing and/or source site threatening you?  I mean, really, really threatening you, as in telling you to pay up right now or bad things are going to happen. Or as in they are threatening to send out the Sheriff’s deputy to serve papers at your place of work.  Or as in the collector telling you that you committed check fraud by taking out a payday loan and setting up payments by checking account and then bouncing the checks.  Yes, our Clients have heard all of these, and more!

What can you do to protect yourself?


Call the Original Creditor

If you’re receiving calls from a Debt Collector, you may be able to trace the chain of title.  Normally, you would begin by calling the Original Creditor (the creditor that originally loaned you the money) and find out what happened to the account.  If the Original Creditor no longer has the account, they should be able to provide you information of what they did with the account.  This will help you begin to trace ownership, until you find who currently owns the debt.


Review Your Phone Records

Check your missed calls and voicemails for the phone numbers of any Debt Collectors who are calling you.  Then search the Internet for information about the company contacting you to help determine whether or not they are legitimate collectors and conduct business in a professional manner.


Contact Me

If you’re receiving threatening or harassing phone calls from a Debt Collector, the first thing I recommend is that you DO NOT PANIC!  I’ve had several Clients that paid hundreds of dollars to Debt Collectors to avoid having nonexistent papers served or to stop the collector from contacting their place of employment.  In most cases, the Client was able to cancel the payment if they acted quickly.

For more info on dealing with collectors, check out these pages on our site:
What To Do When a Debt Collector Calls
Debt Collectors Busted


If you are receiving calls from a Debt Collector and would like to discuss, give me a call or shoot me an email.


Ron Reed
FDCPA Compliance Director
National Credit Solutions

214.504.7102 DIRECT

Disclaimer: This site is for educational purposes and is not a substitute for legal advice. The material on this site is not intended to provide legal, investment, or financial advice. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

“Is this collection legitimate?”

***Update: Our Client, Rhonda, received $1,500 in her pocket, plus had the $2,000 debt forgiven, as well as saving the $2,000 she would’ve paid the collector!

Legitimate Collection? 

There aren’t too many jobs out there that allow you to help your Clients and lots of times not only save them money but make them money.  Case in point:  A couple of weeks ago, I’m working on several cases of FDCPA violations for some of our clients.  (By the way, FDCPA stands for Fair Debt Collection Practices Act, the set of laws that govern Collectors and how theyLegitimate Collection? communicate with debtors.)  One of my duties at NCS is to talk with Clients who have been receiving calls and/or voice mail messages from Debt Collectors and determine if there may be violations of the FDCPA and if the collection is legitimate.  If there appears to be a violation or the debt is not legitimate, then I begin to gather evidence and put a case together.

Anyway, as I’m working, an email from one of my clients, whom I will call Rhonda, appears in my inbox.  She had forwarded a collection offer that she had received by email and said, “Hi Ron, is this collection legitimate? Should I pay it?”  The offer was for the settlement of a debt totaling approximately $9,000.00 for only $2,000.00.  A great deal, right?  Problem is, Rhonda really didn’t know any of the details about this debt.  I suggested that we do a little research and get some information before paying.

Well, we did some fairly extensive research and, as it turns out, Rhonda came to the realization that the debt is probably not hers.  Not only that, in communicating with the Collection company, there were several violations:  1) No Mini-Miranda statement on at least one call and one voice mail message,  2)  A veiled threat of legal action, and 3) Stating that when paid the account would be removed from her credit report.  The problem with #3 is, the account isn’t on her credit report and the debt is so old that they can’t put it on anyway.

Rhonda admitted that, had I not cautioned her to do some research before paying, she would’ve gone ahead and paid the debt and been out the $2,000.  Okay, so saving her $2,000 is pretty cool, but check this out:  I turned the information that Rhonda and I had gathered over to the attorney that we refer our FDCPA cases to.  He has now filed suit in Federal Court on Rhonda’s behalf for the above-mentioned violations!  So hopefully Rhonda will soon be receiving a settlement from the Collector–all at no cost to her!  I will update this blog as soon as I know the results of the lawsuit.

See why I love my job?

