Credit Repair – What You Need To Watch Out For

by Guest on November 5, 2012

Consumers are often looking for ways to repair and improve their credit scores, and many seek the assistance of a credit repair company to handle the process. As the number of consumers looking for help increases, so does the number of fraudulent companies looking to take advantage of vulnerable individuals. In order to make sure that you only deal with a trusted and reputable company please take the following into consideration:

Common Sense Due Diligence: Just because a company has a website does not automatically make them a legitimate business. Many of these companies offering credit repair help are not even real businesses. Do a simple “who is” check on their website domain. If they are a legitimate company it will notate that the company owns the domain, and provide full contact information for the business including a phone number, email address and business address. Make sure that the information presented matches the information on the website. If the domain search reveals that the domain is registered private and there is no information available it is a huge red flag that you are not dealing with a real company. If the company were operating legally then why would they hide their information? Do you think companies such as Best Buy or Target hide their website registration information? Of course not! Why wouldn’t a company want potential customers to be able to track them down, unless of course they were hiding something?

Do You Know Your Mortgage Credit Score?

by John Kiernan on August 22, 2012

mortgage approvalThere’s a new credit score in town, ladies and gentleman, and it’s just for mortgages. The score is formally called the FICO Mortgage Score Powered by CoreLogic, which brings to mind the mouthful of a name change the Anaheim Angels underwent in 2005 when they became the Los Angeles Angels of Anaheim, but that’s a whole other story.

This new score is said to better predict mortgage applicant risk and is obviously looking to capitalize on the recent memory of the housing crisis and the ensuing Great Recession. It supposedly does so by incorporating information that is not typically included in credit scores, such as rent and utility payments and certain public records.

What to Do if You Lose Your Wallet

by Odysseas Papadimitriou on June 21, 2012

lost walletWait, where is it? Back pocket? Nope. Purse? Not there either. Even a quick sweep of the house comes up empty. You’ve lost your wallet, and the panic is starting to set in. As your mind races through all of the places where you could have left it, you wonder what to do if you can’t find it. That’s a very good question, and one which we should all know the answer to (especially the ADD folks among us)!

When you lose your wallet, it’s not just a folded piece of leather that you’re missing, but also your IDs, debit card, credit card(s), gift cards, cash, health insurance information, family photos, and maybe even your Social Security card. The ramifications of your loss are therefore many, and to be safe you unfortunately have to operate under the assumption that it’s been stolen. That necessitates a sort of lost wallet triage.

Occupy Wall Street & Credit Score Reform

by Odysseas Papadimitriou on March 21, 2012

Credit Score ReformYes, the whole Occupy Wall Street thing seems to be losing a bit of steam, but did you hear about the changes the organization’s Alternative Banking Group proposed we make to our nation’s credit reporting system? They want a major overhaul, one that shifts credit scoring duties to the federal government, and they have issued a list of 10 recommendations for how this should be brought about. I’ll give you the highlights: full transparency is needed in regard to how credit scores are calculated, consumers should have free and unlimited access to their credit reports, conflicts of interest related to credit scoring bodies should be eliminated, and we should make sure that credit reporting practices are not somehow racist, sexist, etc. So, do they have a point?

Certainly, the credit scoring system needs to be fixed, but not necessarily in the manner recommended by the Occupy Wall Street Alternative Banking Group. You see, the group is dead on when it says that the new Regulation V (Fair Credit Reporting Act) is inadequate in that it merely transfers the authority to regulate the collection and use of consumer credit reporting data between federal agencies (from several different agencies to the Consumer Financial Protection Bureau). However, the Occupiers are off-base in suggesting that we centralize credit scoring and make the underlying formulas public. This would only make it easier for people to game the system, which would make existing credit scores less useful to banks and lead more of them to create their own proprietary scores that consumers would have no way of accessing.

Fed Broadens Free Credit Score Rules

by Guest on July 30, 2011

credit scoreDo you remember the Dodd-Frank Wall Street Reform and Consumer Protection Act? Probably not, so here’s a quick refresher. Signed into law by President Obama in 2010, the Dodd-Frank Act brought sweeping change to how financial markets are regulated in the United States.

