Do you know about credit cards and their dirty little secrets? I make my living knowing about them and I was unable to answer all the questions at a great quiz from the PBS Frontline program Secret History of The Credit Card at Credit Card Quiz. Take the quiz and see how much you do or don't know about universal default, and other credit card issues. Then read this article for more dirty little secrets this great PBS special offered. Here are a few appetizers:
UNIVERSAL DEFAULT - did you know the credit card company can raise your interest rate if you are late on ANY payment? I don't mean late just to the credit card but to ANYBODY! Be late on your phone bill, car, house... ANYTHING. Or if in the eyes of a creditor you simply have to much outstanding credit, all bets are off regardless of whatever interest rate you signed up for.
The logic is simple. The industry believes it is within its rights to protect its interest in a more risky unsecured loan venture. Therefore, it is not unreasonable to raise rates if it has reason to think risk of being repaid has changed. And as a lender, the creditor has every right to view your credit file any time it wants... all of your file and not just its own payment history.
MINIMUM NOTICE CHANGES - If the above is not bad enough, consider the consumer with on time payments every month on everything. No problem, right? WRONG! Buried within the contract (that contract law attorneys admit they have great difficulty interpreting), is a clause that allows the company to change your interest rate "at any time, for any reason, as long as the holder is given 15 days' notice." That's right. They can change their mind AFTER you make a purchase at 6.5% (for example) and any former agreements are null and void. How can a purchase price be changed after the sale? No other industry can do this but the credit card company.
USURY OR NOT - According to Frontline, "There is no federal limit on the interest rate a credit card company can charge." In fact an interest rate of 35% is not unheard of. This is because in the 1980s South Dakota and Delaware eliminated the cap on usury laws which is what constitutes the maximum allowable interest to be charged. Have you ever noticed the return address on your credit card statement? Chances are it is Delaware or South Dakota. Gee, I wonder why.
DEADBEATS and REVOLVERS - Deadbeat use to mean someone not taking responsible action. This is not true in the upside down credit industry. In credit card bill jargon, "Deadbeats" pay their balances off in full every month. They are deadbeats because the industry receives very little profit off of these responsible consumers. On the other hand, "Revolvers" roll credit card balances over month to month and never pay in full. This is the ideal customer because of the profit generated. Then there are "Rate Surfers" or "Gamers" who shift usage between credit cards based upon interest rates.
FEES - Again quoting Frontline, "In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted the existing restrictions on late penalty fees. This means simply, there is no limit on the amount a credit card company can charge a cardholder for being even an hour late with a payment." But this has opened a Pandora's box for not only late fees, but over the limit fees and bad check fees as well. A lawyer who worked on the Smiley case says he believes penalty fees which use to be $5 or $10 could rise to $50 in another year. Now the consumer not only must contend with a higher rate, but late fees as well. Additionally what if these fees put them over the limit creating still another fee. It is a never ending spiral towards bankruptcy.
MINIMUM PAYMENT - Consumers use to be required to pay 5% of the outstanding balance. But slick credit card marketers suggested implementing a 2% required minimum payment. This was advertised as consumer friendly with "easy low payments." The truth is, the tactic allowed consumers to increase their debt because of the lower payment which in turn created more profit through higher debt over a longer time period.
Looking for some credit repair ebooks to help with your credit repair decisions? Both of these are excellent choices: Debt Credit Repair 750 and also Totally Debt Free Lifestyle: Your Transition to a Better Financial Situation is also a good choice.
To find out what your credit score is this place can help True Credit
Showing posts with label personal finance. Show all posts
Showing posts with label personal finance. Show all posts
Monday, December 31, 2007
Monday, December 10, 2007
Credit Repair: How to Stop a Collector by Jim Kemish
Your Thirty-Day Window
Have you received a collection notice? Don’t ignore it! The first receipt of a collection notice contains an opportunity that you should not miss. If you dispute the debt in the thirty days after receiving notice the collector must stop all collection activities while investigating your dispute, and may not make any attempt to collect until he has provided you with verification of the debt. In addition, the debt may not be reported on your credit report during this period of time. If you do not respond within thirty days you have effectively waived your right to demand investigation under the Fair Debt Collection Practices Act (FDCPA). This is an important right and may serve you well if you have any question about the accuracy of the debt. Are you in a credit repair program? The more comprehensive credit repair programs provide debt validation as part of their service at no extra charge. Simply forward the collection notice to your credit repair company immediately so that they can respond within the time allowed.