Best Regards,

Ron Reed
FDCPA Compliance Director

National Credit Solutions
214.504.7102 DIRECT


NOTE:  How do you know if the collection calls or voice mail messages you are receiving are legitimate?  Give me a call at 214.504.7102 or email me at R.Reed@NCS700.COM.



Debt Collectors Contacting You?

Are Debt Collectors Contacting You?

If Debt Collectors are contacting you, National Credit Solutions is here to help. Illegal collection attempts can result in debt collectors paying you for violating your rights, and possibly canceling and deleting the debt from your credit file—all at no cost to you!    Are you getting Voicemail Messages that sound 100% Legal?


Actual Case Results from some of our Clients:

Here are some actual results of the work we do while assisting our Clients in fighting back against bad debt collectors, at absolutely no upfront cost to them. The amounts shown are the approximate amounts received by our Clients:

JEREMY – One collector called Jeremy a “deadbeat” and threatened to sue him. Another agency threatened to sue Jeremy and have him served with the lawsuit in front of his co-workers. RESULT: 2 Cases with approximately $7,500 in his pocket.

JOHN – One collector left a voice mail message threatening a lawsuit. Another collection agency threatened to garnish John’s wages without judicial proceedings. Another agency implied that it was a law firm. RESULT: 3 Cases with approximately $10,000 in John’s bank account!

JULIA – Received a call from a Debt Collector who implied that he was a ‘process server’ and that a lawsuit had been filed against her. RESULT: Approximately $3,300 in Julia’s bank account, plus forgiveness and removal of the $11,000 collection account!

TAMMY – Tammy had disputed an account on her credit report that she had paid but still showed a balance. The Credit Reporting Agencies, Original Creditor, and Debt Buyer ignored her disputes. RESULT: 1 Case with approximately $8,500 paid to Tammy!

MIKE – When the collector and the collector’s supervisor both told Mike that his $8,500 apartment collection would show up on his Renter’s Report indefinitely, they had violated the Fair Credit Reporting Act and the Fair Debt Practices Act. RESULT: Forgiveness of the $8,500 apartment collection, removal from Mike’s credit report and $750 in his pocket to pay the $1,100 judgement from the owner of the apartment.

JOHN – After a lot of digging, we found four lawsuits for this client based on illegal collection practices that were being used against him.  One collector called an ex-wife and discussed the debt and two others failed to inform John that the calls were from a debt collector.  While one of these claims remains open, three claims have resulted in a net payment to John in the amount of about $2,500, cancellation of approximately $5,600 in debts and removal of two items from his credit report.

These are just a few of the dozens of National Credit Solutions’ Clients that have received not only settlements but also peace of mind! There are many more examples just like this.

 If you are currently receiving calls from a Debt Collector:
  • Have you been threatened or harassed by a collector?
  • Do Collectors call relatives, co-workers or neighbors?
  • Do they give you the Mini Miranda statement (purpose of the call is for the collection of a debt and any info obtained can be used for that purpose) each and every time they communicate with you by phone, mail or email?
  • Do Collectors call you before 8:00 AM or after 9:00 PM local time?
  • When Collectors call, do you speak with them?
  • Do you currently have voice mail messages from Collectors?


If you’ve received collection calls or voice mail messages that are similar to these calls and would like more information, please give me a call at (214) 504-7102 or by email.


Ron Reed
FDCPA Compliance Director
National Credit Solutions
(214) 504-7102 DIRECT


*Some of our Clients have been paid and/or had items removed from their credit report by the collection agencies that harassed them.

Credit Scores 101

Credit Scores 101

Credit Scores 101

“I got my credit score when I closed on my house, it was 726. I got my score from the electric company and its 478. How did my score drop so much? Is there something wrong?”

Have you ever experienced this situation? Like many Americans, the credit score is all they hear when it comes to credit; however, most consumers don’t truly understand what the score means. The purpose of this article is to give you a better understanding of scores so that you better understand how banks make decisions.

