TheStreet.com is reporting that bad credit could end up costing you around $1 million during your lifetime. For people with poor credit scores, the added cost of borrowing could exceed $1 million USD over a 30 year period.

Source: Your Bad Credit Could Cost You $1 Million

Before you spend hundreds of dollars on a ‘credit repair’ service, you owe it to yourself, your wallet and your credit rating to read this Federal Trade Commission fact sheet on credit repair.

According the the FTC, self help may be your best option for improving your credit score.

The FTC credit repair fact sheet discusses the following important issues for consumers:

1. Scams and warning signs of credit repair offers.

2. The truth about credit repair options.

3. Steps for consumers to take in order to improve their credit scores.

4. The Credit Repair Organizations Act.

5. Government agencies that can help with credit reporting complaints.

6. Do-it-yourself credit check-ups.

7. A sample creditor dispute letter.

You can view the FTC’s credit repair fact sheet @ Credit Repair: Self Help May Be Best.

Congress mandated that consumers have access to their credit reports free of charge in the Fair and Accurate Credit Transactions Act of 2003. For anyone concerned about their credit rating, identity theft or their credit history, it is advisable to get a free copy of your credit report.

In addition, pulling a copy of your credit report can help you to identify any credit accounts that you no longer use. You may want to close unused credit accounts to improve your credit rating and protect against unauthorized use by others. When you call credit departments to close an unused account, make sure to request that all three credit reporting agencies are notified by the company and also request that a letter be sent to you, notifying you of the closed account.

Consumers should beware of email and ad scams that offer free credit reports, by following the Federal Trade Commission’s guidelines for obtaining your free credit report.

Below is the official Federal Trade Commission information for obtaining a copy of your free credit report —

• Consumers are entitled to a free copy of their credit report, at their request, from each of the three companies ( Equifax, Experian, and TransUnion ) once every 12 months. According to the Act, consumers may order free credit reports from all three companies at the same time, or stagger their requests over the course of the year.

• Consumers can order their free credit reports online at www.annualcreditreport.com, or by calling toll-free at 1-877-322-8228, or by mailing a completed Annual Credit Report Request Form (available at www.ftc.gov) to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

• When ordering your free credity report online, you must provide your name, address, Social Security number, and date of birth. If you have moved in the last two years, you may have to give your previous address. To maintain the security of your file, each nationwide consumer reporting company also may ask you for information that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different information. That’s because the information each company has in your file may come from different sources.

• The only authorized Web site for the program is www.annualcreditreport.com. Some Web sites offer a supposedly “free” service that converts to one that requires a fee after a trial period ends. Some bogus Web sites have “free” in their name; others misspell the name of the official Web site, hoping consumers’ typing errors will lead them to Web sites that try to sell things or collect personal information. To avoid mistyping the name, click on the annual credit report link on the FTC’s website (www.ftc.gov).

• E-mails and pop ads claiming to be from annualcreditreport.com or any of the three companies are probably scams. Such e-mail should be forwarded to the FTC’s spam database at spam@uce.gov.

• Consumers who use www.annualcreditreport.com to get their free report online should close their Internet browser after obtaining their report to be sure their transaction is secure and their personal information is not at risk.

Mises.org has published a very good defense of debt collectors and the debt collection industry.

You can read the article @ In Defense of Debt Collection.

This article in the Star Telegram does a good job of answering a consumer’s question, “Can debt collectors call neighbors?” The article gives some very good information that debt collectors should remember and follow in order to keep themselves and their employers out of legal trouble.

From the article –

The answer, in this situation, is maybe. Debt collectors can call a neighbor, identify themselves as a debt collector if asked the name of their company, and explain that they are trying to find someone, according to federal and state laws. But they are not allowed to disclose any information about a debt.

Calls like those in Kennedale now happen more often, industry observers say. Contributing factors include growing consumer debt, new restrictions on bankruptcy filings and the booming collection industry, which is growing almost as fast as the debt.

Tom Kelley, a spokesman for the Texas attorney general’s office, said complaints about overly aggressive debt collectors are increasing.

Another neighbor on Dow’s street, Christine Williams, described a call that may have skirted the legal line.

Williams said she got a call from Ford Motor Credit Co. asking about another neighbor. According to Williams, the caller said, “We want to know if the people are still living there, and if they are still driving the truck.”

That question about the truck, some experts say, is possibly illegal because it gives the neighbor too much information.

“I don’t think we would go so far as to say, ‘Does he drive the white truck?’” said Louisville, Ky., lawyer Donald Haunz, who works at a law firm that represents collection companies. “We would say, ‘We are trying to locate Mr. Smith and do you know him? And do you know if he still lives at blah-blah address?’

“We would try to be as unobtrusive as possible. But we would ask questions that help us locate him.”

You can read the entire article @ Can debt firms call neighbors?.

The following is a press release put out by LexisNexis on their RecoverScore product for debt collectors. The RecoverScore product is offered through the LexisNexis Accurint service. Our republishing of this press release is for informational purposes only and should not be viewed as an endorsement of the service —

BOCA RATON, Fla.–(BUSINESS WIRE)–Feb. 21, 2006–LexisNexis U.S., a leading provider of information and services solutions, today announced the availability of the RecoverScore(R) solution for its collections customers. In the collections industry, the RecoverScore solution has shown that the top-10 percent of ranked accounts will typically generate 10-times more revenue compared to the bottom 10, and the top-50 percent of scored accounts often produce 80 percent of total payments. The RecoverScore solution uses advanced data mining and modeling techniques to identify the most collectible accounts and rank order them.

The RecoverScore solution analyzes accounts based on debt characteristics, contact ability and liquidity. These are key factors that determine collection effectiveness and can help determine what strategies to deploy in working various accounts. Because the product is linked into the LexisNexis and Accurint(R) data repositories, clients save the time and expenses associated with obtaining information on their own from credit bureaus, skip-tracing services and other data vendors.

“RecoverScore incorporates advanced LexisNexis modeling techniques to help collections professionals focus their efforts on the accounts with the highest probability of recovery,” said Steve Seoane, senior director of analytics for LexisNexis Risk Management. “By offering RecoverScore through Accurint, LexisNexis continues to provide the collections industry with premium technologies and resources that help professionals save time and increase collections.”

The LexisNexis RecoverScore solution has the capability to analyze debt characteristics including type of debt, age of debt, last payment and balance. Furthermore, the product searches liquidity characteristics including homeownership records, commercial properties and other assets, proximity of known relatives and other documentation containing personal records and information to create a rank ordering of accounts.

RecoverScore also provides separate rank orders and scores for different types of account portfolios, such as bank card, utility or medical expenses owed. Clients can easily devise collection strategies based on this specific data.

Credit report repair services are all over the web, but consumers should beware.

A recent blog post on the WashingtonPost.com reported the following about credit report repair offers —

“Credit repair promoters generally charge hundreds of dollars, but don’t deliver on their claims,” said Eileen Harrington, the Federal Trade Commission’s deputy director of the agency’s consumer-protection division. “The fact is, they can’t. No one can legally remove accurate and timely information from your credit report. … There is absolutely no reason to pay for credit repair–ever.”

You can read more on this blog post by Caroline Mayer @ Beware of Enticing Offers to Fix Your Credit Report.