Credit: Questions & Responses

Credit Card Debt Larger than Credit Limit

Dear AAFC: A person I am working with is being hounded by collectors for a huge credit card bill. The card had a $200 credit limit, but now the collectors claim that she owes $1,000 due to interest and fees. How can they charge so much more than she ever charged on the card? Is that legal?

Credit Limits on Credit Reports

Dear AAFC: A lot of my clients’ credit reports show no limit (the space for credit limits is left blank) when in fact there is a limit on the account. How important is this problem to fix?

Credit Score Tips

Dear AAFC: Is your credit score affected if your debt balance remains more than 10 percent of the credit line after you make the minimum payment each month?

Disputing Credit Report Items

Dear AAFC: I’m helping a client dispute errors on their credit report, but when we try to enter the dispute online, the credit bureau says they need a credit report number. The client got their report from a bank and it doesn’t have a number. Do we have to purchase a new report to dispute?

Free ID Theft and Credit Protection

Dear AAFC: I have a client who is accessing her credit report quarterly via a credit monitoring service that charges her $4.99 a month. I want to coach her to stop paying this monthly fee but I wonder if there are some positives that I am overlooking.

Paying Off Several Credit Cards

Dear AAFC: What is the best plan for paying off several credit cards? My client has some with lower balances like under $200 and some with higher balances like $500-1000.

Rebuilding Credit After Foreclosure

Dear AAFC: One of my clients is behind four months on the mortgage and is losing their house. Once a home is foreclosed, how long does it take to start building a positive credit score?

Secured Credit Cards

Dear AAFC: Can you recommend a good credit union or bank that offers secured credit cards? I thought all financial institutions would offer this service, but I was wrong.

Special Concerns for Co-signers

Dear AAFC: One of my clients agreed to be a co-signer on their son’s mortgage. Is there a difference betweem being a co-signer and a co-buyer? I’m also wondering how this works for unsecured debts like credit cards, where someone is a joint account or an authorized user?
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