Category: BQ News

By Paul Oster / NEW YORK DAILY NEWS
Tuesday, August 6, 2013, 10:12 AM

Make sure you are making the payments so that you can keep track of the loan.

Often parents don’t understand that student loan debt is not dischargeable in bankruptcy.

By Kathy Weyer

Do you know your credit score? It’s just as important as your blood pressure, heart rate and sugar levels. And it can be the deciding factor as to whether you’ll get that loan, that job or that place to live.

When you apply for credit, the lender will pull up information held by three credit bureaus. This information is tied to your social security number. Whatever credit you’ve had in the past reflects how a lender will view you today.

The three credit bureaus are Equifax, TransUnion and Experian. If you are late or default on a loan, the credit bureau(s) are notified and your credit report is dinged.

You can get a free copy of your credit report from all three agencies at www.annualcreditreport.com, though they will not include your FICO scores. The Fair Isaac Corporation, now known as FICO, uses a proprietary formula to compute this. Catherine Allen from M Financial Planning Services, Inc. of Marlton says it’s well worth the $30 or $40 to get the three FICO scores along with your credit reports to track your credit standing.

When you get your reports, look at every line item and every column. “Be aware of the fact that you may see false, inaccurate or negative information furnished to the three credit bureaus. At least 70% of those reports are incorrect,” says Paul Oster of Better Qualified, LLC, specializing in business and consumer credit services in Eatontown, New Jersey.

You can correct the reports on your own, but it’s a Herculean task. Nonetheless, our experts tell you how:

1. Really look at the credit reports. “Every consumer has the right to have every piece of information verified and validated by the creditors,” says Oster. “The amount of trade lines and the information they contain can be overwhelming, and it’s going to get even more so. Software packages are now being put in place to start taking credit information from utility companies in the near future.” In other words, our routine financial doings are under the microscope more and more.

2. Identify negative and false or inaccurate information and get aggressive in correcting it through the credit agencies. Write to the credit bureau and dispute the erroneous report. “You have a right to include a 100-word statement to the credit bureau to tell your side of the story. Be very precise and try to write less than 100 words. It’s their job to investigate. If it’s fixable, that’s in your favor,” Allen says.

3. If that doesn’t produce results, contact the Federal Trade Commission and/or the newly-established Consumer Financial Protection Bureau. Both agencies protect the consumer, but are different in approaches. (See sidebar for info on how to reach both.)

4. “If you know you’ve handled a particular debt well, make sure it’s reflected on the credit report,” Oster warns. “You want that positive payment history to show up, because 15% of your credit score is a reflection of your payment history.”

As stated earlier, credit is issued on your social security number. But what happens if you have joint accounts, as most married people do? “Make sure you establish your own credit,” says Catherine Allen. “Have credit cards in your own name, perhaps even a separate checking and/or savings account. The most important thing is to establish your own credit rating.

“Obviously on large ticket items you may have to apply in two names in order to qualify, but if you can, keep all credit issues separate, including checking and savings accounts. This is especially important for women.”

Divorce, identity theft, co-signing for someone else, overspending, a natural disaster, health issues, medical bills, unemployment…all these can cause financial hardships that don’t allow you to fulfill your financial obligations and impact your credit. So what can you do?

“First off,” says bankruptcy attorney Michael Katz of Paul & Katz PC, “don’t stick your head in the sand. Take an active role in correcting or amending the report.”

“If you find a negative item on your credit report that you know is incorrect, call the vendor and ask for help. They’d much rather get some money than go to court and/or end up writing off the debt, so they may work with you,” says Allen. “Plead your case politely. If the person on the other end of the phone won’t work with you, ask to speak to his or her supervisor. Get assertive.” She also advises to ask for the removal of late fees, which show up on your credit report, a flag of sorts to reviewers.