First let us define a credit score. A credit score, simply put, is a numerical reflection of what is contained in your consumer credit report.  It is used to predict future events. The meaning of that number is something we will venture into in a bit, but before we do that lets go over the different types of scores. There are three types of scores that banks and lenders may use. There is a risk score, which is used to gauge risk for the bank on how likely you are to pay them. That is most likely the score you’re most familiar with. The other two types of credit-scores-101-5score are less common since you may never see one, they are: A bankruptcy score, which is used to determine how likely you are to file for bankruptcy, and a profitability score, which is used to determine if the entity you are trying to borrow from or are borrowing from is able to make money off of the service your applying for or have with them.

We will start with risk scores as they are the scores you will most likely see and use. Risk for a bank is basically them determining how likely you are to pay them back or make on time payments. It’s used to determine future risk based on what is on your credit report at the time it was scored. Being high risk to a bank is having a low credit score. A low credit score is basically saying the bank has less faith that you will pay on time or pay them back. As a result, you may get higher interest rates or be charged a deposit or get denied all together. On the other end, being low risk to a bank facilitates in getting better interest rates and not being charged extra fees and deposits. The benefit is obvious; being less risky saves you money.

So what makes up a risk score? I will get into that in a moment because the answer is not as simple as it might seem. Before I do, I want to clarify some misconceptions. Most people assume that because there are three major credit reporting agencies (Equifax, Experian, Trans Union), then you only have three credit scores, one from each agency. That is not actually the case. There are hundreds to thousands of different credit score models. Each bank or lender you apply with has the option to use whichever score model they choose. You could therefore go to bank ABC and apply, they would access your report and grade it 655. You could then go to XYZ bank next door, apply for credit and get a 607. Both banks accessed your same report, but they used different ways to calculate risk. It gives the appearance that the credit score went down but in reality it did not.

credit-scores-101-4An easy way to understand this is a comparison I use with credit scores to temperature. Here in the United States, most people are familiar with and use the Fahrenheit scale to determine if its jacket weather or not. Let us say you want to take trip to Europe and want to know how to pack. You check the weather in Europe and see that its 36° on the dates that you want to travel. You then decide to pack a heavy coat since 36° is near freezing, right? You board your plane, fly across the ocean, then disembark and realize it is shorts weather. What happened? Was the weather report wrong? The weather report was accurate, Europeans just tell temperature differently. They use the Celsius scale over there.  Therefore, if you had actually converted °C to °F you would have known that it was 97° there and packed shorts. You will not be able to convert score models to other score models since you do not have the algorithms used to create them; however, you now know they can be different depending on where you go. The disadvantage to this is that you do not really know what your score is until you apply for credit. The advantage is that since lenders grade you differently, you could get a better interest rate with one bank vs. another. You can also get an approval from a bank for a loan where another would not.

Now that we know that no two scores are identical, let us delve into what makes up the score. As I stated earlier, scores are made up of what is contained on your credit report. What is on a credit report then? A report contains three parts: your credit cards, loans, other debt, and public records; a list of entities that have looked at your report, more commonly known as credit inquiries; and your personal information (Names and aliases, addresses, employment history, DOB, spouse, and telephone numbers). With respect to your score, the only parts that affect it would be the first two sections mentioned above. Also, with inquiries, only the hard inquiries (inquiries for credit applications) can affect your score. Soft inquiries (when you check your report, account reviews, and pre-approvals) do not.

The Five Main Ingredients in Your Credit Score

There are five things that a credit score weighs based on the information found in the report. They are: payment history, amounts owed, length of credit history, types of credit, and new credit. I have this listed in order of what is weighted greatest to least. You can also look at the chart below to get an idea of how they are weighted with a basic FICO score. We will go over what FICO is further down.

Payment history is usually what’s weighted the most on your report. It includes accounts you’ve paid on time. Those bring value to your credit score. It will also include any late credit-scores-101-3payments you’ve acquired, any derogatory items (charge offs, collections, repossessions, etc.), or any public records (bankruptcy, tax lien, civil suit) that may have been filed in the courts. These items may negatively impact your score.

Amounts owed are basically your balances and how they compare to the credit limits or original loan amounts. To increase value here, you’ll want to keep your balances as low as possible with you limits as high as possible with respect to your credit cards and other revolving accounts. With loans, just continue to pay your monthly amount due. This will lower the balance and increase the distance from the original amount. Paying off large chunks on an installment loan won’t necessarily raise your score. The reason for that is explained next.