FDCPA § 809. Validation of debts [15 USC 1692g (b) “If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.”
The Cease Communication Letter
In some cases collectors can be abusive and cause significant stress. Consumers often give in to the pressure for partial payment at the expense of their food and housing budget causing needless hardship for themselves and their family. If you are faced with a high-pressure collector it may be best to put an end to their communication. The FDCPA requires collectors to stop collection efforts upon receiving a written request to stop. If you are in a credit repair program they should be happy to prepare the cease communication letter on your behalf as well as providing competent counsel.
FDCPA § 805. Communication in connection with debt collection [15 USC 1692c] (c) “Ceasing Communication. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except -- (1) to advise the consumer that the debt collector's further efforts are being terminated; (2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.”
In some cases, if the dollar amount is enough, and the collector believes that you have the ability to pay they may serve you with court papers. This may or may not happen. The process of filing suit is expensive and may not justify the results. Whatever a collector sounds like on the phone you can bet that the decision to pursue or not pursue your case will be rational. If you cannot afford to pay you may decide to let it take its course. As always, it is best to contact a competent credit repair professional to discuss the potential benefits and risks of any action.
Get an Attorney
The FDCPA requires collectors to stop collection efforts upon receiving notice that an attorney is representing you. Once a collector receives this notice they must direct all further communications to the attorney. This approach has several benefits. The right attorney may be able to raise useful defenses. In the credit repair business we often suggest this course of action where the dollar amount of the collection is significant or where the collector is especially aggressive.
FDCPA § 805. Communication in connection with debt collection [15 USC 1692c] (a) “Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt -- (2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer…”
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish, a nationally recognized credit repair and restoration expert, is the president and founder of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida.
Article Source: http://www.articlerich.com
Have you received a collection notice? Don’t ignore it! The first receipt of a collection notice contains an opportunity that you should not miss. If you dispute the debt in the thirty days after receiving notice the collector must stop all collection activities while investigating your dispute, and may not make any attempt to collect until he has provided you with verification of the debt. In addition, the debt may not be reported on your credit report during this period of time. If you do not respond within thirty days you have effectively waived your right to demand investigation under the Fair Debt Collection Practices Act (FDCPA). This is an important right and may serve you well if you have any question about the accuracy of the debt. Are you in a credit repair program? The more comprehensive credit repair programs provide debt validation as part of their service at no extra charge. Simply forward the collection notice to your credit repair company immediately so that they can respond within the time allowed.
FDCPA § 809. Validation of debts [15 USC 1692g (b) “If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.”
The Cease Communication Letter
In some cases collectors can be abusive and cause significant stress. Consumers often give in to the pressure for partial payment at the expense of their food and housing budget causing needless hardship for themselves and their family. If you are faced with a high-pressure collector it may be best to put an end to their communication. The FDCPA requires collectors to stop collection efforts upon receiving a written request to stop. If you are in a credit repair program they should be happy to prepare the cease communication letter on your behalf as well as providing competent counsel.
FDCPA § 805. Communication in connection with debt collection [15 USC 1692c] (c) “Ceasing Communication. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except -- (1) to advise the consumer that the debt collector's further efforts are being terminated; (2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.”
In some cases, if the dollar amount is enough, and the collector believes that you have the ability to pay they may serve you with court papers. This may or may not happen. The process of filing suit is expensive and may not justify the results. Whatever a collector sounds like on the phone you can bet that the decision to pursue or not pursue your case will be rational. If you cannot afford to pay you may decide to let it take its course. As always, it is best to contact a competent credit repair professional to discuss the potential benefits and risks of any action.