Keep Fighting

An investigative report originally broadcast on February 10, 2013 on CBS’ 60 Minutes indicated that 20% of people attempting to correct errors on their credit report were unsuccessful and ran into severe difficulties in their attempts to make corrections. An eight-year government study documents at least 40 million mistakes, 20 million of them significant, meaning, if not corrected, the consumer’s ability to enjoy the good credit they had worked hard to get and maintain is in jeopardy.

In response to the report, Oster says, “The bureaus are actually circling their wagons and showing some signs of complete disregard (to the 60 Minutes report).” Oster and his company are proactively engaging the credit bureaus through the court system; they just filed their fourth lawsuit in Federal Court and are building a class-action suit.

“The good news is, according to these statistics, 80% of disputes are corrected, so go ahead and follow the protocol, and make sure you take advantage of the free credit reports,” says Allen. However, if your dispute is not answered or you get a confirmation that the error is, in fact, correct (and you know it’s not), it may be time to call an attorney. Katz says, “People whose credit reports are incorrect often have no recourse but to file lawsuits to have the problems corrected and recover whatever damages the law allows. The cost of hiring an attorney should not deter anyone whose credit report is inaccurate, and that cost will probably be outweighed by the time that person would spend and the hassle and frustration that person would experience dealing directly with the credit reporting agency.”

Maintaining Good Credit

The magic FICO score, according to Oster, is 720. When you see advertisements for low rates on cars and credit cards, that offer is for people who have a FICO score of 720 or higher. If your score is lower, you will pay higher rates. He advises a couple of things to remember when you are thinking about your credit:

1. Never close out a credit card, no matter how mad you get or how high the rate. Pay it off, and then don’t use it. “One secret the credit bureaus don’t tell you is to get a higher number on your FICO score your outstanding debt needs to be under 30% of all available credit. So if you have a $1,000 credit line on a card you don’t use, keep it; it ups your total credit available amount and improves your ratio when comparing outstanding debt to total amount available,” he says.

Katz notes, however, that if you are going to maintain a credit card that you do not intend to use, “You may need to periodically make single charges to keep the account open, because some credit card companies close accounts that have zero balances and that have been dormant for a certain period of time. If you want to keep a credit card that you do not intend to use, then you should make a single purchase every year and pay off the balance immediately. You should also do that if you receive a notice telling you that your account will be closed due to inactivity unless you use the account again.”

2. Don’t look around for various deals and apply for credit more than once a year. Once you get financing for a new car, stop opening any other new accounts. Oster tells us, “There are statistics that show if a person applies for some kind of credit six times or more a year, they are more liable to file for bankruptcy.”

3. Don’t co-sign for anyone unless you have excellent credit and know the person intimately and are prepared to take on the debt yourself. Sign up on the creditor’s website to be able to track payment history and step in if you see it’s late. Remember, you’re protecting your own credit, not bailing someone out.

4. “You may see differing reports because some vendors will report to only one credit bureau, often different by 100 points or more,” Oster says. The credit reports are an expense to a business; they often don’t subscribe to more than one bureau, so follow all three of them diligently.

5. Use your bank’s automatic pay system to ensure you always pay on time. Schedule recurring payments to be made every month on the same date.

6. If you decide to hire a credit counseling agency, make sure it’s a legitimate one. According to the FTC website, when you hear a commercial for a credit repair service that says…

“We can remove bankruptcies, judgments, liens and bad loans from your credit file forever!”
“We can erase your bad credit—100% guaranteed.”
“Create a new credit identity—legally.”
…keep your guard up. “They’re very likely signs of a scam. Attorneys at the Federal Trade Commission—the nation’s consumer protection agency—say they’ve never seen a legitimate credit repair operation making these claims.”

7. Talk to your bank about credit protection, we suggest reaching out to the 5 star bank online to get all the details.

8. Keep as much credit as you can in your own name and protect your identity.

Bankruptcy: The Last Resort

“Sometimes bankruptcy is the best decision to get a fresh start, no matter how distasteful,” Katz says. “It’s the last resort. If your debt becomes significant, and you have seen a credit counselor and there is no realistic way to pay off the large debt, your last resort is to file for bankruptcy to discharge the debts and get a fresh start.”

