Posted by: thecreditmaven | September 29, 2008

Here’s Some Great Research Into What Is Causing The Economic Crisis

Posted by: thecreditmaven | September 26, 2008

How To Stop Those Pre-Approved Credit Card Offers!

When was the last time you received a pre-approved credit card offer in the mail? Was it yesterday  –  last week  –  last month? Did you know that these credit card offers are one of the causes of identity theft? According to the FBI, identity theft is the fastest growing crime in the United States.

Have you ever wondered, “How do I stop receiving these things?”

Here’s how. Go to:                   

                  

and go to the bottom of the page and click on: 

 

On the next page, you need to select one of the following:

  • Opt Out for a period of five years (done electronically)
  • Opt Out for life (requires form to be printed and mailed in)

Click the SUBMIT button at the bottom of the page.

On the next page, you’ll need to complete your personal information and click on the CONFIRM button. That’s it.

Now that wasn’t too bad now was it?

Earlier, I referred to pre-approved credit card offers as one of the causes of identity theft. Here’s the point I want to make. Let’s say you receive a pre-approved credit card offer in your mailbox. Well, before you get home to collect your mail someone goes through your mailbox and removes this offer. Now all that person has to do is complete that application form and change the mailing address and SHAZAM – now there are 2 of you.

The bad part is you won’t realize it until you try to get financing for a purchase and they access your credit report. All of a sudden you have one or more credit cards maxed out that may or may not have ever been paid. And if they haven’t been paid and have gone into a charge-off or collection status, that’s not only going to be reflected on your credit report it’s going to decrease your credit score.

Remember that this all started with a credit card offer that you never requested.

By opting out of pre-approved offers, it won’t totally stop all of the mail we get. HOWEVER, it will slow it down tremendously. Don’t give identity thieves an easy target to strike you with. It will also, hopefully save a few trees from being cut down.

Do you remember the song by The Supremes – Stop in the name of love? (before you break my heart)

A new one should be recorded:    Stop in the name of credit!  (before you lower my score)

Here’s to your Empowerment!!

Posted by: thecreditmaven | September 15, 2008

Don’t Fall For This One!

Look at a screen shot of an email that I received last Thursday………       The scam artists are still at it. Take a close look at this email – It has the Bank of America logo prominently displayed at the top of the email. If you happen to be a Bank of America customer, when this email popped into your Inbox you may be tempted to click on the link and start entering in the information requested.

DON’T DO IT!!

This is a very crafty way of getting your personal banking information (and who knows what else they may want you to enter) as is known as a “Phishing” attempt. Don’t fall for this. Thieves are lurking everywhere and many can end up in your Inbox trying to scam you.

What the person(s) didn’t know when they sent me this email is that I’m NOT a Bank of America customer.

If you ever receive an email like this, or one very similar to it report it to your IT department (if you work for a company). Or, if you are self-employed any phishing attempt can be reported to:

The United States Computer Emergency Readiness Team (US-CERT) is a partnership between the Department of Homeland Security and the public and private sectors. Established in 2003 to protect the nation’s Internet infrastructure, US-CERT coordinates defense against and responses to cyber attacks across the nation.

Don’t allow this to happen to you and don’t allow it to go unreported. Fight Back. Before you delete this type of email, report it so that someone somewhere knows about it and it can be investigated and hopefully one day the people responsible for this type of activity can be held accountable. In the meantime, be on guard.

Every individual in the United States, and even throughout the world, should fight back against this type of crime. Forward this information to everyone you know so that at least they can see a real example of a very lame attempt at getting information. I’ve received many of these in the past, but now I’m not putting up with it any longer.

Never give your personal, banking, Social Security number, financial, birth date, address, etc to anyone who CALLS you on the phone, EMAILS you, or FAXES you wanting that information. Even if they claim to be law enforcement, the IRS, or government official. TELL THEM TO TAKE A HIKE!!

The one and only time you should give out the aforementioned information is when you are the one who personally initiated the transaction or request. Either you called a company or you went to a bank, credit union, financial institution to enter into and/or request some type of transaction.

Always BEWARE – Danger is lurking nearby!! It could be in one of your next emails or that next phone call you get at home or work. Don’t even give them a chance.

Posted by: thecreditmaven | August 19, 2008

A Tool To Prevent Identity Theft

Identity theft happens when a individual’s personal information (i.e. social security number, bank account information, credit card, etc.) is used unknowingly and without permission to commit fraud and other illegal activity.