Length of credit history is the length of time items on your accounts have been open and active and the length of time since the last activity. The longer an item is on your report and in use, the more valuable it is to you, as long as it is a positively reporting account. credit-scores-101-2Closed or inactive accounts lose their value over time. Therefore, a good account that was opened for 10 years and then closed still helps your score; however, as time passes it helps it less and less. That is why it is important to continually use your credit and be judicious about closing accounts. With regards to amount owed, when paying your monthly payments on an installment loan, you are building positive payment history over the life of that loan. For example: You have a loan for $600 dollars and a term of one year.  Keeping it simple we will not do any interest calculations. Your payments come out to $50 a month over the 12 month term.  Let us say that you can pay it off in two months. That basically created 2 months of positive payment history. Now the value of that account begins to depreciate since it is paid and closed. On the other hand, if you pay it over the entire term, it shows 12 months of positive payment history before it begins to age. Keep in mind we are just speaking about credit scores and maintaining them. You aren’t required to wait the term if you do not want to. This is just to give an understanding of how a bank looks at your information on the report. In most cases, to a bank, paying a loan off more quickly does not look any better to them.

Type of credit is basically your credit mix. Banks and lenders like to see a variety of examples of how you use credit. By having only credit cards on your report, it doesn’t give a good picture of how you handle installment loans. It works the other way too. Continually using different types of credit is the best practice here. You want your credit report to look like a decathlete, not just a sprinter or hurdler.

New credit is the last piece of the puzzle. This refers to your new accounts and the credit inquires for new accounts. New accounts do not have any credit history associated with them, so they generally don’t add any points. They may actually take some away, since new credit usually includes new debt. Also your credit inquires factor in. How often you apply for new lines of credit can hurt your score. You may wonder why that would affect your score negatively. Remember that the score is to calculate risk. Inquiries to a creditor look risky for two credit-scores-101reasons: First, depending on how long ago the inquiry occurred, the end result may or may not be on the report. Since the creditor may not know the result of recent inquiries, they are making a decision on unknown information. For example, let’s say you apply for a Macy’s card. You get the card, make some purchases, and then max it out that same day. A few hours later you apply for a Target card. Target National Bank accesses the credit report and sees an inquiry from Department Store National Bank Macy’s. They notice it was done the same day. They don’t know that you just maxed out the card. They don’t even know if you were approved. That is why the inquiry can hurt your score; the result of it is unknown. The second reason is that multiple inquiries in a short time period may indicate financial duress. If a lender looks at your report and sees you applied at American Express, Bank of America, Discover, US Bank, etc. they may wonder why you need so many accounts in a short period of time. It may be that you just wanted to have an account from each one of those banks, but the lender doesn’t know that. To them it looks like you need money immediately. To them it looks more risky and your score decreases.

There are a few fail safes built into scores with regards to inquiries also. You have probably been trying to get a mortgage loan or auto loan and noticed multiple inquiries. Many scoring models take into account when buying a house or purchasing a home that you may need to shop around. For that reason, some models will limit the effect the inquiries will have on the score. They do this by counting them as a single inquiry when within a short time period or weigh it differently.

Now that we’ve covered what goes into a risk scores, let us go over a few of the scores you may see or use. We will start with FICO. This is the score most people are familiar with. You may have heard that term from a bank when working with them or from a news program covering credit. FICO is a an acronym for Fair Isaac & Co. It is basically the name of the company that created it. Fair, Isaac & Co actually has over 20 different models. The standard FICO score has a range of 300-850. In most cases that is the score you will be dealing with. It also can be under a few different names depending on which bureaus report it is applied to, namely: Beacon on an Equifax report, Experian Fair Isaac ver. 2 or 3 on an Experian report, and Empirica or FICO Classic for a Trans Union report. You may see modified versions of the basic FICO also. Since every bank is different, they may tweak the FICO score to their business needs.  Because they may modify the model, the ranges used and the significance of the 5 things that make up the score may be weighted differently. That practice isn’t exclusive to Fair, Isaac & Co either, most scoring vendors will have the score modified to their clients’ needs.  Even if two banks give you a FICO score, they may use different variations of the Fair Isaac’s model.

