Category: Credit Restoration

5 Ways to Build Your Credit Score

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When it comes to improving your credit score, consumers are left in the dust. Most individuals have basic knowledge of what can destroy their credit. Few know the steps to increase their credit score. Here’s 5 tips that will help build your credit score to where you would like it to be.

1. Positive Trade Lines of Credit

Without positive trade lines of credit, you cannot have a good credit score. Your credit score is determined upon the following factors: payment history, amounts owed, length of credit history, new credit, and types of credit used. The more positive trade lines of credit you have, the better. Does that mean you should go out and apply for loads of credit? Not exactly.

FICO chart to build your credit

The more credit you apply for, the more inquiries you will acquire on your credit report. The more inquiries on your credit report, the lower your score. Also, anytime you take on new debt, your scores will initially see a drop. It is not until a few months of on time payments that you will start to see them increase again.

Individuals with no or few trade lines of positive credit may not be able to get approved for new credit. If this is the case, you may want to seek out secured credit cards. Secured credit cards are credit cards that the consumer backs themselves. These cards report to all three credit bureaus and will generate positive credit after a few months of use. Secured credit cards are a great tool to help build your credit.

If you already have trade lines of credit, it is critical to make sure they are paid on time. This includes: student loans, credit cards, car payments, and mortgages, among others. (We’ll get more into this further in the article)

2. Become an Authorized User

Everyone knows that one person who has immaculate credit. Maybe it’s a close family member or one of your best friends. They never miss a payment and are never denied. If it is alright with your friend or relative, it would be beneficial for you to become an authorized user on one of their accounts.

Becoming an authorized user will build your credit as it will show a positive trade line on your credit report. You can essentially “piggy back” your way to better credit with the help of a friend or relative’s account.

Becoming an authorized user on the account will not require you to get your own card or make any payments. Your name will just be attached to the account. Just make sure your have the OK from your friend/relative. However, if they miss a payment and the account becomes derogatory, it will negatively affect your credit as well.

3. Pay Down Accounts

Keeping your credit utilization down will allow your scores to go up. It is recommended to keep your credit utilization rates as low as possible (but not at zero). The closer you come to the high balance on your account, the more your scores will decline. If an individual with maxed out credit cards has no derogatory accounts, his score will negatively reflect that.

Build your credit utilization

A recent study shows the highest credit scores belong to individuals with 1-10% credit utilization. It is also worth noticing that consumers with 0% credit have an average score lower than consumers with 31-40%. The idea is to use your credit cards, but pay them off and use them minimally. Also take into consideration that the more debt on your account, the more interest you will wind up paying over time.

4. Avoid Derogatory Accounts

Derogatory accounts are negatively reporting items on your credit report. These accounts devastate your credit score. Most derogatory accounts will start off as just one late payment. If not handled correctly, late payments can change to charge offs or collections.

It is essential to your credit to always pay on time! Set reminders or use autopay features to ensure that you are always current. Just one derogatory account will drop your credit score dramatically, making it difficult to build your credit score.

5. Seek Credit Repair

If your credit report is flooded with derogatory accounts or incorrect information, you need to contact Better Qualified. Even if satisfied or current, derogatory accounts can remain on your credit report for 7 to 10 years. Better Qualified will attack derogatory accounts and correct false information. It’s what we do! Give us a call at (888) 533-8138, or fill out the form to the right for a free credit analysis. Even after our dispting process, Better Qualified will continue to advise you towards building your credit score.

 

Educate yourself a little more and read our credit blog. Be sure to check out the don’ts of credit with the 7 Mistakes That Will Destroy Your Credit

 

7 Mistakes That Will Destroy Your Credit

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Building your credit score takes time, patience, and loads of hard work. Wrecking it, on the other hand, is a cakewalk.

Cardkey

With just a couple errors you can see your credit score plummet into the danger zone, where it can remain for YEARS if not taken care of. Once your score drops, you can be stuck in credit score limbo. The sad thing is, most consumers aren’t even aware of the damaging effects their decisions can have on their score…. until now!

