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How Credit Affects Your Life▼
Credit Reporting & Scoring▼
Improving Your Credit Score▼
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How Credit Affects Your Life
Credit Tightening Hits Auto Loans
The national credit crunch isn't just squeezing the housing market, it's also making auto loans more difficult. Lenders are tightening their standards for car loans and that means bigger down payments and monthly installments. CitiGroup, one of the nation's biggest financial firms, has cut about 800 jobs in its auto lending business and says it plans to scale back the number of loans it offers. Read more...
Cost of Bad Credit
What is the price you are paying for bad credit? A quick glance at the figures below will show you that a good credit rating can save you thousands in interest charges. Read more..
No More Extra Credit For College Loans
Cash for college is another casualty of the credit crunch, as loan sources dry up, and other financing options fall to the housing bust. Tightening credit and higher costs have driven more than 40 companies from the student loan business in recent months. Financial aid experts predict more up-front costs for student borrowers and expect that thousands of students will have to shop around this spring and summer for a new loan provider. Read more..
Should I Split Up My Credit Card Balance?
Q: I know that my FICO credit score depends in part on the total amount of my credit-card debt vis-á-vis the credit limits on my cards. I have five accounts, each with a $10,000 limit, and I owe a total of $20,000. Does it matter if the debt is concentrated on one or two cards, or spread across all five? That is, am I better off carrying a balance of $4,000 on each card or dividing the debt between two cards ($10,000 on each) with zero balances on the other three? Read more..
To Co-Sign or Not to Co-Sign
My 40-year-old daughter wants to buy a house, but her credit is lousy. Fortunately, she has a decent job. She's asked me to co-sign a loan with her. I've read the experts' advice not to co-sign on a loan, but this looks like it's the only way my daughter can get her own place (and move out of my house with her three cats). I have a good credit score and my finances are stable. How could co-signing with my daughter affect my credit? Should I help her? Read more...
Why We Borrow Until it Hurts
If the subprime mortgage mess has taught us anything, it is that we are leverage addicts. Nearly all of us are -- from Northern Virginia, where we bought big houses with no money down, to Wall Street, where traders borrowed cash to make bigger bets on the housing market. The question worth asking now is: Why do we love leverage so much that it hurts? Read more...
Consider Your Goals When Deciding to Refinance
The rules have changed in the refinancing game.
With the real estate market sluggish and credit tight, replacing your mortgage could be harder than buying a house was a few years ago. Lenders want proof of your income, employment and assets like bank accounts and investments. The savings on a very large loan can be significant with a small drop in rates. Read more...
10 questions before getting a secured credit card
Credit cards are a fact of life.You need one to make a hotel or plane reservation, or to rent a car, even if you plan to pay cash. Many stores require a credit card to accept your check. Responsible use of a credit card builds a good credit rating, too, marking the owner as mortgage-worthy. But people who have never had credit or need to repair a poor credit history may not qualify for a regular credit card. For them, a secured credit card may be the only way to establish, or re-establish, credit. Read more...
Qualified Borrowers Face Credit Squeeze
An applicant has to be a prime borrower to qualify for a mortgage or to refinance a loan.Two months ago, one out of every 15 of his top-rated loan applicants was turned down. "Now, it's four out of 15," he said. In recent weeks, the situation has deteriorated as mortgage companies worried about a recession have pulled back further on making new loans and refinancing existing mortgages, and have terminated home-equity lines of credit, said lenders, brokers, and borrowers. Read more...
Credit Checks Become Bigger Part of Job Hunt
Since 9/11, employers have been requiring more background checks on prospective workers. But say you're applying for a managerial position. Do you expect a background check? What about a check of your personal credit? Credit checks are often required for certain levels positions or for certain roles in a company. Read more..
Credit Reporting & Scoring
Your 'Free' Report Will Cost You.
The Claim. If you watch TV, you're probably familiar with the FreeCreditReport.com guys. They have to work in a pirate-themed resaurant, ride a bike instead of driving a car, and live in their in-laws' basement, all because they didn't check their credit report free at FreeCreditReport.com...The Check. If you go to their site.... Read more..
Ordering Your Credit Reports
The Fair Credit Reporting Act (FCRA) states that every consumer is eligible for one FREE credit report per year from each of the three credit reporting agencies. If you have been denied credit, the report is also free. It's very easy and every consumer should take advatage of this opportunity. Read more...
The Topic: Credit Scoring
The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money. This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks—people who are more likely to file claims than they are. Read more...
Credit Scores Didn't Fail in Screening Applicants For Subprime Loans
Credit score experts have bragged about the way the all-important three-digit number is able to predict a consumer's likelihood of repaying a loan. But did they fail to screen subprime mortgage applicants properly? If you ask Fair Isaac Corp., which developed the dominant FICO score, the barometer did exactly what it was supposed to do – signal that people with poor credit are at high risk of not repaying a loan – and that lenders misapplied the tool. Read more..
Secrets of the 800 Score Credit Club
With a slumping housing market, increased insurace premiums and high fuel costs, not to mention depressing 401(k) statements - the financial picture of many South Floridians isn't pretty. Read more..
