Lender is only reporting car payments to one credit bureau

May 19, 2016 14:42 by Consumer Ed

Dear Consumer Ed:

I've been making a car payment for the last two and half years, and I have discovered that my finance company only reports to Equifax and not to the other two credit reporting agencies.  My Equifax score went up from poor to fair, but unfortunately my TransUnion and Experian scores have not improved.  I called TransUnion, but they told me that only the finance company itself can report my car payments.  I was wondering if there is a way to let the other two credit bureaus know about my $400 payments.

Consumer Ed says: 

First of all, way to stay on top of your payments!  Your responsibility is being reflected in your Equifax score.  Unfortunately, you won’t be able to report your good credit and behavior to the other two credit reporting agencies—TransUnion is correct that only your finance company can do so.  Creditors get to decide who they report to, and aren’t required to report to all three credit bureaus (in fact, some don’t report to any credit reporting agencies at all).

You can try to talk with TransUnion and Experian, but, in all likelihood, they won’t agree to accommodate you.  Your best option is to talk with your finance company instead.  If you’ve been dealing with someone in particular, talk to him/her and ask for someone high in management.  When you reach that person, explain your issue, emphasizing how you’ve been a good customer by consistently making your payments (the longer you’ve been doing this, the better).  You should then ask them to add your account to the two other credit reporting agencies.  Your bargaining chips are that you have been a good borrower, and you have an income that shows your capacity to pay future loans—that’s what lenders want.

If your finance company agrees to your request, all three of your scores will soon be more similar, but remember there may still be some variances, since the credit bureaus calculate scores differently.  Creditors may also report your information to the various agencies at different times.  Should your finance company refuse your request at first, keep making your payments on time, and they may be willing to reconsider a few more months down the road. 

You should still order a free credit report every year at www.annualcreditreport.com and check for errors.

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Merchant turned my account over to collections after I reversed charges on a faulty product

April 21, 2016 14:20 by Consumer Ed

Dear Consumer Ed:  

I purchased a product that was faulty and disputed the charge with my credit card company. I had the charge successfully removed from my account. Now the merchant has turned the matter over to a collection agency. Can they do that?

Consumer Ed says:  

Generally, once the credit card company has reversed the charge, it’s between the credit card company and the merchant to determine whether the charge was valid.  Since the credit card company did remove the charge, the merchant likely lost that fight. 

If the merchant has turned the account over to a collection agency, you should strongly consider disputing the charge with the collector. You must do so, in writing, within 30 days of receiving notice of the debt from the collection agency.  You should verify that the letter from the collection agency informs you that you have 30 days to dispute the charge.  If the letter does not inform you of this right, the letter itself may violate the Fair Debt Collection Practices Act and, as a result, the debt may also be uncollectable for that reason.  If you dispute the charge, the collection agency must ask the merchant for proof of the debt.  The merchant has 30 days to produce this evidence. During these 30 days, the collection agency cannot proceed to collect the alleged debt from you if you have informed the agency that you are disputing the charge.


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Debt consolidation

January 13, 2016 20:52 by Consumer Ed

Dear Consumer Ed: 

What is the right approach for debt consolidation? Is it a good thing to do? How do I find a reputable company? 

Consumer Ed says:  

Whether debt consolidation is right for you, and which approach you should take, depends on a number of factors.  Debt consolidation involves transferring multiple loans into a single loan – your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment.  Someone who qualifies for consolidation may receive:

  • Lower interest rates — Extending the principal balance over a longer period of time allows a lender assuming multiple loans to reduce interest rates on the larger loan while still collecting an adequate amount toward the principal owed. 
  • Lower monthly payments — By consolidating high interest debts into one lower interest rate, you will owe less each month. 
  • An improved credit score — If your credit score has suffered because of longstanding debt, your ability to make monthly payments over a long period of time can help raise it over time. 

Unfortunately, there are many companies that take advantage of people trying to solve their debt problems by charging them excessive fees, not paying creditors in a timely manner, and actually worsening debt problems.  So take care in choosing a debt adjustment company.  To locate a reputable company in your area, contact the National Foundation for Credit Counseling at 800-388-2227 or www.nfcc.org.  

 

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