Here are 7 key mistakes to avoid when it comes to your credit score:

1. Making Late Payments

This one seems obvious. Just 1 or 2 late payments can be devastating to your credit score. According to a recent Credit Karma Analysis, consumers with excellent scores (750 or higher) pay 99.9% on time. Consumers with fair scores (640 to 699) still pay 99% on time. With that being said, about a third of Americans have a debt that is in a collection.

What can you do?

With today’s fast pace world, it’s easy for a bill to slip your mind here and there. Be sure to set reminders on your phone or sign up for an autopay feature to make sure you’re always current with your payments.

2. Applying for Tons of Credit/Constantly Pulling Scores

Just last month I was at the car dealership looking for a new vehicle. I had barely even looked at any cars and already the dealer was asking for my social security number to pull my credit score. He told me the banks would “fight over each other” to give me the best rate for my new ride. While this might sound intriguing to most people, to me it sounds like my credit score is going to be run 30 times. Needless to say, I didn’t let them run my credit and kept shopping until I found the car I desired.

Consumers don’t realize their scores will drop around 3-5 points every time a hard inquiry hits your credit report. This includes applying for loans, obtaining new lines of credit, and checking credit scores. Let’s take my trip to the Chevy dealer for example, and let’s say they had 5 banks run my credit. Boom! Each of my scores could have just dropped 25 points!(and that’s if I only went to one dealership).

When you have a bunch of hard inquiries on your credit, it will bring your scores down and appear you are desperate for credit. This is something lenders and creditors do not like to see. On top of that, any new credit lines will initially decrease your score. Only after several months of on time payments will it bounce back and start generating positive credit.

What can you do?

Limit your inquiries. Don’t create a hard pull for your credit when you don’t need it! Most places like car dealerships want to run your credit as soon as you walk through the door just to get you approved. Shop around first and make sure you know what you want at the price you desire(This goes for homes too). Once you find something that fits your needs, then pull your score. Make sure they only pull it a couple times. Remember they want your business. Most places will still work with you when you refuse to let them shogun your credit. Try to have only 1 to 2 hard inquiries a year.

3. Closing Old Credit Cards

When it comes to credit cards, the longer your history, the better. Some consumers tend to treat their old credit cards like old furniture. “We’ve had it for years, it’s brought us lots of good times, but it’s old. We want that shiny new account!” Closing old credit cards just because of their age will instantly decrease your score. In fact, 15% of your credit score is calculated based upon the length of your credit history. The more accounts that get closed, the more credit utilization is dependent on your open accounts.

What can you do?

Instead of closing old credit cards, leave them be until they become inactive. It’s best to cancel newer credit cards rather than old ones. As said above, older credit cards carry more weight when it comes to calculating your credit score.Fico Chart

4. Maxing Out Credit Cards

Your credit card activity is a big factor when it comes to being approved by lenders. Based upon activity on your report, lenders can tell how well a consumer uses credit. When your accounts are reporting as maxed out lenders tend to get a little weary.

The more money you charge on your card, the less likely it is you will be paying the debt. When a card becomes maxed out it can take an eternity to pay it off. You can find yourself be paying boatloads of dough just on interest. This is when most consumers find themselves missing payments. After a few missed payments and the account may get sold to a collection (which with be devastating to your credit).

What Can You Do?

Avoid maxing out your credit cards. Maxing out the card will have you swimming in debt and interest. Instead, try to keep the utilization rate between 1%-30% of the high credit limit on the card. If you pay on time and keep a balance in this zone, your credit scores will likely improve. This shows that you know how to correctly use a credit card and will reflect on your score. Always keep this in mind so you can avoid those impulse buys and save money. You can also pay more than once a month to show that you are determined to drop that balance. After you’ve had the account for some time (and with positive history), request a credit increase. This will make it easier for you to stay within that 1%-30% margin, and keep you away from that high credit limit.

