'Zombie debt': When collectors haunt you

After Kim Mullen filed for bankruptcy in 1993, she cut up all her credit cards in her lawyer's office. Since then, the Levittown resident has managed to obtain a good credit rating.

But in December, a debt collector contacted her, saying she had an unpaid card balance of $5,655 from 1992. With interest, the letter claimed, the debt had grown to $19,400.

As old debt seems to rise from the dead, it's taken on a name -- "zombie debt." And in recent years, more and more such debt is coming back to haunt consumers, according to their advocates and lawyers who specialize in debt.

Mullen, 46, says she doesn't remember the debt and has challenged it. Others who have received such notices say the purported old debts are a result of identity theft.

Credit crackdown gets personal

People late paying their mobile phone bills or who forget to settle even a minor credit card payment are being blacklisted for credit cards and loans as lenders take a hardline approach to protect themselves from bad debts.

Lenders are securing access to ever more personal data when deciding whether to offer credit cards and loans, and lapses that would have had little effect on a credit rating a year ago are being used to deny credit.

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Introduction to Debt Management

(ARA) - If you are among the nearly seven million Americans whose short-term debt exceeds 20 percent of their annual net income, a debt management program may be able to help you.An effective debt management program consolidates your bills into one payment with several benefits:
1. Lower payments by up to 50 percent.2. Pay off debt in 36 to 60 months.3. Rebuild credit rating.4. Stop harassing phone calls and letters.


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Your credit rating explained

Each agency will provide more detailed information - including in some cases instant, continuing and online access to your file - for a higher fee.

Correcting any mistakes

You have the right to dispute inaccurate information on your credit file, and to have errors corrected. But you cannot get information removed just because you find it embarrassing.

If there is negative information on your file about people in your family with whom you have no financial connection, you can ask the agencies to "disassociate" you from them.

If you want to dispute the accuracy of something else on your file, first contact the relevant creditor. If the information is wrong, it must update its internal records and notify the credit reference agencies it deals with, usually within 28 days.

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A Free Credit Check that Doesn't Decrease Your Credit Score

(ARA) - There are a lot of numbers that are important in life, but none quite as influential as your credit score. Having a high credit rating can give you better interest rates on credit cards, car loans and even your mortgage. On the opposite side, a poor credit rating can make many aspects of living difficult. It's important to check your credit score to learn where you stand.By viewing your credit activity on a regular basis you can manage any detrimental items that need to be removed or fixed. These actions will create a better rating under your name and benefit you throughout your life. The easiest and fastest way to do this is by going online.GoFreeCredit.com is an easy way to check your credit from all three major credit bureaus. You can try this service free for 30 days to monitor any activity and make changes in your life so that your score increases.


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Popular credit rating system to change

MELVILLE, N.Y. - Bob Friedrich always pays his bills on time ... well, almost always.

Three years ago, he sent in his monthly mortgage payment as usual, but it got lost in the mail. He thought the problem was history after he paid the overdue balance the next month. But when he got his credit report last month, he found the single late payment with a note that it was negatively affecting his credit score. Friedrich, 53, an accountant who lives in Glen Oaks, wasn't happy, even though his score was still an impressive 790 out of 850.

"I think it was improper," said Friedrich, who contested the blemish and hopes it won't appear on future reports, which he checks yearly. "It was a single late payment that wasn't my fault. It was the post office's fault."

Friedrich, however, probably won't have to worry about the late payment affecting his score when he pulls his credit report this coming December.

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