Consumer Credit Frequently Asked Questions

What do I do when a creditor calls?

The situation may feel hopeless, but it’s not. You have the Fair Debt Collection Practice Act (FDCPA) on your side. The FDCPA is a law that prevents abusive, deceptive, and unfair debt collection practices by debt collectors. Here are some specific examples of how FDCPA protects you.

• A debt collector cannot contact you at unusual or inconvenient times or places before 8 a.m. or after 9 p.m.
• They may not call you repeatedly or place telephone calls to you or any other person without identifying themselves as a debt collector.
• A debt collector cannot contact third parties except your attorney or credit bureau, except to locate you. For example, if an agent contacts your employer they are only allowed to confirm or correct information on your whereabouts. They are forbidden to tell your employer about your financial difficulties.

What is a Wage Garnishment?

If creditors are calling you to demand payment and you’ve got nothing to give you may have already heard the term “wage garnishment.” It’s meant to scare you and to be honest, it probably should. A wage garnishment is a means by which creditors can collect money you owe them by taking a portion of your paycheck. It’s a drastic legal maneuver and a last resort for most debt collectors - but it does happen.

If you are unable or unwilling to pay a debt you owe, a creditor can sue you to collect the money. If the creditor wins and you still do not pay, the creditor can ask the court to issue a Writ of Garnishment. If the writ is granted, papers are then sent to your employer with instructions to withhold a certain amount of money from your paychecks until the judgment is satisfied. That money goes directly to your creditor and you receive whatever is left.

If one of your creditors is pursuing a wage garnishment, Center For Consumer Credit Counseling may be able to help you. Please contact us at 712-252-1861 extension 47 to make an appointment today.

How do I get a credit report?

AnnualCreditReport.com allows you to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies:  Equifax, Experian and TransUnion.  You may also contact our office to set up an appointment to obtain a TransUnion credit report.  During this appointment a certified counselor will go over the information in your report with you.

How does credit scoring work?

A credit score is calculated by a mathematical equation that evaluates many types of information from your credit report.  By comparing this information to the patterns in hundreds of thousands of past credit reports, the score identifies your level of future credit risk.

In order for a FICO score to be calculated on your credit report, the report mus contain at least one account which has been open for six months or greater.  In addition, the report must contain at least one account that has been updated in the past six months.  this ensures that there is enough information - and enough recent information - in your report on which to base a score.

What is a FICO score?

Credit Burea scores are often called “FICO scores” because most credit bureau scores used in the US and Canada are produced from software developed by Fair, Isaac and Company (FICO).  FICO scores are provided to lenders by the three major credit reporting agencies:  Equifax, Experian and TransUnion.

FICO scores provide the best guide to future risk based solely on credit report data.  The higher the score, the lower the risk.  but no score says whether a specific individual will be a “good” or “bad” customer.  And while many lenders use FICO scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product.  There is no single “cutoff score” used by all lenders.