5. Making Minimum Payments

Plain and simple, making minimum payments will show the credit bureaus you take too long to pay off debt. You’ll also be paying a mountain of interest. So although the payments are smaller, you’ll actually be spending more.

What Can You Do?

Simple, pay off more than minimum payments. Set monthly payments to double the minimum if you can afford it. When you find yourself with extra cash, throw it towards your payments. The sooner you pay the account off, the sooner you can cross off this expense and put more money into your wallet.

6. Charging Major Expenses on Cards for “Rewards”

We’ve all seen it. Almost every major credit card has “rewards”. Charge x amount to the card and get a bunch of airline miles or points towards redeeming a certain “prize.” It’s so easy to take their bait when they’re waving a “free” vacation in front of your face. The truth is, whatever “benefit” you get from these cards will be offset by the amount of interest you will be paying.

What Can You Do?

Don’t take the bait unless you already have the money to pay it off immediately. You’re better off saving up and paying for a vacation, and it’ll probably cost less in the process.

7. Not Monitoring Credit

The last and one of the most important factors. 1 in 4 consumers have errors on their credit reports!  With identity theft being the number one crime in America, it is insane to not sign up for a credit monitoring service. (if you haven’t read last weeks blog on data breaches, you can do so here)

What Can You Do?

Perform routine checkups on your credit. Get free credit reports online to make sure there is no fraudulent activity occurring on your account. www.AnnualCreditReport.com supplies you with one free FICO credit report per year. Check your credit from consumer sites like www.CreditKarma.com and www.CreditSesame.com.

cutting Card
Be sure to take the next step and enroll in a credit monitoring program. Fill out the form below and have Better Qualified go over a credit report with you. We’ll enroll you into our own credit monitoring program with BQ911.com. Plans start as low as $9 a month. Get protected and take control of your credit before it’s too late!

Fill Out The Form for a Free Credit Consultation



 

Data Breaches: Why You Should Worry

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It’s your day off, and you’re out picking up some groceries at WalMart. After the cashier is finished ringing you up,  you pull out your AMEX and swipe to pay without thinking twice.

 On the way home you stop by Target to pick up that rug that you’ve been eyeing up for the past few months. (You’ve been told it would really tie the room together.) This time you swipe your VISA bank card to pay.

 What you’re not thinking about is how WalMart and Target have your personal information tucked away in their databases, potentially putting your personal information at risk in the event of a data breach.

Internet Heists Are Real

 You’ve seen the movies where a group of gangsters team up to knock off a jewelry store, only to escape in their getaway car just seconds before police can apprehend them. Data breaches are not much different. The gangsters are hackers, the diamonds are your personal information, and the getaway car is the internet. In a technology driven world, it is becoming easier every day for hackers and Identity thieves to get their hands on your personal information.

Last December we received a rude awakening when it was made public that Target had a massive data breach, potentially compromising more than 40 million customer’s credit and debit accounts. Since then, there have been major data breaches almost every month. Those data breaches include: Michaels Stores, The Home Depot, Sally Beauty Supply, eBay, AOL, P.F. Chang’s, and most recently JP Morgan Chase. In 2013 alone,  there were more than 600 data breaches, costing the USA over $100 billion dollars.

Protect Yourself Against Data Breaches

By now you’re probably thinking “This seems hopeless, What can I do to protect myself?”. Nearly one fifth of Americans suffer from data breach attacks. All is not lost, there ARE ways to protect yourself!

  1. Check Your Accounts Often: The sooner you realize there’s a problem, the better. It is ideal to check all your credit and bank accounts daily. Make sure everything is in order and there’s no suspicious activity.
  2. Change pins/passwords: By constantly changing your pins and passwords, you are staying one step ahead of hackers. If a data breach occurs and they have your outdated password or pin, they will not be able to access your accounts.
  3. Use Gift Cards/Prepaid Cards: Another great way to stay ahead of the game is to use gift cards or prepaid credit cards. This way you can swipe away without having to worry about any personal information being compromised.
  4. Use Cash: Cash is king! We lost that long ago. Cash is untraceable and accepted almost everywhere.
  5. Call Better Qualified: We can help protect you against Identity Theft. Go to www.BQ911.com and sign up for our credit monitoring service, or call us at (888) 533-8138. We’ll go over your credit report with you and make sure you don’t have any fraudulent activity on it.

