Credit Bureaus Now Accepting Proof To Dispute Credit Errors

In news that will be sure to change the game, the credit bureaus have agreed to some of the following overhauls,

The credit-reporting firms will be required to use trained employees to review the documentation consumers submit when they believe there is an error in their files. If a creditor says its information is correct, an employee at the credit-reporting firm must still look into it and resolve the dispute. Source

Previously, credit bureaus would just enter a three digit code and contact the creditor. They wouldn't look at any documentation sent, even if it was the creditor that said it was an error (60 Minutes Story on this very scenario).  This new agreement changes that.

Another change will be coming to unpaid medical bills which is undoubtedly a good thing for consumers.

Unpaid medical bills—an increasingly common type of debt—will also be treated differently on credit reports. Some 43 million Americans have past-due medical debt on their credit reports, according to the CFPB. About 52% of all debt on credit reports is from medical expenses. Collection agencies typically report medical debt to the credit-reporting firms after they receive unpaid bills from hospitals, doctors and other medical professionals. While unpaid bills result from consumers not paying, they can often result when insurance companies delay payments.

Under the new agreement, the credit-reporting firms will have to wait 180 days before adding any medical-debt information to consumers’ credit reports. During that grace period, consumers will also have time to clear up discrepancies and catch up with other unpaid bills. When medical debts are paid by an insurance company, regardless of the time frame, they will have to be removed from the credit report soon after. Source

This no doubt will be a big change in helping consumers across this country. Now it is important that we keep vigilance of the credit bureaus and that they follow these changes.

10 Things Credit Repair Companies Don't Want You To Know Or Understand

At some point you may want to use a credit repair company to remove negative listings from your credit report. Before you do, here are 10 things you should know regarding that company and how they usually work.

(Full disclosure: I worked for a credit repair company that was attached to a law firm for 3 years. I was on the sales and even fulfillment side. If you are wondering whether credit repair companies really work, the short answer is yes they do. I saw plenty of negative listings removed off reports. I even had a couple removed for myself when with the company.) 

1. You can dispute that negative listing yourself: Yep it's true, everything they do can be done by yourself. It just will take time and resources. Credit repair companies have no secret tricks to getting those items removed, they typically do what a consumer themselves would usually do. Credit repair companies have to let you know this by law and they usually tell you in the agreement. Of course if you agree online you might not read it, and they quickly read over it when agreeing by phone.
2. Not all negative listings are equal/can be removed: Some of the negative listings on your credit report are just duplicates of an account. Those along with older listings are usually easier to remove off the report. The more recent a negative account on your report is, the harder it is to remove. That means you will stay longer with them, paying more money.
3. Even though we didn't send any disputes, that isn't a guarantee you get a refund: Most credit repair companies have a refund clause in their contract. It states that if there is no work done on your behalf, then you are entitled to a refund. Their definition of work may be different than what yours is. Have they been emailing you, letting you know the updates of your file? To them that is work on your behalf, because they have been in contact letting you know what is going on.
4. That average 10 items removed in three months may not apply to you: The use of any average is salesman talk to get you to sign up. That average is really of all customers and their items deleted. I once saw a report that had 400 duplicates removed in the first three months. That really boosts the average for the company right?
5. Our letters to the credit bureaus are full of misspellings and sound uneducated: These credit repair companies write letters that try to sound like the average costumer. That means the letters sent will have misspelled words and some of the most uneducated wording you will see. It may talk about how dare the credit bureaus sit on a throne of lies about your credit score. I am not making this up.......
6. We will sign those letters in your name: When you agree to the terms of the service you also agree to the "power of attorney to sign in your name." This means that the repair companies will have one of their employees sign your name to the previously mentioned misspelled letter. Oh and did I mention...
7. We mail the letter with your home return address: That's right, and sometimes the wrong mailing address is on the credit report. That means those letters we send on your behalf may be sent back to you. Enjoy......
8. Removing an item from your report might drop your score: You see that a negative listing was removed and you go to check your credit score. Instead of your score going up, your score has dropped. Why you might ask? That might have been the only credit you had in your name. When you have no credit your score is worse than if you had a negative listing. I know it doesn't make any sense but that is the case when dealing with credit scores.
9. If we are a law firm our paralegals really didn't go to school for that: When I worked for the credit repair company we were a law firm. Because of state law we could officially call ourselves paralegals. Only problem is that none of us had really gone to school to be one. In fact half our staff was either in school or hadn't even gone to college. In fact I bet over half of the people I worked with wouldn't be able to even read a credit report. Most didn't care to study what we were selling, they were there to get you to sign up. They would say whatever was needed to get the sell. Boy really makes you feel safe about who is looking at your report right?
10. Our executives, whether they be lawyers or credit repair experts never actually look at your report nor send out the letters: You go to the credit repair company website and they have pictures of their attorneys or credit repair experts. Honestly, those are just used to draw you in and get you signed up. They aren't made up people, they are just figure heads who have probably attached their name to get a nice paycheck from helping get you to sign up. Sorry to break that to you, but you don't have an attorney who is working for you to sue those credit bureaus or lenders when the time  comes.

So there you go, the top ten things that a credit repair company won't tell you when it comes to their services. What do you think of the list?

Voluntary Repossessions Hurt Your Credit Score

This will be a short post, but if you're wondering whether returning your car to the dealer will result in a repossession listing on your credit report, the unequivocal answer is YES!!! In the eyes of the credit bureau's there is no difference between you voluntarily returning the vehicle and having a company come and get it. The wording will be different, saying voluntary surrender instead of repossession but they both will hurt your score. 