Katz advises a couple of things to protect yourself:

1. Hire an attorney who specializes in bankruptcy. They know how to get exemptions, such as allowing you to keep your car.

2. When the bankruptcy petition is filed, the court appoints a bankruptcy trustee who will work with you. “Complete cooperation and an open door are vital to ensure the desired discharge of debts,” he says.

3. Keep getting those free annual credit reports. If the credit bureau comes back to you saying the negative report is correct, and you disagree, you have the right to file a statement that is recorded on the credit report stating your case. “Bill was paid, product was defective, judgment was satisfied, etc.” The mere fact that you took the time to attempt to correct it will sway future creditors.

Like your heart rate, your blood pressure and your sugar levels, the numbers reflected on your credit report need to be measured, recorded and adjusted as they move up and down the FICO credit line.

The Stats
30% or less should be the outstanding debt ratio to all of your available credit in order to get a higher FICO score*

53% of American women are the breadwinners in their family (which is another reason why it’s very important to have control over credit in your own name). ~

70% is a conservative estimate of credit reports that are inaccurate*

80% of those who attempted to correct errors on their credit report were successful+

* Paul Oster, Better Qualified, LLC
~ Catherine Allen, CFP, M. Financial Planning Services
+ Michael Katz of Paul & Katz PC

[ Learn More About It #1 ]

From the Federal Trade Commission:
DIY Credit Repair
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself#fraud

From the Consumer Financial Protection Bureau:
File a complaint about your credit report:
https://help.consumerfinance.gov/app/creditreporting/ask

[ Learn More About It #2 ]

The 3 Credit Bureaus:

Experian
PO Box 2002
Allen, TX 75013
888-397-3742
www.experian.com

Equifax
PO Box 740256
Atlanta, GA 30374
800-685-1111
www.equifax.com

TransUnion
PO Box 2000
Chester, PA 19022
800-888-4213
www.transunion.com

Our 3 Experts:

Catherine Allen, Certified Financial PlannerTM
M Financial Planning Services, Marlton
Catherine.Allen@lpl.com
Catherine Allen is offering Girlfriendz readers a free customized checklist if you contact her and mention this article. Checklists are for those getting married or getting divorced, for those who’ve lost a spouse, or even for those just getting started.

Michael A. Katz
Law Offices of Paul & Katz, PC, Voorhees
www.paulandkatzlaw.com
Michael Katz is offering Girlfriendz readers a free consultation if you contact him and mention this article.

Paul Oster
Better Qualified, LLC, Eatontown
www.betterqualified.com
Paul Oster is offering Girlfriendz readers a free consultation, analysis and kit to repair bad credit if you contact him and mention this article.

Are you getting ready to apply for a mortgage? Predict your monthly mortgage payment with just a few pieces of information using mortgage calculators. Have you obtained a recent copy of your credit report to check for inaccuracies?  If not, you might be surprised by what you find. And if you’re still a student and are looking forward for procuring a student loan, then do so with care, for Private student loan forgiveness is a hard thing to come by.

A February 2013 study from the Federal Trade Commission (FTC) found that:

• five percent of consumers had errors on one of their three major credit reports that could lead to them paying more for products such as auto loans and insurance.

• one in five consumers had an error on at least one of their three credit reports.

So what exactly is a credit report and how does it differ from my credit score?  A credit report is a person’s documented debtor history. It includes every credit card, student loan, charge card, mortgage or auto loan or lease for which you’ve ever been named as a signer or co-signer. Details include starting amounts owed and current balances; monthly payment history for individual accounts; including any record of delinquency. Credit reports also include information regarding known places of residence and employment; judgments and tax liens assessed by courts; and any public record of bankruptcy, so for some people is better to try other mortgage options and get help from this mortgage business in North Perth.