For more information on data breaches, watch me on CBS here:

Student Loans and your Credit Score

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With the exit of Labor Day, summer has officially come to a close. For hordes of young Americans, this means one thing: back to school. Back to late night cramming, ramen dinners, and hopelessly worrying about how student loan debt will annihilate your credit score come post-graduation. But before you start to panic, let’s take a look at some of the facts about student loans and your credit score.

Credit History 101

First, lets take a look at how FICO actually works. What exactly is your credit score? Where does it come from? Back in the 1950s Fair Issac and Company (FICO) introduced an algorithm to decide how risky it is to lend money to an individual. They based the algorithm on five categories: Payment History (35%), Amounts Owed (35%), Length of Credit History (15%), Types of Credit in Use (10%), and New Credit (10%).

The three major reporting credit bureaus (Equifax, Experian, and TransUnion), use FICO developed software along with you personal information to generate a credit score for you. The scores can range between 300 to 850, and are always changing based upon your credit history.

Student Loans DON’T Automatically Drop your Credit Score

A common misconception about student loans is that they will automatically destroy your credit score. This is not true. In fact, approximately 7% of consumers with at least $50,000 of student loan debt have FICO scores in the 800s. That’s correct, the 800s! Remember, 35% of your FICO score is based off of payment history accounts (See above). As long as you are making on time payments, student loans can actually help generate a good (if not great) credit score.

Managing Your Student Loans

For most people, it’s just a matter of “how to manage student loans correctly”. One would think paying them off ASAP would be best for your score (it’s not). Paying off student loans too quickly can actually have negative impact on your credit score. On the flip side, you don’t want to pay the minimum every month either, doing so will imply that you are taking too much time to pay off the debt. You want to find the sweet spot in between to make sure your debt will not hurt your credit.

It’s always good to minimize your student loans the best you can. You can do this by taking AP courses in high school to knock out the basic classes. Applying for scholarships, attending community college, and putting money away into a savings account can all help minimize your student loans before you apply.

Avoid Missing Payments

ALWAYS ALWAYS ALWAYS pay on time! Just a single late payment can linger on your credit report and haunt you for YEARS. In the cell phone age we live in today, it is ideal to set reminders on your phone’s calendar or email. Make sure you don’t default on your loans. Defaulting can lead to garnishments, which will obliterate your credit report. Times can be tough and if your payments are taking too big of a toll on you, try reaching out to the lender to negotiate.

Know What’s on Your Report

Finally, it’s always good to know what’s on your credit report before you apply for the loan and after you graduate. The bureaus make mistakes too and you need to make sure everything is reporting correctly. You can always obtain a free credit report online and ask the experts at Better Qualified to help give an overview of your credit report.

Student Loans

 

Target Breach: How to Lose Friends and Alienate Customers

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Target’s response to its recent breach is a good lesson in what not to do after a company experiences a security incident. Other corporations facing the growing risk of data breaches can learn from the many missteps, if not foolish errors, taken by one of the nation’s largest retailers.

The company’s first mistake was bad timing. Hackers stole confidential data of up to 110 million Target customers who shopped at stores from Nov. 27 to Dec. 15. But instead of proactively announcing the breach, Target got scooped by respected security blogger Brian Krebs.
Krebs broke the story on Dec. 18. On the same day, Target CEO Gregg Steinhafel issued the statement that “we are pleased with Target’s holiday performance.” The company confirmed the breach only after the U.S. Secret Service and American Express released their own investigations.

From there, Target made two more egregious errors that sent the wrong message to customers and may jeopardize its financial security.