Let me ask you some questions: 

  • Do you personally know anyone who has been a victim of identity theft?  
  • Can you tell me (on average) how long does it take to recover from identity theft? 
  • What do you estimate the total costs are for resolving an identity theft problem? 
  • How can ID Theft be prevented? 

Estimates range from 7 to 12 million Americans become victims of Identity Theft (ID Theft) each year.  That equates to 140,000 to 240,000 individuals per state.  The costs that are associated with ID theft (on an individual level) are hard to determine because there is a tremendous shortage of reliable data.  Here’s a link to a GAO report, but even they can’t get a clear picture of what the true costs are:

How do you put a dollar amount on the following?

  1. Correcting damage to a credit report
  2. Time spent trying to resolve the matter
  3. Out of pocket expenses
  4. Hiring an investigator
  5. Being denied a new job 
  6. Insurance premiums increasing or insurance being denied

A big problem with identity theft is accurate reporting.  Some credit card companies may report losses associated with “lost or stolen cards” as bad debt when in actuality it was due to ID theft.   Businesses may not report losses due to ID theft to law enforcement agencies.  Individuals may be reluctant to make ID theft claims due to embarrassment or misunderstanding the law.  

I met a person a few weeks ago that told me she had been a victim of ID theft over one and a half years ago — and she is still trying to get some lingering issues resolved.   That’s Way Too Long!  In reality, many victims don’t even know they’ve had their identity stolen.  It could be weeks or even months before they realize what’s happened.  By that time, the thief has already done the damage.   Credit reports are trashed, credit cards maxed out, checks bounced at the bank, new accounts opened, savings accounts emptied and even felony crimes committed by the perpetrator.

Once the victim discovers what happened – it gets worse.   A report should be made immediately to local law enforcement.  After that they must contact all 3 credit bureaus.  Then comes the hard part — making phone calls, writing letters, leaving messages, returning phone calls, figuring out what state laws apply, sending faxes, and the list goes on and on.

Think about the fact that the victim could be your neighbor, someone that attends the same church as you or the person standing next to you in the grocery store check-out line.  ID theft victims are real people, like you and me, with real lives.  What effect does such a violation have on his/her life?  Trying to get through a work day is tough enough without trying to correct an unwelcome, complex situation.  Many victims are surprised to learn that they must prove that THEY are the victim and not the CRIMINAL. 

What ever happened to “innocent until proven guilty”?

The Federal Trade Commission has some Identity Theft recovery guidelines:

                              

It doesn’t have to happen to you.

You CAN deter ID Theft — Put a Security Freeze on your credit report.  Go to:

for the applicable state guidelines that relate to you.

When you apply a Security Freeze to your report, it effectively locks access to your credit report so that no one can get credit in your name or open up a new account in your name.

If you choose to add the security freeze to your reports, it must be done with EACH credit bureau (Equifax, Trans Union, Experian).  There are some minor costs involved and each bureau has certain requirements that have to be satisfied before the freeze goes into place.

This puts a huge BARRIER between you and ID Thieves.

Let’s say you put a security freeze in place on your credit report and then you decide you want to buy a car or apply for a mortgage?   The security freeze would have to be temporarily lifted so that your report can be accessed to determine if you qualify for a car loan or mortgage.   Small fees apply and be aware that it could take several minutes to several days for this to happen — refer to the state guidelines and the requirements of each credit bureau to temporarily lift the freeze.

After you make your purchase, be sure and put the security freeze back in place.  Keep in mind additional fees and time involved. As well as the requirements of the credit bureaus.

You can also permanently remove the freeze from your report.

The FBI has recognized that ID theft is the fastest growing crime in America.  By putting a security freeze on your credit report, you will make it harder for ID thieves to steal your identity.  Keep in mind that you have to take additional steps in order to lift the freeze but the protection that it offers, I believe, far outweighs the minor inconvenience associated with lifting the freeze and putting it back in place.

It’s time that US consumers make it harder on the criminals that prey on unsuspecting victims.  Wouldn’t it be nice if consumers made it impossible for ID Theft to happen?  Then maybe those theives would go get a real job.

Shakespeare must have known something way back when……………………………………….

But he that filches from me my good name / Robs me of that which not enriches him / And makes me poor indeed”          (Shakespeare, Othello, act iii, Sc 3)

Posted by: thecreditmaven | August 10, 2008

How Much Does Bad Credit Really Cost?