Worries About Healthcare Credit Scores
You arrive at the hospital for a medical procedure. But instead of checking you in, the person at the front desk says, "Sorry, your healthcare credit score is too low. No healthcare for you!" That's the alarming specter raised by recent reports of the scoring system hospitals and other providers use to figure out whether patients have the resources to pay and are likely to do so. Read more...
Know Your Score
In times like these, a good score is more important than ever. Whether you're looking for a mortgage, a credit card or a small business loan, the standards are now tougher. If you want to get the best rates, you need a great score. FICO scores range from 300 - 850 and you should shoot to have a score of 750 or higher. The good news is you can take steps to increase your score fairly quickly. Read more...
Lift Your Credit Scores to Save Money
The credit crunch has shocked skittish lenders into tightening up. Loans and credit are tougher to get. Some car and home insurers judge you by your credit score, too. The higher your score, the easier to get a loan. A higher score helps you land a lower interest rate. So it pays to know how you can raise your score. Read more...
The Newest Vital Sign: Your Credit Score
To figure out which patients are likely to pay their bills and which ones are best written off as charity cases, hospitals are peering into patients’ financial records. Some are using traditional credit scores that are used for things like car loans and mortgages. Hospitals say it allows them to figure out more quickly which patients qualify for financial assistance programs, and makes them less likely to hound people who can’t or won’t pay. Read more...
PIRG Survey Finds Credit Reports Riddled with Errors
A national survey released in April, 2003 by the U.S. Public Interest Group (PIRG) found that, despite passage of a 1996 federal law, nearly one-third of credit reports still contain serious errors that could cause consumers to be denied credit. . .Twenty-nine percent (29%) of the reports resulted in serous errors that could result in the denial of credit. Read more...
Credit-Score Group Spent $1.6M Lobbying
The trade group for credit-reporting agencies spent $1.6 million in 2007 to lobby on legislation related to mortgage reforms and anti-predatory lending, among other issues. Read more...
Fannie Mae Says No To Credit Scores Below 580
Fannie Mae is setting new rules about what mortgages it will buy, including, for the first time, a credit score threshold. The District of Columbia-based mortgage giant has told lenders it will no longer buy most loans made to borrowers with credit scores below 580, nor will it buy loans that have been more than 60 days past due within the past year. Read more...
Improving Your Credit Score
Credit Restoration Companies: Another Option for Borrowers
A low credit score can be a loan officer's biggest furstration when the LO is creating the best loan to suit his or her client. However, when the score just does not fit the puzzle, there are options. Credit restoration companies provide one option that may allow originators to save themselves frustration and to better spend their time preparing loans for other clients with sufficient scores. Read more...
Closing Credit Cards Dings Score
Most savvy consumers know about the FICO score -- the three-digit number that companies use to determine interest rates. Many still wonder what will happen to their credit scores if they cancel credit cards or sign up for new ones. With no clear-cut answers as to how specific actions impact a score, consumers must resort to trial-and-error credit management, or they do nothing for fear of making any changes that might damage their credit ratings. Read more...
Collections & Charge-Offs
Collection Industry Has Duty to Treat Consumers Equitably
If there were no consequences for non-payment of one's obligations, the temptation would be for no one to pay his bills. Debt collection is an important part of our economy. All consumers would be penalized if businesses were unable to recoup losses resulting from bad debt. Nonetheless, just as consumers must act responsibly, so too must collection professionals. Members of the collection industry should never miss the opportunity to do the right thing in helping consumers meet their responsibilities. Read more...
Debt Collection Complaints Still Top FTC List in '07
Complaints about illegal and questionable debt collection practices rose slightly in 2007 over the previous year, according to the latest report released by the U.S. Federal Trade Commission (FTC). Those complaints rose to nearly 71,000 in 2007. This comes as debt collection activity and consumer defaults on overdue credit card obligations have skyrocketed in recent months. Read more...
Debt Collection Tops FTC List
Given the current economic downturn, it probably won't surprise anyone that one industry experiencing a lot of growth is debt collection. Unfortunately, with that growth has come an increase in complaints from consumers on how they are being treated by the companies or attorneys trying to get them to pay up. Last week, the Federal Trade Commission released its latest report to Congress on the Fair Debt Collection Practices Act. This act prohibits deceptive, unfair, and abusive practices by third-party debt collectors. Read more...
Fighting an Unethical Debt Collector
You've gotten plenty of signals that you're dealing with an unethical collector. By federal law, a collection agency must send you a written notice within five days of its first contact with you.
The agency's failure to send that notice or honor your request to be sent a bill are bad signs. Read more...
Debt Collector Has to Pay Up
A state crackdown on Jacksonville-based debt collection businesses won a $1.3 million judgment against Ellis Crosby & Associates, the attorney general's office announced Monday. The judgment covers both restitution and civil penalties.
The penalties stemmed from an investigation that found the company's debt collection tactics included posing as law enforcement agents, threatening to seize debtor's property, and threatening to physically hurt people. Read more...