The first was an email that notified customers of the breach and offered them one year of free credit monitoring through Experian. Here are the problems with that approach:

• The email included a suspicious sender with the address: TargetNews@target.bfi0.com instead of @target.com. Plus, it directed users to click on a link for additional details on the monitoring. The bizarre “bfi0” in the subdomain suggested nothing official to differentiate it from phishing and malware-laden emails sent by scammers following such corporate data breaches; scammers often make subtle tweaks.

• Target should have known that customers are conditioned to not click on links in email messages, especially after a headline-grabbing security breach and with a questionable sender address.

• Many people who received that email—myself included—didn’t actually shop at Target during the compromised dates, which made the email appear even more like a scam.

• Because the notice was delivered via email and probably due to the fact that it originated from a suspicious email address the original message ended up in junk mail boxes. I only looked at the Target email because I was looking for a good example of a phishing email following a data breach.

But the gravest error by Target was to offer free credit monitoring. It may seem counterintuitive, but it has become a routine mistake companies make in the aftermath of a security breach that involves payment cards rather than Social Security numbers (SSNs). Though offering credit monitoring is usually an attempt to reassure consumers, this may instead give them a false sense of security and lead to more consumer blowback. Here’s why:

• Credit monitoring won’t help people impacted by a payment card breach. Credit monitoring is a service that is limited to looking at changes to your credit file. It looks for new creditors, credit accounts and key account changes, such as an address change, that have been reported to Experian, Equifax, or TransUnion. What credit monitoring does not do is monitor your existing credit accounts. So, if a Target customer enrolls in the credit monitoring solution provided by Target, that customer would not be alerted if an existing account—in this case credit cards and payment cards—was used fraudulently. The only way for Target customers to find out if an existing credit or payment card is misused is by monitoring their payment card accounts for suspicous activity. All suspicious activity should immediately be reported to their payment card issuer. While banks and card companies are aware of this incident, some customers of smaller financial institutions may think they are safe when they enroll in the credit monitoring only to find that their card has been maxed out at the end of the month.

• Were SSNs stolen? By most accounts, including Target’s, no SSN’s were exposed in this breach. Based on the nature of the breach and the very limited cicumstances that Target would have needed to collect SSNs, it is unlikley that the exposure of SSNs was part of the fact pattern here. This is important because without the exposure of a SSN, the creation of new credit lines and accounts, which creditors report to the credit bureaus and which then show up on an individual’s credit file(s), is incredible unlikely. So again, it begs the question: Why was a tool that doesn’t monitor the actual risk here offered when no SSNs were exposed and it simply won’t help? (See point 1)

• Even if credit monitoring were effective or called for here, one year of free credit monitoring often isn’t long enough. Even if SSNs were exposed in this breach, which they weren’t, organized thefts of information by criminal rings, as is likely the case here, create exposures that surpass one year. Organized rings often will know that a breach of information was disclosed. They are aware that people may place 90-day fraud alerts or be enrolled in a year of monitoring as a result. So what do they do? Well, they simply hold on to the information for a year. Since there is no expiration date on an SSN (until you expire, that is) customers may initially breathe a bit easier with a year of credit monitoring. But they shouldn’t assume that stolen information can’t be abused afterward. Identity thieves can simply sit on collected data until 2015 or later.

• The sign-up process for the monitoring offered is not consumer friendly by nature. Some providers of credit monitoring have a one-step process: You simply enroll and once you have been authenticated and signed up, your monitoring is active and no further steps are required. But the Target/Experian process involves a two-step enrollment process. So once you have been authenticated and signed up, you are then sent a verification email to enroll. Enrollment is only completed and active when you click on a link in the verification email, which often either a) winds up in a Spam folder and/or b) is forgotten by the consumer. The e-mail is then never clicked for activation and the consumer is left thinking they are enrolled in monitoring when, in fact, they are not. Regulators do not like this two-step sign-on proces for the very reason that so many consumers do not, by no fault of their own, end up getting enrolled. In fact even the Consumer Financial Protection Bureau director Richard Cordray mentioned this in a recent appearance on The Daily Show with Jon Stewart. While he was referencing monitoring and other services paid for by the consumer, he said, “What they don’t tell you is maybe there’s an extra step or two to actually get the product. Months later when you go to seek the protection, they say, ‘Oh you didn’t have it.’ That’s wrong. That’s totally unfair.” And when it comes to consumer protection by the Federal Trade Commission, CFPB, or even state offices of the Attorney General, the last thing you want to hear is the word “unfair” in relation to treatment of a consumer.