Included in the act was a well-known provision called the “Risk-Based Pricing Rule”, which entitled many consumers to obtain free credit scores if they were either declined credit or offered less than favorable terms. If the lender didn’t provide a free score, they were required to at least send a notice that allowed applicants to obtain free credit reports instead.

8 Reasons Why You Should Use a Credit Card

by John Kiernan on May 13, 2011

New Credit CardsThroughout the financially tumultuous past few years, the credit card industry has been the subject of a great deal of attention in the press, Congress and the court of public opinion. The system admittedly was broken. Shady credit card companies, hiding behind a conspicuous lack of transparency, were using bait-and-switch tactics and confusing policies to take advantage of their customers. Now that the Credit CARD Act of 2009 has eliminated most of these issues, we can again being to appreciate just how useful credit cards can be. So, without further ado, 8 reasons why you should use a credit card as long as you trust yourself to spend wisely.

1. Credit building

Fed Rules Promote Accurate Underwriting, Not Gender Inequity

by Odysseas Papadimitriou on March 2, 2011

HouseholdThere has recently been a great deal of talk about rules proposed by the Federal Reserve that seek to require credit card companies to consider the merits of applicants based on individual rather than household income. These rules, critics contend, stand to significantly affect stay-at-home mothers by preventing them from establishing credit history in their own names, which would be extremely important to garnering a loan, renting or buying a property, and/or landing a job in the case of divorce or the death of a spouse.

Given that 2010 Census figures show men to be the sole breadwinners in 28.2% of couples with children under the age of 18 and women to be the only earners in about 4% of such families, roughly 7.3 million women and 963,000 men would face a difficult time garnering access to credit if the claims made by the rules’ detractors prove to have merit.

12 Things That Will Never Affect Your Credit Score

by Guest on February 17, 2011

financial-tipsYour credit score is important. You’ve heard it a thousand times, from your parents, financial advisors, TV advertisements, and seemingly everyone in between. They are, of course, correct. Your credit score impacts how much you will pay for a credit card, mortgage, or any number of loans. Many things affect your credit score, but there are also numerous factors that play no role in how this all-important number is computed. Here are twelve things that you don’t need to worry about when it comes to establishing a good credit score.

Anything not in your credit report - There is a wide range of information in your credit report, including payment history, level of indebtedness, length of credit history, and types of credit used. Your credit score won’t take into account anything outside of the credit report.

How and When to Dispute Credit

by Guest on February 8, 2011

improve-bad-creditKnowing when and how to dispute accounts on your credit report can make a huge difference in getting inaccurate information removed from your credit profile. Despite some promises to the contrary that you might come across, dispute letters are not the be-all-end-all of the credit repair process. There is no special formula to writing a carefully-worded argument that will convince the credit bureaus to drop your bad credit history as soon as they receive it.

Yet this myth continues to persist, so I thought I’d take the time to set the record straight on disputing your bad credit history. The trick to writing dispute letters that work is that there is no trick; it’s about knowing how and when to use them.

Don't Learn Your Credit Card Lesson the Hard Way

by John Kiernan on February 4, 2011

credit-lessonI received an e-mail just the other day from a nice woman living in Milwaukee, Wisconsin (Go Pack!) who wanted advice about efficiently improving credit standing. You see, her son was a senior in college and had opened a 0% APR credit card because he thought it sounded too good to pass up. He then proceeded to rack up charges which he could not pay for. However, instead of telling his parents about his credit card debt and asking for help, he just ignored the situation, hoping it would go away. After all, he was just a kid and could probably say “I’m sorry, I didn’t know any better,” and all would be forgiven, right? Well, that seemed to be the case for a couple weeks until more and more letters started coming from his issuer using words like “past due” and “account suspended.”

At this point, the young man (whom we’ll call Sean) finally consulted his parents. “What should I do?” he wondered. They told him that he needed to become current on his bill in order to avoid falling deeper into delinquency and incurring more significant credit score damage. Since Sean didn’t have much money of his own, his parents loaned him the cash, effectively closing the account, under the condition that he find a job at school so that he could pay them back.

