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Frequently Asked Questions
In order to better educate our clients on our program and financial matters in general, we have compiled this list of frequently asked questions and their answers.
How does TDS program affect my credit? / What will happen to my credit after I complete the program?
The TDS program will result in late payments on your accounts. Most creditors will report late payments to the credit reporting agencies. Some accounts may charge off. If your creditors report your late payments or charge offs, they can stay on your credit report for up to 7 years. When we settle accounts creditors report the settlements to the credit reporting agencies in various ways. Common reports are "settled for less than full balance", "settled", etc… Once in a while a creditor will report a settled account "paid as agreed" though this is rare. It is important to know that regardless of the wording the creditor uses, if they have agreed to a settlement and you have paid it, they must report that you no longer owe them anything on that account.
It is also important to keep in mind that your payment history is only one factor in determining your credit rating or credit score.
There are many other factors. For more information you should go to www.myfico.com or
www.experian.com.
More importantly, you must understand that no one can accurately predict the precise effect this program will have on your credit. One important factor about our program is that inability to make regular monthly payments is part of our enrollment criteria. If you did not have money in your budget to keep current on your debts, you would likely have late payments on your credit report even if you did not enroll in our program. This is important to keep in mind when considering the effects of this program as they relate to your credit. Some other important factors to keep in mind are how fast you will get out of debt while in our program as opposed to how long it would take you to get out of debt without the help of a debt settlement company. When your unsecured debt is eliminated you will have a greater ability to pay for such things as a new home or new car.
What is the difference between my Credit Report and me being Credit Worthy?
Credit reports are compiled by credit reporting agencies that are private companies engaged in the business of selling information. There are three national credit reporting agencies: Equifax, Experian and Trans Union. Creditors make reports to these agencies concerning your record with them. These reports include such information as your social security number, address, phone number, your account number, the date you opened your account, the highest balance you've ever had, your credit limit (if applicable), your current balance, your current monthly payment, your payment history and the status of the account. Lenders often take the information provided by the credit reporting agencies to determine your "credit score" which is a number based off of a complex formula that is supposed to indicate your credit worthiness.
It is possible to have a good credit report and credit score and not be credit worthy. The most common way this could happen is to have too much credit. If you fill out a loan application, you are asked for your current household income. The lender pulls your credit report and sees how much you owe and what your payments are each month. If your monthly payments are too high in relation to your current monthly income, you will not be considered credit worthy. The opposite is also true. You could have a poor payment history, but have no outstanding debt (you paid it all off). You therefore have no monthly debt payments. This is a big factor when applying for a loan, such as a mortgage. For many lenders it is a bigger factor than your credit score and credit report and they will consider you credit worthy despite the prior payment problems you may have had.
Another factor that should be mentioned as part of this question is the accuracy of the credit report. A very credit worthy individual may have a poor credit report due to inaccurate information included in his or her credit report. Such inaccuracies can be the result of simple mistakes or can be something as severe as identity theft. Identity theft has made headlines across the country. It is therefore advisable to request a copy of your credit report once a year to ensure that it is accurate. You are entitled to dispute inaccurate information in your credit report. The credit reporting agencies must delete information from your credit report that is inaccurate, obsolete or cannot be verified.
Does anyone really complete the program? Where can I find testimonies of clients who have already been through the program?
Yes. We have clients completing the program on a weekly basis. Many write testimonials and these are available on our websites. We update these pages frequently.
Do you settle with my creditors?
We regularly do settlements with all of the major banks and large collection agencies. There may be some smaller banks, credit unions, collection agencies, hospitals and/or medical offices that we have not yet worked with. This usually is not a problem. When we encounter a new creditor we contact them and let them know who we are and what we are trying to accomplish. Once new creditors understand our program they are usually very willing to work with us.
The creditor says they are going to sue me. Can I get sued?
Creditors do have the right to sue you to collect their debts. In our experience this occurs with a relatively small percentage of our clients. Creditors have their own rules and policies as to whether or not they will file a lawsuit and these seem to change fairly often. No one can predict whether or not you or any other client will actually get sued, but it is a possibility. If this happens you will need to get legal advice. The Debt Solution does not provide legal advice. We can refer you to a company that provides this service through their network of attorneys, or you can hire your own attorney.
How to I get creditors to stop calling me?
The ONLY sure-fire way we know of to completely eliminate creditor calls at home is to change your phone number to an unlisted number. Even this can have a negative side affect if you still work at the same place you did when you applied for credit. The creditors may start trying to reach you at work. There are several steps you can do to reduce the volume of calls from the creditors. It is best that you start taking these steps as soon as your enrollment in the program is complete.
- Immediately call all of your creditors and tell them that your new phone number is (661) 257-9755. Don't get into any discussion about being in our program. Just get them to change your phone number on their records.
- If, after you have done the above and we have sent out our letters notifying the creditors that you are on our program, creditors are calling at work, you can write them a letter stating that you cannot receive these calls at work. Give them the above phone number to call in your letter.
Why do the creditors say they have not heard from TDS?
We do contact ALL of your creditors. This is done as soon as we have your Power of Attorney.
It often takes 2 to 4 weeks for the creditors to enter in the information that you are working through our company into their computers. During that time callers will not be able to tell we have sent the paperwork even though it was sent.
Realize that the job of the collector is to get a payment from you. These people are often paid commissions or bonuses on how much money they collect. Some of them will say or do ANYTHING to get you to pay, even outright lies. Here are two of the most outrageous lies told to our clients by creditors:
- "We spoke to The Debt Solution and they said they've never heard of you." (Note - This was said to a client who also happened to be an employee!)
- "We spoke to ________ and he said you are no longer on their program." (In one instance they actually managed to get the name of someone in our Information Technology department and used that person's name when making this statement)
Most of the kinds of statements we mention here stem mainly from not understanding what we do, or slowness in their administrative lines. If you start talking to them rather than sticking to the script, they can tell you more nonsense and create a rift between you and us. Don't talk to them, just use the script. This is what it was designed for. If you keep repeating the same message to them over and over, they will eventually stop. This has happened time and again.
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