The bottom line: Credit monitoring can be useful when it’s an ongoing service and not presented as an easy fix to a problem it will not solve, which is the case with the Target breach. It shouldn’t be used as a replacement for careful consumer vigilance. This means regularly looking over your existing accounts and cards for suspicious activity and charges in addition to monitoring your actual credit files.

While Target management was likely following the advice of its counsel, business units, compliance folks and potentially even regulators, this breach is a good opportunity for companies large and small to rethink their ‘boilerplate’ approach to breach remediation in exchange for solutions and advice to consumers that fit the actual risks. It is also a good lesson in how communicate with the public and impacted consumers, or in the least, a lesson in how not to communicate and respond to a breach.

Eduard Goodman is chief privacy officer at IDentity Theft 911.
– See more at: http://www.idt911blog.com/2014/02/target-breach-how-to-lose-friends-and-alienate-customers/#sthash.kWn4cMFp.dpuf

ObamaCare Website Creating Credit Concerns

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While a battle rages over technical issues on the ObamaCare online marketplace, questions are emerging about the safety of data on the website.

Better Qualified CEO Paul Oster said the website is rife with security problems that can lead to identity theft and potentially wreck one’s credit if exploited.

“We have been flooded with calls by people that are concerned about the threat because what’s going to happen is it could take years before someone realizes that they became a victim of identity theft – and then they have to figure out was it in fact because of the information they provided through healthcare.gov?”

Oster added that most websites have the ability to “flash” users if they left the website they intended to be on and are now entering another domain, especially when clicking different icons on the page. But as of now, healthcare.gov lacks that function.

“It’s called ‘pharming’ and what happens is these hackers are able to redirect people when they’re clicking from one part of the site to the next and the person doesn’t realize that they left healthcare.gov. There are no triggers and alerts.”

But Bill Curtis, SVP & Chief Scientist at CAST, said this is not uncommon and other hacks have been reported that are much larger than the exposure on healthcare.gov, including the one revealed in July where five Eastern European men stole 160 million credit cards over the course of seven years.

There was also the TJX incident earlier this year, when the parent company of T.J. Maxx and Marshalls had 40 million credit card numbers stolen in what’s believed to be one of the biggest such incidents in history.

“The TJX heist would be roughly the same size of the exposure if every uninsured American went to healthcare.gov and exposed their personal and credit card information.  So these types of security issues have already occurred at the same or even larger scale in industry.”

Don’t co-sign on a student loan until you understand the full repercussions

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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.

grads

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

The Money Pros are standing by to take your questions

Q. My child is going off to college this fall and she will be taking out a student loan. Should I co-sign on the loan?

A. Yes, you should co-sign, but only after you understand the full repercussions.

With the cost of tuition going up every year, the use of student loans has also gone up. Student loan delinquency just surpassed credit card delinquency for the first time ever.

That makes co-signing a student loan a very difficult decision. Parents need to understand that by co-signing, they are ultimately responsible to pay back the entire debt.

Often parents don’t realize that a student loan is a very real debt. The name “student loan” makes it sound like it is a friendly loan. It is not a friendly loan at all.

Parents should know that a student loan is not dischargeable under bankruptcy law. You can have your mortgage, car loan, and credit cards all forgiven if you filed bankruptcy, but you would still be responsible to pay back your student loans.

You should assume that if you co-sign, you will be paying the entire monthly payment. Here are some of my recommendations:

*Don’t borrow more than you need.