This is important when purchasing a vehicle to make sure you can afford the vehicle should something happen to your income. Plan appropriately and you won't have to deal with that hassle. If any car salesman tries to suggest returning the vehicle should you not be able to make the payments, just remember you don't need this negative listing hurting your credit score for seven years.

P.S. here is a link from Experian saying exactly what is in this post.

Experian's Newest Ad Minimizes The Difficulty Fighting Identity Theft

By now I am sure most of you have probably seen this newest ad from Experian on TV.



It states that the character isn't worried about the identity theft which occurs on her vacation because she monitors her credit report. While there is actually good advice to monitor your credit report, saying she isn't worried is a simplistic statement.  You as a consumer should be worried about identity theft because you would have to do some or all of the following:

• File a police report on your stolen identity
• I recommend this as mandatory. It helps to have for any future problems with some creditors.
• Place a fraud alert or freeze to avoid any future fraud on your credit report
• Here is the link from Experian about fraud alerts and credit freezes.
• Dispute the listed accounts not just on your Experian but also Equifax and TransUnion reports.
• Disputes aren't quick fixes and can take time.
• Disputing an item once might not be enough and will have to dispute the same listing multiple times to get it removed. Providing proof like a police report might not even get it removed.

Doing all that takes time. In fact it can take years dealing with all the issues from identity theft. Not to mention the time it will take in proving your identity while applying for credit because of the fraud alerts or freezes.  

I understand Experian wanting to make more money off of you and I than they already do.  I just don't think they should use the words not worried when it comes to identity theft.

Seven Ways You Can Hurt Your Credit Score

Here is an article from MSN that covers seven ways people will usually hurt their credit score.  Here is an excerpt from the article to give you an idea of what people typically do.

Opening too many accounts at once

Credit card new-account bonuses are certainly enticing, but you shouldn't be signing up for every card that's offering some cash back. Every application and subsequent credit review will generate a hard inquiry that will appear on your credit report. (Credit reviews that aren't used to decide whether you are actually getting a loan -- for instance, one conducted by a prospective landlord or by a bank when you are looking to get a checking account -- are considered soft inquiries and will have no impact on your score.)

Each hard inquiry will ding your score from three and five points and stay on your report for two years, although it will negatively impact your score only for about half the time it appears.

There is something in this article that isn't further expounded which is important for you to know regarding hard inquiries.  Hard inquiries that occur within two weeks while you are looking for a car or home as one hard inquiry instead of multiple ones.  This is called rate shopping and is something you should do.  Here are a few more answers from MyFico.

Crazy 88 Auto Loans And Guaranteed Approval Credit Not That Great

I had previously written about Crazy 88 Auto Loans back in 2009 before the first Basic Credit Info website had gone down, and I see that it is still going on strong. I don't want to have to repeat all that I said so here is a link to the original article that had been posted on another site I was using.

(Writers update: the following appears to be older information as the company has updated their site.)

One of the most important parts of looking at this company is the disclaimer which states the following:

Disclaimer

See dealer for complete details on all programs. Not responsible for typographical errors. See dealer for details. Bank approval required on all credit applications. Subject to finance approval to qualified buyers. Certain restrictions apply based on lender approval. $88 a month for up to 3 months at dealer discretion. Offer may be withdrawn at any time and is not to be used in conjunction with any advertised offer. Amount of down payment and monthly payment may vary based on consumer's credit history.

For full NADA book value: negative balance applied to new loan balance. Financing on approved credit through dealer designated lender. All vehicles plus tax tags and freight. Guaranteed trade for purchase of used vehicles only. Offer may be withdrawn at any time and is not to be used in conjunction with and advertised offer CRAZY 88 is a registered marketing agent and not an automotive finance company or lender. Negative balance applied to new loan balance. Financing on approved credit through dealer designated lender.

So as you can see this isn't that great a deal.  Especially since the deal can only last for up to three months. This is very similar to those instant auto approval deals you see on TV. Many times they tell you that you can get approved regardless of your credit history. Why wouldn't someone who keeps getting denied credit not want to take this deal?

The above disclaimer shows that while it may be great short term in the long run you will be hurt worse. What happens if you get a car and your payments go up to four or five hundred per month? Will that help your credit if you can't pay for your new car? Always check out disclaimers on these companies before doing business.

This is the new updated disclaimer showing on the Crazy 88 website.

Disclaimer

The terms for which you qualify will depend on your credit history and other factors. An $88 monthly payment is based on a loan amount of $5082 at an APR of 4.9% over a term of 66 months and an $88 down payment. Down Payment amount does not include government fees that includes tax, title, and other related fees. These are not actual consumers but demonstrate potential results. Crazy 88 is an auto dealer referral service. A local dealer in your area will provide the car and arrange for your loan

I'd like to think that this site and others led to this change due to pointing out that previously you could only get the $88 dollar deal for up to three months. Even then as you can see, the deal only applies to a certain amount, APR, and terms of loan length to get what they promise on the site. Even then to get this deal it is all dependent on your credit history and factors!!! Wasn't the point of this promotion to get the $88 dollar deal no matter your past credit history? It's right there on their front page:

During this event, you can purchase a car, truck, van or SUV is available to you for only 88 dollars down and 88 dollars a month, regardless of your past credit history. Get the car you want today!

Looks like their own disclaimer contradicts their website. Don't be fooled, this whole promotion still stinks and I would avoid it if you are looking for a new car.

Basic Credit Info Is Back!!!

So after being offline for the last year or so, Basic Credit Info is back online.  I apologize for going offline but rest assured that I will continue to provide you the best information I can to help you learn about credit and how to build your credit score.

I will continue to post stories that relate to the consumer so that you can learn and avoid having too many issues.  If you have any questions don't hesitate to contact me.  I look forward to working with you and have a great day.