A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information obtained from credit bureaus.  For purposes of a mortgage application, the three credit scores used by mortgage lenders are the Equifax Beacon; the TransUnion Empirca; and, the Experian FICO.

Under the Fair Credit Reporting Act (FCRA), All consumers are entitled to one free disclosure (i.e. credit report) every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. Consumers who have had their application for credit, insurance or employment denied because of “poor credit” may apply for additional free credit reports.

certain persons may request a free credit report anytime, with no limit. This includes unemployed persons; persons looking for work within the next 60 days; and, individuals receiving government welfare assistance.

For further information, please either visit www.ftc.gov/credit or review A Summary of Your Rights Under the Fair Credit Reporting Act.

How to Fight Credit Report Errors and Inaccuracies

All consumers should review their credit reports on a regular basis to identify any inaccuracies and should report any errors as soon as possible to the credit bureau.  It is very important to clearly indicate the error (i.e. highlight the inaccuracy in yellow); make notes in the margins; and to include any supporting documentation that will substantiate your claim.  Finally, you must submit your request to the credit bureau in writing and  should send your correspondence with delivery confirmation (ideally requiring the name and signature of the person who received your letter).

Abraham Lincoln was quoted as saying: “He who represents himself has a fool for a client”.  Sometimes it’s best to let the experts in a particular field such as credit repair and restoration take on the fight with the credit bureaus for you.  Companies such as Better Qualified have been representing consumers for years with amazing results. 

Better Qualified has developed a program that will help you restore your credit and save money. Unlike other competitors, the Company takes a personal approach to the credit restoration process and work with its clients every step of the way. This consultative method ensures that clients receive the best results. The Company’s clients complete the program knowing how to maintain good credit long after their term with Better Qualified ends.

Better Qualified CEO, Paul Oster was recently featured on ‘Varney and Company’ on Fox Business discussing the importance on good credit and the proposed changes in the credit reporting industry. Fox Business is seen in 50-million homes nationwide.

Better Qualified has been creating quite a stir recently in the credit repair marketplace and has several other videos featured on the website.

Legal Bistro is an online community where consumers with legal needs are able to post their cases anonymously. The service is 100% free for consumers. Lawyers use the site to find new clients. Our motto is When Lawyers Compete, You Win!

By Blake Ellis @CNNMoney March 11, 2013

 

 

A new credit scoring model will potentially boost scores for many credit applicants and help establish credit for millions of people who previously had little or no credit history.

The new scoring model will be used in the latest version of the VantageScore, the credit score created by the three major credit bureaus — Experian (EXPGF), Equifax (EFX) and TransUnion.

Currently, debts that go into collections, even if they are paid off, are factored into all credit scores for up to seven years, said John Ulzheimer, president of consumer education for SmartCredit.com. But VantageScore 3.0 will no longer factor these accounts into a consumer’s score if the debt was paid in full or settled, just as long as the balance is zero.

Also, natural disaster victims will now be able to benefit from good credit behaviors — like making payments on time, despite the hardship — but will continue to be protected against negative accounts. Previously, both negative and positive accounts were ignored in the aftermath of natural disasters, making it difficult for victims to improve their credit scores.

With big natural disasters like Hurricane Sandy hitting thousands of consumers in the Northeast last fall and millions of others with paid collection accounts on their credit reports, many people are likely to see their scores improve under this new model, said Ulzheimer.

“Consumers who have a zero-dollar balance on collections and no other negative information on their credit reports should see their VantageScore’s increase significantly,” he said.

But the boost only matters if a lender uses the new VantageScore. While FICO is still the most widely used scoring model, the VantageScore is gaining ground. It’s currently used by seven of the top 10 financial institutions, six of the top 10 credit card issuers and four of the leading auto lenders and mortgage lenders, according to its website.

VantageScore’s new model will also weigh rent and utility payment records, and public records like bankruptcies for people with very limited credit histories. This will allow it to score as many as 30 million people who previously couldn’t get a credit score, and potentially help them qualify for more competitive credit rates, said Ulzheimer.