Get an Attorney
The FDCPA requires collectors to stop collection efforts upon receiving notice that an attorney is representing you. Once a collector receives this notice they must direct all further communications to the attorney. This approach has several benefits. The right attorney may be able to raise useful defenses. In the credit repair business we often suggest this course of action where the dollar amount of the collection is significant or where the collector is especially aggressive.
FDCPA § 805. Communication in connection with debt collection [15 USC 1692c] (a) “Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt -- (2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer…”
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish, a nationally recognized credit repair and restoration expert, is the president and founder of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida.
Article Source: http://www.articlerich.com
Sunday, December 9, 2007
Credit Repair Common Sense by Jim Kemish
High Stakes in the Credit Repair Game
Your financial life depends on the content of your credit. Every time you apply for credit a lender will check your report with at least one of the three bureaus. The content of your report will determine your eligibility for a loan as well as the interest rate you will pay. The interest rate in turn will determine your monthly payment. Higher rates mean higher payments, and higher payments erode your ability to save and enjoy the security that comes from building wealth. The goal of any legitimate credit repair company should be to re-shape your credit to meet the highest lender standard and improve the quality of your financial life.
Some Amazing Numbers
Did you know that each of the three bureaus maintain credit files on over 200 million Americans? Each individual credit file contains the history and current status of credit cards, auto loans, mortgages, collections, public records, and more. Current accounts must be updated monthly and are dependant on the accurate participation of millions of creditors and other data furnishers. The shear amount of data is mind-boggling.
The Cost of Errors
Given the amount of data being managed by the credit bureaus it is not a surprise that there are errors. But what does it mean to you? According to the National Association of State PIRGs (a nonprofit, public interest advocacy organization) 79% of all credit reports contain mistakes, 54% of all credit reports contain personal information that is long outdated, belongs to a stranger, or is otherwise incorrect, 30% of all credit reports contain accounts that are closed by the consumer but continue to be reported as open, and 25% of all credit reports contain errors serious enough to result in the outright denial of credit. As a credit repair professional dealing with credit reports on a daily basis, I can attest to this widespread occurrence of errors. Is everything correct on your on your report? The odds are not in your favor.
Russian Roulette
Somewhere between the 79% of consumers with errors on their reports, and the 25% who will be denied credit due to those errors, exists a vast number who will be bumped into a lower credit class and pay a higher interest rate than they should. Many of these consumers will never be aware of the fact that lenders are quietly charging them one or two percent more on their loans. Let’s translate the statistics. 79% represents 158 million Americans with errors on their credit reports. 25% represents 50 million Americans that will be denied credit due to errors. The vast middle ground contains 108 million Americans who may be paying hundreds of extra dollars each month as a result of errors in the credit reporting system. What about you? If you are not paying attention to the content of your credit report you are playing financial Russian roulette. If you are in the majority, an intelligent credit repair effort can pay for itself a hundred times over.
A Case of Skewed Statistics
I have been in the credit repair business since 1989 and have come to the unfortunate conclusion that people with real credit issues, those whom have missed payments, fallen behind, or defaulted on a debt, are more than twice as likely to have serious errors on their reports than the statistical norm. In other words, the potential for errors becomes considerably worse for those that can afford it the least. Why does this happen? When an account slips into a derogatory status it is no longer in the mainstream; the creditor often moves the account to a different department; the creditor name may be reported slightly differently and account numbers may be modified. If the account is charged off and sent to a collector it is almost inevitable that it will eventually appear in duplicate or triplicate on your report. And over time collection accounts change hands, often shedding their statute of limitation start date and continue to report well beyond their proper expiration, sometimes appearing as if brand new.