                                                                                                                                           

It depends. Are you familiar with risk-based pricing?

In the mortgage world, there is something called a loan level price adjustment (LLPA). What is a loan level price adjustment? In simple terms – someone with a low credit score is charged more versus someone with a high credit score.

Let’s look at a loan for $200,000 to purchase a property. Here is how a LLPA would affect you according to your credit score.

Credit Score             Additional Cost      $200,000 Loan Amt             

  > 720                        0.000%                           $0.00 

680 – 719                    0.500%                           $1,000.00

660 – 679                   1.250%                            $2,500.00

640 – 659                   1.75%                              $3,500.00

620 – 639                   2.500%                            $5,000.00

 < 620                        2.750%                             $5,500.00

Outrageous – or is it? Is this legal? Have you ever heard the saying, “He that hath the gold, makes the rules.” Well, in this instance the “He that hath the gold” is any financial institution that lends money and the “makes the rules” part applies to the above mentioned extra charges due to your credit score.

Fannie Mae has added these additional charges to loans they purchase from various lenders throughout the United States. I guess they might be trying to make up some of those loan losses that have been posted in the news recently. To read the entire matrix on LLPA and Adverse Market Delivery Charge: 

                                         

As you can very plainly see, that three digit credit score can cost you “mucho deniro”, or it can save you “beaucoup d’argent”. Note: see www.freetranslation.com for translation.

Just a few years ago there was a housing boom going full choke across the US. Literally, if you could fog a mirror and sign a name you were able to get financing to purchase a home. I’m talking:

  1. 580 credit score
  2. Stated Income
  3. Stated Assets
  4. 100% financing

Can you see now what is causing some of the heartache and pain we are experiencing today? With all of the billions lost, foreclosures rampant in metropolitan areas, bankrupt lenders, high level executives charged with fraud it is now up to the rest of us to make up the losses.

I can’t wait to see how much it takes to bail out Fannie and Freddie to get the housing industry rolling again.

In the meantime, before you get ready to buy a home or refinance an existing mortgage make sure your credit report is in “pristine” condition. Looking at the information above, you can’t afford to have a low credit score. The overall long-term cost is too great.

How much does bad credit really cost?……………………..  It depends.

Posted by: thecreditmaven | August 4, 2008

Is Repairing Credit Legal?

Credit Repair Organizations Act – Title IV of the Consumer Credit Protection Act (Public Law 90-321, 82 Stat. 164) Sec 402a reads as follows: 

         

“Consumers have a vital interest in establishing and maintaining their credit worthiness and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assistance from credit repair organizations which offer to improve the credit standing of such consumers.”

The Credit Repair Organizations Act was passed to govern credit repair advice and credit repair services that are facilitated by a third party. If providing advice and services were illegal, then there would be NO LAWS governing how to provide credit repair assistance within the boundaries of the law.

Wouldn’t you agree?

Can an individual repair their own credit? ABSOLUTELY. Why would I need a credit repair organization to do it for me? Please ponder the following questions:

  1. Have you read the “Fair Credit Reporting Act”in its entirety?
  2. If you have, do you fully comprehend the language and resulting power it gives you as to the credit bureaus and creditors accountability for the information that is on your credit report?
  3. Do you know the correct processes which are needed to dispute information on your credit report?

The Federal Trade Commission (FTC) enforces the varioius laws as they relate to Credit Repair Organizations and the Credit Bureaus (Equifax, TransUnion and Experian). It seems that there are problems on both sides of the fence.

When you have some time, go to Google and perform the following searches:

  • Credit Repair Company lawsuits
  • Equifax lawsuits
  • TransUnion lawsuits
  • Experian lawsuits

 

On the Credit Repair Organizations side, the FTC is finding problems with many companies that are not operating within the boundaries of the law. However, there are some reputable companies, some “wannabes” and some that shouldn’t be in the credit repair business at all.

Likewise, on the other side of the fence the FTC and many consumer groups have found problems with how the three credit bureaus are operating under their set of governing laws.

Look at it this way – The credit bureaus collect data on consumers and businesses. They earn revenue by selling this data and other additional services to consumers and businesses for a fee. At the same time, the credit repair companies are earning revenue by providing services to consumers that effectively improve their credit. Why do consumers need to improve their credit? Refer to my earlier post “What’s so important about a credit score”.