Other score developers, like FICO, may follow suit.

FICO announced Monday that it will begin looking into ways of factoring in alternative records to calculate scores for those without — or with limited — credit files.

Meanwhile, VantageScore is changing its scoring range to align with FICO’s 300 to 850 range. Earlier versions range from 501 to 990, often causing confusion for consumers and lenders since most are more familiar with FICO’s range.

“This is like changing your speedometer from kilometers per hour to miles per hour, it just makes more sense to American consumers and American lenders,” said Ulzheimer.

 

 

DID YOU KNOW… Your credit score can cost or save you thousands of dollars?

 

As most of you know, you carry three FICO scores, one from each of the three Credit Bureaus: Experian, TransUnion, and Equifax. Each of these scores is based on information the bureau keeps on file about you and, as this information changes so does your score. These scores affect the terms and conditions (interest rate, amount, etc.) lenders will offer you at any given time.  What you might not know is that the credit bureaus are terrible at maintaining, updating, and ensuring the accuracy of your information.  Between 25%-75% of all credit reports contain false and inaccurate information.*

 

This past Sunday February 10, 2013 60 Minutes did a segment on the credit reporting industry and, what they found might be quite a surprise to you.  There are many experts out there that believe the credit bureaus are violating the Fair and Accurate Credit Reporting Act every day.  These violations can be costing you thousands of dollars every year.  We live in a credit driven world and, your credit scores have become the most important numbers in your life.

 

How do you know if your credit scores are costing you money every month? Well, you can go to sites such as www.annualcreditreport.com and get a free report but, keep in mind these reports DO NOT give you your FICO score.  The FICO scores are the standard score in the US, used in more than 90% of lending decisions to determine your credit risk. Called “FICO scores” because most credit bureau scores used in the US are produced from software developed by the Fair Isaac Corporation.  Also, have you seen the commercials for FREE credit reports on TV?  I’m sure you realize that nothing is actually FREE but, you probably don’t know that these companies are owned by Experian, TransUnion, or Equifax.  Experian owns www.freecreditreport.com and TransUnion owns www.truecredit.com. These spin off companies are aimed at “helping” you check your credit (once again, they do not supply you with your actual FICO score, and most are lacking ALL of your credit information). What these “money making arms” of the credit agencies are REALLY doing is sucking you into one of their services so, they can sell you one of THEIR premium products!

 

What can you do about it?  When was the last time you checked your reports?  You have to know what’s on your reports and you have to know what your credit scores are. There are 200 million Americans who have a credit report in the US but, only 44 million people actually checked their reports last year   You can’t assume that everything is o.k.  What to do if you want to dispute or ensure the accuracy of any information on your credit report.  Well, here is the fun part, you have to go to EACH of these agencies and go through the dispute process.  Best said by Steven Kroft of 60 minutes, “The problem is that it’s not really within the power of the average person using this system to fix the mistakes,” says Kroft. “You feel like you’re up against this machine, and there’s no way to break through.” Besides having financial consequences, the whole dispute process takes an emotional toll on people. It’s just really hard sometimes, to get these things fixed, you feel like you’re up against this machine and there’s no way to break through. After awhile, I think some people start to question their own sanity!”

 

Has this happened to you? If it hasn’t I guarantee you know someone it has happened to.  The smallest mistakes can cost you thousands over the length of your loan, and these mistakes can keep you from getting that home, apartment, car, and these days even that job you have always wanted! These two links are from a recent 60 Minutes, watch and be ready to me amazed!

 

We can help.  Better Qualified is an accredited business with the NJ BBB with an “A” rating.  Our CEO Mr. Paul Oster is a certified FICO Pro who has been featured on Fox Business News, Foxnews.com, CBS radio, and the Wall Street Journal Report.

 

http://www.cbsnews.com/video/watch/?id=50140711n

http://www.cbsnews.com/video/watch/?id=50140748n