Some other scores you may have seen are PLUS, Vantage 1.0 and 2.0, and TEC.  There are actually too many to list.  Just keep in mind that every score has a name, the credit bureaus don’t track your score, and scores can come from a variety of different sources, not just the bureaus. Now that we understand differences let’s transition into score factors.

Scoring Factors

Have you ever gotten a denial letter for credit? If you have you know what they look like. If not, let me go over the verbiage of one with you. It goes something like this:

Dear {Your Name Here}

We regret to inform you that we were not able to open an account with you. The decision we took was made in whole or in part from a report obtained from {Credit Bureau Name}. You have the right to obtain a credit report from {Credit Bureau Name} within 60 days of this notice.

{Credit Bureau Name}

{Credit Bureau Address}

{Credit Bureau website and phone number}


Your Score is XXX

Factors that adversely affected your score are as follows:

  1.         Xxxxxxxxxxxxxx
  2.         Xxxxxxxxxxxxxx
  3.         Xxxxxxxxxxxxxx
  4.         Xxxxxxxxxxxxxx
  5.         Xxxxxxxxxxxxxx



{The Bank that denied you}


In the above example, you see the bank used your credit report and used a credit score, but what are factors mentioned in the letter? Those are called scoring factors. Scoring factors are basically reasons why your score is not higher.

There is another misconception we may need to clear up before we get deeper into factors. Most people believe your score starts at the highest number possible in the scoring model used. They also believe that as you miss payments and negative information is added your score decreases. This may also bring them to the conclusion, if they’ve never missed a payment, they should have a perfect score.  That’s not actually the case. As we learned when going over what makes a score, scores are not black and white. There is more to them than just missed payments or on time payments. When you start using your credit you have no score. It’s not until you have a few accounts on your report that your score can be calculated. As you use credit, add accounts, close accounts, miss payments, etc. your score is calculated and changes depending on the value of these items and the algorithm used.

Now that we know that, let’s get back to the scoring factors. What does it mean, “Reasons why the score isn’t higher”? Most of the time, you will get four or five factors.  Each factor has a value assigned to it. They are listed in order of what is affecting the score the most to what affects it the least. They can have an effect of anywhere from 1 to 100 points against the score. Unfortunately there is no way to tell exactly how many points each scoring factor is affecting the score. They can also change every time a change occurs on the credit report each time it is scored. On the other hand, they do give you an idea of how you can potentially improve your credit. The factors can give you a starting point of where and how to proceed. Keep in mind those scoring factors are based on what your lender wants to see and the type of score they use, so just as scores are different the factors will be also. This is why you may disagree with the scoring factors at times also. Sometimes they seem a little nitpicky. Let us say you have an 845 FICO score. Remember the basic FICO score is 300-850, so it is a pretty good score, right? You start looking at the factors and see one that says, “Longest account open is too recent.” You think to yourself, “My accounts aren’t too recent.” Keep in mind, that may be true from your point of view, but according to the score’s (or the lender you’re applying with), it wants more time on the account to get those remaining points.   Here are some examples of scoring factors you may see:

Too many inquiries

Longest account opened is too recent

Balance to limit ratio on revolving account is too high

Balance to limit ratio on bank card account is too high

Not enough paid down on real estate accounts

Too many account opened recently

Too many accounts

Not enough accounts

No open bank card account

No open revolving account

Presence of a bankruptcy

That’s just to give you a taste, but there are hundreds of different factors you could see.

Scoring factors and scores can also be affected by the amount of data on the report. There are two ways this works.  Your report is either thick or thin, so the algorithms used into the score will look at the two types of reports differently.  It modifies the values of how your payment history, amounts owed, etc. affect the score. It would seem unfair that the model adapts to how thick or thin your report is, but I have a story to help clarify this. In July 2000 a Concorde jet crashed. This was the first and only crash of the Concorde. Before that crash, Concorde jets were considered to be the safest aircraft based on air miles and flight hours vs. fatalities because no fatalities ever occurred on one. It had a perfect record. After the crash, it became one of the more unsafe jets to travel on and the Concordes were retired shortly after (For the record, the crash was not the only reason for its retirement). The Concorde did not have as many flight hours as conventional jets to help maintain its safety record. Based on the story, a Concorde would be a thin credit report and a conventional jet airliner would be a thick report, since it has more flight hours and miles than its supersonic counterpart.

