How Credit Card Debt Settlement Affects Your Credit Report and What You Can Do About It

Amazon eBook TAC Blog Picture How Credit Card Debt Settlement Affects Your Credit Report and What You Can Do About It

Over the last 15 years, and especially within the last 4 to 5, I can’t tell you how many times I’ve been asked this particular question.  What’s even more amazing is that people attempting to negotiate debts and settle them on their own, which is how I believe debt settlement should be done, have no clue whatsoever to what the actual answer is.

We all know that failure to pay creditors under the terms originally agreed to will reflect negatively on our credit report. But should an account go into collections, one of the consequences of any debt settlement is the damage caused to your credit score. Although the effects of debt settlement on your credit are often unavoidable, there are ways to minimize that damage if you know what to say, and how to negotiate, during the do-it-yourself debt settlement process.

Time to Set the Record Straight

I got tired of reading and listening to the so called “credit and debt experts” continually espouse the view that you have to settle your debt first – then work on improving your credit report second.  Even though your number one priority should always be to settle your debt and move on with your credit and financial life, the fact is; all aspects of debt settlement are negotiable!

The best way I knew how to set the record straight was to create a “Special Report”.  I felt I needed to give you, the Amateur Consumer, a different and substantiated point of view and I wanted you to know there is absolutely no reason why you shouldn’t attempt to manage the damage to your credit report while attempting ‘do it yourself’ debt settlement!

This book will show you how to minimize the damage that will be done to your report by explaining in clear detail how to negotiate your credit rating, with both creditors and collection agencies, during the do-it-yourself debt settlement process. One things for sure; if you don’t ask, you won’t get! And this book will show you how to do both!

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5 Steps To Better Credit? Not So Fast!

5 Steps To Better Credit 5 Steps To Better Credit? Not So Fast!

Google credit repair and undoubtedly you will pull up endless bloggers, credit and financial experts, and a whole host of websites advocating for 5 simple steps to bettering your credit as though it were that easy.  But upon further review, there is so much more to correcting your credit report that they don’t tell you, but you should know.

In this post, I will go over those 5 so-called ‘simple steps’ and give you the added details they forgot to mention.

Simple Step #1: Order Your Credit Reports

I know the name of my blog is The Amateur Consumer, but do we really need to even list this as a step?  If you don’t know that because of the passage of the 2003 Fair and Accurate Credit Transactions Act you are entitled to a free credit report from the three major credit reporting agencies, Equifax, TransUnion and Experian, and that each is required to provide you, upon request, a free copy of your credit report once every 12 months, then where the hell have you been for the last 9 years?

Oh, I’m not talking to you? Well chances are I am!  In fact, according to a recent Harris Interactive Poll conducted on behalf of The National Foundation for Credit Counseling (NFCC), almost 2 in 3 adults (65%) – approximately 149 million Americans – have not ordered a copy of their credit report during the past 12 months, and almost as many (63%) have not ordered or received their credit score so yes: I am talking to you!

Click here to find out how to order your free Credit Reports

Did You Know These Facts About Simple Step #1?

1. If you’re going to pull one report at a time using, all you’re doing is wasting valuable time and effort in your desire to accelerate the process of credit recovery.

2.  Those free reports that the credit bureaus are required to provide by law come without credit scores.

3.  Those free credit reports provided by the big 3 through aren’t actually credit reports at all!

Watch Lecture #5; Your Credit Roadmap, to learn about these facts and more

Simple Step #2: Review Your Credit Report For Errors

Sounds simple enough, right?  But do you know the difference between an error and inaccuracy? Do you know what “incomplete” information looks like?  I’m betting that if 63% of you have not ordered your free credit reports, then even more of you have no idea what to look for let alone understand and know how to read a credit report.

Did You Know These Facts About Simple Step #2?

1.  Credit report accuracy is first and foremost, a consumer protection issue.

2.  The Big Three credit bureaus see their primary duty to faithfully put on consumers’ reports what creditors and debt collectors dictate.

3.  The consumer dispute verification (CDV) system has no capability for the credit reporting agencies to send or for furnishers to receive documents if you send a dispute with thorough documentation

Watch Lecture #6; FCRA and Errors of Expediency to learn about these facts and more

Simple Step #3: Dispute Those Credit Errors

DUH!  As my 7 year old daughter says; ya think?  Many of these bloggers, credit and financial experts, and websites say to clearly identify each mistake and state why it’s wrong.  They say you should send a copy of your credit report with the mistakes circled to the reporting credit bureau and to include copies of supporting documents.  But if the CDV system has no capability for the credit bureaus to send that supporting information, then what’s the purpose?

Did You Know These Facts About Simple Step #3?

1.  The credit bureaus have been sued time and time again by consumers to get the relief they sought when looking to clear errors and inaccuracies from their credit reports

2.  The Consumer Financial Protection Bureau (CFPB) can help you with correcting those errors

3.  Document everything as it happens

Watch Lecture #7: Your Good Name to learn about these facts and more

Simple Step #4: Create a Spending Plan

Again, many bloggers, credit and financial experts, and websites advocate for making a spending plan part of managing your credit moving forward and this step is probably one of the most important steps you could take to secure your credit and financial future!  And for all of you reading this thinking “Oh oh; he’s talking about doing math” – WRONG!

Fact is; personal finance has nothing to do with math. It’s all about understanding some basic financial principles, knowing where to find the advice and tools you need to create and work your simple plan, and choosing the right tools to get you to where you want to go in your financial life!

Click here to learn how to draw a simple spending map so you don’t get lost ever again

Simple Step #5: Build A Strong Credit Report

Finally, all of these experts and sites advocate for building and adding positive information to your credit report and they would be right!  But here’s the long and the short of it people;    The 3 main steps you must learn to better your credit moving forward are these:

  1. Learn how to perform a “Credit Audit and Verification” of your credit report
  2. Learn how to add positive information to your credit report
  3. Learn how to become a credit adult!

Watch Lecture #9 to learn how to perform a Credit Audit and Verification of your credit report

At the end of the day, no one is a better guardian of your economic reputation than you so learn how to protect your credit and your finances! Sign up for my free video lecture series to learn how to become a better, more informed consumer moving forward icon smile 5 Steps To Better Credit? Not So Fast!

How To Get Grant Money As A Single Parent For College

Back to School How To Get Grant Money As A Single Parent For College

The following is a guest post from Jon Haver, Blogger at  It is difficult to come up with the money required for college as tuition has increased at a faster rate than inflation or even health care. In fact, since 1978, the cost of college has increased 12x. Being a single parent and looking at today’s College Tuition can make it seem utterly impossible that you could provide for your family while being able to further your education. This article is meant as a resource to help single parents understand what grants are available to them and how to apply for them. [Read more...]