Debt Collectors Try to Put on a Friendlier Face
Just in time for a recession, the debt collection industry is working to shed its reputation for remorselessly hounding people. Oh, the collectors still want the money. But now they would like to be seen as helpful and sympathetic, even a force for good. They have started calling the indebted “our customers.” Read more...
Ignoring the Calls Won't Make Your Debt Go Away
Right now, there are folks who cringe when their telephones ring. These people get a sick feeling knowing that the caller is likely a creditor trying to collect on an overdue bill. Much of the news lately has focused on people behind on their mortgages. But the fact is, other debts are bringing people down, too. Americans are carrying $2.5 trillion in non-mortgage debt. In a recent column. I want to discuss what debtors should do when they get a call from a collection agency or law firm. Read more...
What Debt Collectors Can't Do
One business is going strong in this flagging economy: debt collection. In 2006, complaints about debt collectors were up 21 percent from the previous year, according to Edward Johnson, president and chief executive of the Better Business Bureau in the District. "Consumers should accept responsibility for their debts," Johnson said. "However, they do not have to accept abusive collection tactics. They need to know their rights." Read more...
Defaulted Student Loans Collections Market at $974 Million
With the Department of Education's portfolio of defaulted student loans now standing at $40 billion, student loan collections represents a large and growing sector of the debt collection / accounts receivable management industry (ARM). Kaulkin Media announced today the release of its newest market report, which sizes the student loan collections market at $974 million annually.Read more.
Debt Relief Can Cause Headaches of Its Own
With the economy slowing and houses no longer easy sources of cash, a growing number of consumers cannot pay even the minimums on their credit cards. What can borrowers do to extricate themselves? If belt-tightening suffices, one option is a debt management repayment plan in which interest rates, but not balances, are reduced. Another option is debt settlement, and done correctly, it can absolutely help people. The experts agree, however, that “buyer beware” is the best advice when considering debt settlement companies. Read more...
Your 5-Minute Guide to Bankruptcy
Overwhelmed by debt? Bankruptcy is the means of last resort to rebuilding your financial well-being. Before you make a decision to file for bankruptcy, consider the following:can you accept the immediate consequences of bankruptcy: ruined credit, higher interest rates on new loans and credit cards, higher insurance premiums, difficulty renting a new apartment? Chapter 7 remains on your credit reports for seven to 10 years, Chapter 13 for seven. Read more...
Help! I’m Drowning in Debt!
So many people right now are suffering with debts that are much larger than they realized when they were spending the money. If the minimum payments are killing you, then you're right to try to take an in-between step before you consider bankruptcy. I'd advise you look at a credit counseling service. My preference, though, is for credit counseling rather that debt settlement. Read more...
Think Twice - It's Their Debt, But it's Your Problem
Financially distressed workers are like a poison poured on the floor of the workplace. You can't see the poison, but it's there. It permeates more than just the employee who has a problem. It permeates the workforce. And most employers don't give a damn. About a third of employees say that financial problems are affecting their job performance. Read more..
Abuses by Credit Counselors
Hidden charges, high fees and even failure to send payments to creditors are widespread among newer credit counseling agencies, senators and federal regulators contended Wednesday. Read more...
Summons is 'Initial Communication' Under Fair Debt Collection
A law firm's filing of a summons and complaint on behalf of a creditor after a debtor missed payment on an installment contract is an initial communication that triggers obligations to inform the debtor of his validation rights under the Fair Debt Collection Practices Act. Essentially, a law firm can simply file a summons on a past due debt, which signifies a debt is being collected, without personally writing a letter to the consumer. Read more...
Judgments & Tax Liens
Coming soon...
Foreclosures & Repossessions
Mortgage Workouts, Now Tax-Free for Many Homeowners; Claim Relief on Newly-Revised IRS Form
Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the IRS. Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. Read more...
Mortgage Forgiveness Debt Relief Act
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007. Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence. What does that mean? Usually, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude certain cancelled debt on your principal residence from income. Read more...
Identity Theft
ATM Identity Theft Ring Busted in Miami
Miami Beach police say that thieves planted electronic devices inside ATMs to steal credit card and PIN numbers. Police say the men are charged with credit card fraud and identity fraud.
Read more...
Four People Charged in Identity Theft Scheme
A former Rhode Island Hospital security guard and three former RadioShack workers have been charged in a scheme to steal the identity of hospital patients. He obtained patients' names, dates of birth and social security numbers. Bermudez, helped by three RadioShack employees, allegedly used that information to open credit card accounts and activate cell phone accounts. Read more...
Wanted: Your Good Name
Identity theft can ruin your family's financial history. Here's how scammers operate and how you can stop them. "The thieves had taken that one check from my mailbox, and were able to change the amount from $17.50 to $1,750." In the past five years, the Federal Trade Commission (FTC) estimates about 275 million Americans have been the victims of identity theft. Read more....
Stealing Your Life
Identity thieves hit nearly 10 million Americans last year - could you be next? It's a shattering violation of privacy, a near-perfect crime-and most victims don't even know they've been robbed until it's too late. If you think it can't happen to you, think again. Read more...