Now that you know how risk scores work, I want to go over the importance of making sure your report is accurate. As you learned, a good credit score can save you money. For most of us saving money is a good thing. You also learned that a score is a numerical reflection of what is contained in your report, therefore, if your report is wrong then your score is wrong. It is important to check the information on the report. FACTA, an amendment to the FCRA, allows you to request a free report from the credit reporting agencies once every 12 months. Go to or call (877)322-8228 to request yours. Remember the reports are free, but the scores that the Credit Reporting Agencies offer are not. That is okay though, based on what you’ve learned, that score may not be the same as the bank you’re applying to uses.

I also want to touch a little on credit monitoring. Credit monitoring is a tool to track your credit report and have the ability to check the accuracy of it. It also can be used to prevent fraud as you are notified of changes.  They also may provide a score and it probably isn’t the score a bank will use, but it give you a way to see what your credit is doing. You’re able to track the score they provide you and see which direction you credit is moving, positively or negatively. Since you are able to track a score with monitoring you may also see the score will fluctuate. Keep in mind your report is not a static document therefore the score is not either. It is normal for your score to increase and decrease a few points within a months’ time. Your balances and payments are not all reported at the same time which means as data is modified and changed at different times, your score will also change accordingly. Large leaps are what you will want to look for. If you are tracking your score with a service, it may also be a good idea to save the reports. Pinpointing the reason for a score change is difficult if you do not know what the report looked like before. If you have a score change you can look at the old report and compare it to the new one to see what is different. The differences will indicate why the score may have changed.

The information we have just covered applies to risk scores. Fortunately, much of it also applies to bankruptcy scores and profitability scores. You may never see a bankruptcy or profitability score, but lenders are using them just as much as risk scores.  You may even feel the effects of them and not know it. Here is a scenario that happened to someone I know. This is the best example I have on how a profitability score is used. This person had very good credit. Their score was over 800 with the basic FICO model. They had a Wachovia Bank card. The bank card was very nice because the interest rate was around 5%. Wachovia sold their bank card accounts to Bank One. Bank One sent them a letter after purchasing the account. The letter was similar to a denial letter. It basically stated that they had to increase the interest rate to 20% because of the credit report. This person was concerned. They wondered what could have happened to their report to make Bank One react like that. They obtained the free report and nothing was wrong. What actually happened is when Bank One bought the accounts, they did what is called an account review inquiry (Which shows up as a soft inquiry on the report and does not affect the score). Based on the credit report and this person’s spending habits, they determined, a bank card at 6% would not be profitable for them. This probably sounds unfair, but remember, a bank is a business and by nature it is designed to make money.

Now I am going to give you a scenario to better understand a bankruptcy score. You have lost you job and your budget is stressed because you have less money coming in. To compensate you start using your credit cards more to extend your savings until you find new employment. You notice your balances are getting close to your credit limits. You continue to make your payments on time and aren’t too worried about it because you have some good job leads. You get your mail a little later and notice a mundane envelope from your bank card issuer. You open it and it is a letter similar to the denial letter above, except it says your account has been closed. Confused you call the issuer to find out what happened as you have not missed a payment with them. They tell you there is a problem with you report. You’re now stressed out because you have just been told there is something wrong with your credit report. You obtain a copy of the report and everything is as it should be. The balances are high, but you already knew that. What happened then? The bank did an account review for your report. The used their bankruptcy score model and it determined that there was a high probability that you might declare bankruptcy. The bank did not want to take the risk you might declare bankruptcy, so they closed your account so that you could not borrow more. By doing this, if you did declare bankruptcy they would only lose what you have already used, not anymore. Again, probably not fair, but a bank is business.