Credit Card Applications: After Three, Think Security

by John Kiernan on November 23, 2010

New Credit CardsI recently got a call from a college friend who wanted advice on how to get approved for the best credit card possible . He said he had applied and applied but for some reason had still not been given use of a single card. What should he do differently, he wondered, when applying for cards in the future?

My advice to him: immediately stop applying and open a secured credit card because it provides both guaranteed approval and a safe way to rebuild credit.

Recovering Your Credit After the Great Recession

by Kimberly Cole on September 24, 2010

improve-bad-creditAs we all know, the Great Recession has deeply affected consumers credit scores, and therefore, their access to credit. A recent study from FICO, the largest credit scoring company, shows that an increasing number of consumers fall into the bad credit category. The most recent count shows that a whopping 25.5 percent of consumers have FICO credit scores below 599 – that’s nearly 43.4 million people who are considered high-risk customers for lenders.

What makes these numbers worse is that they are likely to grow in coming months, as financial missteps may not be reflected in credit scores for several months. With 26 million people out of work or underemployed according to the Department of Labor, there are a lot of people struggling to make payments without an income.

Think You’re Immune From Identity Theft? You’re Not!

by Guest on September 13, 2010

swiping-credit-cardNo one in America today is immune from identity theft – thieves continue to come up with new ways to steal the information they want.

Stealing your purse or wallet is, of course, the simplest method, but since you’ll notice that and cancel your credit cards, it’s also the least lucrative. Therefore, they prefer methods that you won’t catch unless you’re keeping a close eye on both your credit accounts and your credit report.

FreeCreditReport.com Flip-Flops

by Guest on May 17, 2010

freecreditreport-dudeThis is a guest post by Joshua Heckathorn, who runs Creditnet.com and holds an MBA and B.S. in Finance. Creditnet is a free resource for anyone who wants to learn more about credit or debt and compare hundreds of the best credit cards online. When Josh isn’t glued to the screen of his Mac, you’re bound to find him at the nearest rock-climbing wall or sushi joint around Seattle.

It’s been just over a month since new rules took effect requiring free credit report sites to prominently disclose that there’s only one place to truly get your credit report for free—AnnualCreditReport.com.

Secured Credit Cards Will Become The New Student Credit Cards

by Odysseas Papadimitriou on July 10, 2009

secured-credit-cardsBecause of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, the process of getting a credit card is going to drastically change for people under 21 years of age.  Starting on February of 2010, people under 21 will not be allowed to get a credit card without a co-signer or proof that they can repay their credit card debt.  At Wallet Blog we have already made it clear that this part of the credit card law is completely unfair and ridiculous as it singles out people under 21 years of age for special treatment, even though they are legally adults.  

No matter what politicians decide, credit history is going to continue being a critical factor in determining loan amounts and loan interest rates (as it should be).  However, since it is now harder for people under 21 to get credit cards, they will have less time to build up their credit history and will be at a disadvantage for anything that requires a credit check (like getting a loan or even renting an apartment).

What you need to know about the New FICO

by Odysseas Papadimitriou on February 10, 2009

What you need to know about the New FICOThere has been a lot of press surrounding the release of Fair Isaac’s new credit scoring system, FICO 08, and in my opinion the new FICO has been overhyped.   Nevertheless, both consumers and creditors should be glad to have it since it is a marginal improvement in the critical area of credit risk analysis.

The benefit of an improvement in this area must be understood in light of the credit industry’s reliance on the shared responsibility of all borrowers. In such a system, even the most responsible borrower suffers due to flagrantly irresponsible behavior by others.  Wide spread credit problems, then, have a disastrous effect for all borrowers—those who pay their bills on time as well as those who don’t.  Right now, the general condition of credit throughout America is hurt by the awarding of loans to individuals who can’t pay them back.  Any improvement in this area will better separate people who are good credit risks from bad so that banks can do better in distinguishing who should get a loan.  Ultimately, this leads to fewer losses for the banks and allows them to pass savings on to borrowers who are reliable. 

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