My mother always told me to be careful who I associated with. We can’t really choose which credit bureau we associate with because all three have information on us. In the case of credit repair companies, be sure and do your homework. As I said earlier, an individual can dispute information with the credit bureaus. But don’t be surprised if the results you receive aren’t what you expected, frustration becomes a problem when dealing with all three bureaus and you spend your valuable time working on this when you could be spending time on something else more worthwhile.

If you needed to have a root canal done, you wouldn’t do it yourself? If you needed to fix the transmission on your car, you wouldn’t do it yourself would you?

If you need credit repair advice and assistance, seek out those who know what to do, how to do it and let them take care of it for you. Once you have your credit report “in shape”, do everything humanly possible to keep it that way.

Oh, and don’t forget to go to the dentist for those checkups and keep that preventative maintenance up-to-date on your vehicle.

Posted by: thecreditmaven | July 28, 2008

You May Be Eligible For Cash or Free Credit Monitoring!

                                                   

A settlement worth at least $75 million (do I hear a cha-ching out there?) has been reached with Trans Union and Acxiom Corporation in a class action lawsuit. The U.S. District Court for the Northern District of Illinois has preliminarily approved a Class that includes ALL CONSUMERS who had an open credit account or an open line of credit from a credit grantor (including, for instance, auto loans, credit cards, mortgages, and student loans) in the United States anytime from:

January 1, 1987 to May 28, 2008

If the settlement gets final approval, it will affect Class members’ rights. You may be a member of the Class. If you are a Class member, you may sign up for credit monitoring and other benefits, and/or a possible cash payment.

The Court will have a hearing on September 10, 2008, to decide whether to approve the settlement, so that benefits can be issued. Class members may object to the settlement or ask to speak at the hearing. Objections must be mailed by August 22, 2008.
Go to http://www.ListClassAction.com or call 1-866-416-3470 for more information.

 

 

 

Posted by: thecreditmaven | July 17, 2008

What’s So Important About A Credit Score?

So what’s your credit score – 550, 780, 610, 826?

What is so darn important about a three digit score? Is the information on my report correct? Why does my report even need to have a score at all?

All very good questions indeed.

The importance of your three digit score is this – it will either:

A – Let you have access to the best financing options available, or
B – It will limit those options and those options will cost you more out of your pocket.

Which would you prefer? The former, of course.

According to PIRG (Public Information Research Group, Washington, DC):

* Seventy-nine percent (79%) of credit reports contain errors or mistakes

* Twenty-nine percent (29%) of credit reports contain serious errors, false delinquencies, or accounts that did not belong to the consumer

* Twenty percent (20%) of credit reports were missing major credit, loan, mortgage or other information to demonstrate the credit worthiness of the consumer

Download the Full Report

SAY WHAT?? IS THAT TRUE??

A study performed by the Consumer Federation of America and the National Credit Reporting Agency on 502,623 consumers seeking mortgage credit found:

“Wide variations in the credit scores for a given consumer among the three national credit repositories (Experian, Equifax, and Trans Union):

  • the AVERAGE DISCREPANCY for all consumers was 41 points
  • credit scores for nearly ONE in THREE consumers varied by 50 points or more
  • credit scores for ONE in TWENTY-FIVE consumers varied by 100 points or more

Download testimony of Stephen Brobeck Executive Director of the Consumer Federation of America

When was the last time you checked the accuracy of the information on your credit report?

2 months ago – 2 years ago – 2 days ago – NEVER?

Who is responsible for ensuring that the information on your credit report is accurate?

The Credit Bureaus – Your Creditors – The Government – Your Mom & Dad?

The reason that everyone has a credit score is to be “categorized”. High scores get to call the shots, Middle scores have a little say-so and Low scores will have to take what they can get (if they can get anything at all).

Everyone has the potential to have a 700+ credit score.

According to Experian’s National Score Index – the average credit score in the US is 693. This number was calculated from a representative sample of 3 million US consumer’s credit profiles.

It would be great if a neutral third party organization were able to calculate the average credit score in the US. It’s hard for me to accept the average credit score is 693 when foreclosures, delinquencies, and bankruptcies are increasing.

So, back to the original question – “What is so important about a 3 digit score?”

Your financial future, financing options, and your feeling of self-worth are extremely dependent on which “Category” your credit score resides.

Make sense?

“As a financial professional and consumer advocate, I have an educational mission; my purpose is to not only assist consumers who want to improve their overall credit standing, but to elevate the practice of credit management.”

~ Robert Landreth

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