In conclusion, we now know a bank uses various score types and score models to make decisions. These models are based off of the information that can be scored on the credit report. There are many types of scoring models and to compare them would be like comparing apples to oranges. You have three credit reports, one from each credit reporting agency, but there are hundreds of ways they can be graded. It is important to check the accuracy of the report to make sure you get the most out of your score.  And a final note, a good score can save you money.  Make sure that you keep those three digits as high as possible!

Please feel free to contact me if you have any questions or would like a free credit consultation.


Brad Boruk
National Credit Solutions
(214) 504-7102 DIRECT  EMAIL






How Re-aging Debts Affects Consumers

Re-aging Debts


One of the largest–and little known–problems facing consumers who are working to raise their credit scores is the illegal re-aging of debt.  Illegal re-aging refers to a creditor (usually a collector) changing the FCRA Compliance Date without the consumer having made a payment.  Illegal re-aging of debt has been around for years; however, in the past three to four years we are seeing a dramatic increase in this activity as collection companies try to squeeze the debtor into paying or settling a collection account.  Re-aging the debt accomplishes two things for the collector:  1) If the debt is re-aged by several months, this will likely result in the debtor’s credit scores dropping, and 2) The Credit Reporting Time Period is extended seven years from the date the account was re-aged.  In other words, the clock begins anew and the debt stays on your credit file for at least another seven years.  The thinking is, the debtor will be more likely to settle the debt if the damage is great enough.


Before I get into more detail about illegal re-aging of debts, I feel I must first explain that debts can be re-aged legally.  If an account has been charged off to profit and loss by an original creditor or if the original creditor has transferred or sold the debt to a collection company, making a payment on the account will legally re-age the debt.  This is considered legal because the debtor instigated the process by making a payment.  If you’re considering paying or settling an old collection, be aware that your credit scores are probably going to drop once the collector updates this information with the credit reporting agencies.


What, then, is illegal re-aging of an account?  According to the Fair Credit Reporting Act (FCRA), most negative credit information can remain on your credit report for 7-1/2 years (7 years plus 180 days) from the date of first delinquency (DOFD).  The DOFD is the date the consumer first became 30 days late and no further payments were made on the account from that date forward.  The DOFD + 180 days is usually the time frame that the original creditor charges off the account.  The FCRA Compliance Date is officially the beginning of the DOFD and cannot be changed once an account is charged off.


What is Re-Aging an Account?  According to the Fair Credit Reporting Act (FCRA), most negative credit information can remain on your credit report for 7.5 years (7 years + 180 days) from the date of the first delinquency (DOFD). The date of the first delinquency (DOFD) is the date a consumer first became 30 days late and no further payments were made on the account from that date forward. At this stage the DOFD usually leads to a creditor charging-off the delinquent account. The FCRA Compliance Date is the official beginning of first date of delinquency (DOFD) which cannot be changed once an account is charged-off (except by consumer initiated payment).  The 7-year clock begins 180 days from the time you FIRST missed a payment. The Fair Credit Reporting Act states:

“The 7-year period shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity; charge to profit and loss, or similar action.”


Creditors can charge off an account 180 days after the first date you missed a payment.  The date you first became delinquent begins the aging process and once the debt has matured 7.5 years, it must be deleted from your credit report.  Some creditors and collection companies report a more recent date to the credit reporting agencies, thus extending the negative reporting of the account.  This is illegal and, as mentioned above, can actually lower your credit scores as recent derogatory information is more detrimental than older negative information.  Re-Aging a delinquent account is a serious violation of the FCRA and, if the account is a collection account, may be a serious violation of the FDCPA (Fair Debt Collection Practices Act).


Within 90 days of a charged-off debt being placed on your credit reports, the creditor must report the FCRA Compliance Date, and failure to do so within that time period is also a violation of the FCRA.  Once the original creditor reports the FCRA Compliance Date to the credit reporting agencies, it is set in stone (again, with the exception of the debtor making a payment).  This date cannot be changed or updated under any circumstance.  The clock on the date the account FIRST went delinquent cannot change no matter how many times a charged-off debt is purchased, transferred or sold.  The charged-off account can bounce from collection agency to collection agency but according to the FCRA, the debt can only be reported for 7.5 years from the date of first delinquency (DOFD).