*Have an emergency fund to cover six months’ worth of payments.

*If your child earns income as a student, make sure a small portion of that pay goes into that emergency fund.

Perhaps the most important tip I would give parents relates to who should be making the payments. While your child is the official borrower, I would encourage you to be the one sending checks to the lender. In turn, your child should be paying you.

Why? Parents need to monitor and control loan payments to protect their own credit profile.

Unfortunately, we have seen the devastating effects that missed student loan payments can have on parents’ credit scores. Most of the time parents are not even aware that there has been a missed payment until they apply for a loan themselves.

At that point, it’s far too late and the damage to the credit score has been done. A one-time, 30-day delinquency can drop credit scores by as much as 100 points.

Student loans have become a necessary evil in today’s world. A student loan can have a dramatic effect on the credit and monthly budget of parents and their children.

Often it is a young person’s first encounter with a credit obligation. It needs to be carefully considered.

Paul Oster is a credit expert and owner of Better Qualified in Eatontown, NJ.

Equifax must pay $18.6 million after failing to fix Oregon woman’s credit report

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By Laura Gunderson, The Oregonian

A jury Friday awarded an Oregon woman $18.6 million after she spent two years unsuccessfully trying to get Equifax Information Services to fix major mistakes on her credit report.

The judgement, likely to be appealed, appears to be one of the largest awarded to a consumer in a case against one of the nation’s major credit bureaus.

Julie Miller of Marion County, who was awarded $18.4 million in punitive and $180,000 in compensatory damages, contacted Equifax eight times between 2009 and 2011 in an effort to correct inaccuracies, including erroneous accounts and collection attempts, as well as a wrong Social Security number and birthday. Yet over and over, the lawsuit alleged, the Atlanta-based company failed to correct its mistakes.

“There was damage to her reputation, a breach of her privacy and the lost opportunity to seek credit,” said Justin Baxter, the Portland attorney who teamed on the case with his father and law partner, Michael Baxter. “She has a brother who is disabled and who can’t get credit on his own and she wasn’t able to help him.”

Tim Klein, an Equifax spokesman, said Friday that he didn’t have any details about the decision from the Oregon Federal District Court. He declined to comment about the specifics of the case.

A Federal Trade Commission study earlier this year of 1,001 consumers who reviewed 2,968 of their credit reports found 21 percent contained errors. The survey, which is required as part of a 2003 law, found that 5 percent of the errors represented issues that would lead consumers to be denied credit.

A 2012 investigation by the Columbus (Ohio) Dispatch newspaper reviewed nearly 30, 000 consumer complaints filed with the Federal Trade Commission and attorneys general in 24 states about unresolved errors made by the largest consumer credit agencies — Equifax, Experian and TransUnion. The newspaper found that with complaints about errors, consumers reported it had taken many months to fix even the most basic mistakes.

Miller first discovered a problem when she was denied credit by a bank in early December 2009. She alerted Equifax and filled out multiple forms faxed by the credit agency seeking updated information.

In addition to requesting the changes, Miller had asked several times for copies of her credit report, the lawsuit alleged. Credit bureaus are required by law to provide reports to consumers for free annually and after that, for a small fee. On numerous occasions, Equifax failed to respond to Miller’s requests.

Miller had found similar problems in her reports with other credit bureaus. However, Baxter said, those companies had corrected their mistakes.

The issue wasn’t a result of identify theft, Baxter said. Instead, the information from another “Julie Miller” had simply been placed in the plaintiff’s record by mistake. In at least one case, the lawsuit alleged, the plaintiff’s private financial information was sent to companies inquiring about the other Julie Miller.

Since 2008, Oregon consumers have filed hundreds of complaints about credit bureaus with the state’s Attorney General. Those complaints include 108 against Equifax, 113 against Experian and 70 against TransUnion.

Please follow Laura Gunderson; twitter.com/lgunderson

How to Repair and Maintain Your Credit

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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.

Applying for a Mortgage? Better Check Your Credit Report for Errors!

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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.

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