The Credit Repair Road to Recovery
Have you had legitimate credit issues? Are you working on recovering from those issues? The good news is that a competent credit repair effort can effectively remove the errors from your report and give you the fair chance that you deserve. Do you know that you can get your three credit reports for free one time per year? Go to AnnualCreditReport.com, the only site where you can get your reports for free with no strings attached. Review your reports. Call a credit repair expert for a consultation. Take charge today. It’s your right, and there is nothing that can have more of an impact on your financial life.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish, a nationally recognized credit repair and restoration expert, is the president and founder of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida.
Article Source: http://www.articlerich.com
Your financial life depends on the content of your credit. Every time you apply for credit a lender will check your report with at least one of the three bureaus. The content of your report will determine your eligibility for a loan as well as the interest rate you will pay. The interest rate in turn will determine your monthly payment. Higher rates mean higher payments, and higher payments erode your ability to save and enjoy the security that comes from building wealth. The goal of any legitimate credit repair company should be to re-shape your credit to meet the highest lender standard and improve the quality of your financial life.
Some Amazing Numbers
Did you know that each of the three bureaus maintain credit files on over 200 million Americans? Each individual credit file contains the history and current status of credit cards, auto loans, mortgages, collections, public records, and more. Current accounts must be updated monthly and are dependant on the accurate participation of millions of creditors and other data furnishers. The shear amount of data is mind-boggling.
The Cost of Errors
Given the amount of data being managed by the credit bureaus it is not a surprise that there are errors. But what does it mean to you? According to the National Association of State PIRGs (a nonprofit, public interest advocacy organization) 79% of all credit reports contain mistakes, 54% of all credit reports contain personal information that is long outdated, belongs to a stranger, or is otherwise incorrect, 30% of all credit reports contain accounts that are closed by the consumer but continue to be reported as open, and 25% of all credit reports contain errors serious enough to result in the outright denial of credit. As a credit repair professional dealing with credit reports on a daily basis, I can attest to this widespread occurrence of errors. Is everything correct on your on your report? The odds are not in your favor.
Russian Roulette
Somewhere between the 79% of consumers with errors on their reports, and the 25% who will be denied credit due to those errors, exists a vast number who will be bumped into a lower credit class and pay a higher interest rate than they should. Many of these consumers will never be aware of the fact that lenders are quietly charging them one or two percent more on their loans. Let’s translate the statistics. 79% represents 158 million Americans with errors on their credit reports. 25% represents 50 million Americans that will be denied credit due to errors. The vast middle ground contains 108 million Americans who may be paying hundreds of extra dollars each month as a result of errors in the credit reporting system. What about you? If you are not paying attention to the content of your credit report you are playing financial Russian roulette. If you are in the majority, an intelligent credit repair effort can pay for itself a hundred times over.
A Case of Skewed Statistics
I have been in the credit repair business since 1989 and have come to the unfortunate conclusion that people with real credit issues, those whom have missed payments, fallen behind, or defaulted on a debt, are more than twice as likely to have serious errors on their reports than the statistical norm. In other words, the potential for errors becomes considerably worse for those that can afford it the least. Why does this happen? When an account slips into a derogatory status it is no longer in the mainstream; the creditor often moves the account to a different department; the creditor name may be reported slightly differently and account numbers may be modified. If the account is charged off and sent to a collector it is almost inevitable that it will eventually appear in duplicate or triplicate on your report. And over time collection accounts change hands, often shedding their statute of limitation start date and continue to report well beyond their proper expiration, sometimes appearing as if brand new.
The Credit Repair Road to Recovery
Have you had legitimate credit issues? Are you working on recovering from those issues? The good news is that a competent credit repair effort can effectively remove the errors from your report and give you the fair chance that you deserve. Do you know that you can get your three credit reports for free one time per year? Go to AnnualCreditReport.com, the only site where you can get your reports for free with no strings attached. Review your reports. Call a credit repair expert for a consultation. Take charge today. It’s your right, and there is nothing that can have more of an impact on your financial life.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish, a nationally recognized credit repair and restoration expert, is the president and founder of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida.
Article Source: http://www.articlerich.com
Subscribe to:
Posts (Atom)
Add to Onlywire