In closing, there’s never been a better time to have a good credit score than the time we are currently in.  What other time in our history could you purchase a vehicle at 0% interest or a home at an interest rate below 3.5%?  I’m not sure if this is the new norm, but something tells me these crazy interest rates won’t be around forever.


If you think you may have debt that has been illegally re-aged, please contact me.  Clients of National Credit Solutions are entitled to a free review by a qualified FDCPA attorney for any violations of the Fair Debt Collection Practices Act.



Brad Boruk
FCRA-Certified Credit Analyst
National Credit Solutions
214 504-7101 DIRECT

How Credit Affects Hiring and Promotions

How Credit Affects Hiring and Promotions


You’ve applied for a great job.  You nailed the initial interview and now you’ve been asked to return for a second interview.  You’ve furnished great references and are not concerned if the prospective employer does a background check.  As a part of the process, the interviewer sent you some documents to complete and return before the second interview takes place.  One of the forms you are asked to complete is a consent form giving authorization to your prospective employer to pull your credit report.  Ouch!


The scenario above actually happened to me several years ago.  This was at a time when not too many employers actually used the information provided in a credit report to make hiring or promotion decisions.  And it was also at a time when my credit scores were not something I wanted anyone seeing–especially not a prospective employer!  What did I do?  I picked up the phone and called the manager who had interviewed me.  Thank goodness that the manager was very compassionate and understanding about my situation.  In fact, he shared with me that, if the company based their decision solely on a credit report, he probably wouldn’t be working there and he certainly wouldn’t have held a management position.


It used to be that employers typically pulled credit on applicants only for high level or security positions.  Today, with a lot of quality people out of work and seeking jobs, employers can be pickier about the applicants they hire and the employees they promote.  Consequently, your credit scores are now more important than ever before.  This is not to say that most employers now pull credit on all applicants, but there is a trend toward that practice.  Most companies that do use credit checks as part of the hiring process won’t request the credit check until later phases of the hiring process.


How-Credit-Affects-Hiring-and-PromotionsIf you have bad or less-than-perfect credit, is there a reason you should be concerned during the hiring process?  Yes, of course.  However, there is some good news:  employers aren’t normally looking at your credit scores; they are more interested in the information contained in the body of the credit report.  One thing they will be looking at is, does the information you’ve provided them match up with the information in the credit report?  In other words, are there employers and previous addresses on your credit report that aren’t listed on your resume?  If so, these can be a red flag.  They will also be looking to see if you exhibit poor decision making skills: do you continuously live beyond your means and exercise poor judgment in paying your creditors?


It’s always a good idea to be prepared and know what’s on your credit when you begin hunting for a job or applying for a promotion.  The three major credit reporting agencies, Experian, Equifax and TransUnion, are required to allow you a free copy of your credit report once every 12 months.  If you’ve not pulled this report in the previous 12 months, you can do so at


Once you have the report, be sure and examine it closely for any mistakes.  You will want to pay very close attention to employment information reported to your file.  For example, if the report says that you worked for XYZ Company in 2008 but you never worked there, you may want to contact the credit reporting agencies and ask them to delete this information.  Ultimately, you want the employment information on your credit file and your resume to be the same.  The reason for this?  Most employers are more concerned to see employment history on your credit report that doesn’t match your resume than they are the fact that you were late on a credit card or have a collection.


Another reason to look at your report is to avoid any questions from your potential employer that you can’t answer.  A great deal of our clients are surprised when they find out that they have a public record on their credit report, especially Judgments and Tax Liens.  In fact, I had a client last week that called to let me know that a Chapter 13 Bankruptcy had appeared on one bureau of his Public Records–and he’s never filed for a Bankruptcy in his life!  You want to make sure that all information on your credit file is reporting correctly and that you are aware of everything on your credit report.


In closing, please be aware that a potential employer must have your consent in order to look at your credit report and, more importantly, they must disclose that the information on your credit report may be used to make a hiring or promotion decision.


If you have any questions about what’s on your credit report, feel free to give me a call.


Brad Boruk
The Credit Guy
FCRA Certified Credit Strategist
214 504-7101