Financial Information

Jeremy M. Simon’s 3 favorite credit scoring questions

It’s hard to believe I’ve made it to 100.

As of this entry, I’ve written 100 columns for CreditCards.com readers addressing their questions about credit scoring and reporting. My amazing readers have sent in all sorts of credit-related questions, ranging from the straightforward to the strange. I’ve enjoyed reading them.

In celebration of 100 Credit Score Report entries, I’ve picked several of my favorite questions for a second look. These are questions that surprised, challenged or amused me. They are great examples of the struggles consumers face — and hopefully overcome — when it comes to their credit.

Whether you’re revisiting these questions or reading them for the first time, I hope you enjoy them.

Question 1:  Planning to ruin an ex’s credit  

I just broke up with my boyfriend and I really hate that [deleted]. He’s an abusive alcoholic, but he has managed to have really good credit. Me, on the other hand, my credit’s in the toilet. I finally worked up the courage to check my score (I had to peek between my fingers) and it was as bad as I thought — down around 500. I read your website about authorized credit card users and piggybacking and how you can “pass through” your good credit to an authorized user. That gave me an idea. Does that process work in reverse? In other words, can I mess up that stinking drunk’s credit by adding him as an authorized user on my account? — Jamie

In perhaps the only question I’ve received that needed to be edited for language, Jamie describes an awful ex-boyfriend who she’d like to punish by ruining his good credit. But what she outlines is a bad idea — for several reasons:

First off, her plan may not work. Not all banks will add just anyone — specifically a nonspouse — as an authorized user on a credit card. Additionally, one of the credit bureaus (Experian) doesn’t list negative information on authorized user’s credit reports .

Her ex, meanwhile, could turn the tables. By requesting his own card on a shared account, her ex-boyfriend could run up debts he (legally) has no responsibility to repay.

Finally, by carrying out that plan, she will be breaking the law. The plan outlined above constitutes identity theft , experts say, which could possibly land her behind bars. And that’s never something I’d recommend for my readers.

Question 2:  Getting accurate info off a credit report  

I live in Cincinnati, and my fiancee and I had a couple rough years back in 2006, causing us to have delinquent bills. It affected our credit score drastically. We are now debt free and are in the process of trying to purchase a home. Our credit scores just aren’t ready yet, and my question for you is: Is it possible (legally) that a creditor could delete our negative credit listings if I ask them or give them a decent reason to do so? Is it something that is possible, or is it mandatory that it has to stay listed on your report for at least seven years? Thank you so much. — Nicole

Lots of readers want to clean up their credit and get inaccuracies off their credit reports, but it’s not often I get a question about getting accurate information removed. If I did, I’d have to tell more readers it’s typically not possible to delete correct credit report items. Still, Nicole does have some options:

• Debt collectors may agree to a “pay for deletion,” which involves erasing your missed payments from credit reports in exchange for a lump sum payment.
• Wait it out. Under the Fair Credit reporting Act (FCRA), negative items typically remain on a credit report for up to seven years, so figure out a way to pass the time until those negative items fall off your credit reports.
• During that downtime, catch up on any missed payments and dispute any credit reporting errors to help your score’s recovery.
• Explain the reason for any financial setbacks in a  100-word statement that gets added to your credit reports. Lenders may consider the circumstances that got you into trouble.

Question 3:  Another good reason to pay your traffic tickets  

I received a photo ticket in a state other than the one in which I reside. I have not yet paid the citation, which is labeled a civil penalty rather than a criminal penalty (since photo tickets apparently are hard to prove beyond a reasonable doubt). I have received a letter saying that if I don’t pay the penalty, the county will report it to a collection agency, which will then affect my credit. Putting moral considerations aside for the moment, can my credit actually get dinged for this? What do traffic safety and credit have to do with each other? — James

Getting a traffic ticket while traveling out of state created a conundrum for reader James: Should he pay it to prevent that citation from potentially wrecking his credit? Or should he put morality aside and not pay, figuring the threats against his credit didn’t amount to much? What do you think I recommended?

James needs to pay that ticket — or see his credit score fall: Since money owed to the county is not much different than a debt owed to a lender, a collection agency could very well come after you for the cash. By paying the ticket now, the reader may avoid having that ticket turned over to a collection agency.

Having that ticket in the hands of a collection agency can mean it gets reported to the credit bureaus as a collection account. Collection accounts that appear on a credit report certainly can lead to a lower credit score — with a drop of up to 100 points in the case of high FICO credit scores . (The latest version of the FICO score — FICO 8 — however, ignores collection accounts of less than $100.)  

Still, it’s worth fighting an unfair ticket. If you’ve paid and it still shows up on your credit report, be sure to dispute its appearance with the credit bureaus.

Keep those questions coming! I look forward to addressing your next hundred credit concerns. 

Good luck!

–Jeremy 

See related:  Scheming to ruin an ex’s credit score isn’t wise , Want accurate, negative info off your credit report? Good luck , Unpaid traffic citations can lower drivers’ credit scores , How to add a written statement to your credit report , How to dispute credit report errors ,  FICO 08: How new credit score formula will affect you

 

• Jeremy M. Simon’s 3 favorite credit scoring questions
• Mending a credit score hurt by a student loan default
• In U.K., unheeded court order can clobber your credit

This article courtesy of Jeremy M. Simon’s 3 favorite credit scoring questions

Traditional Bank Lending Becoming Difficult For Small Businesses

Liquid Capital is Experiencing Record Numbers As Businesses See Positives in FactoringToronto, ON (PRWEB) October 31, 2011 Banks don’t seem to have any money to lend right now – or at least none they want to – and equity markets aren’t a great value proposition for many companies with investors skeptical about, well, everything. That’s good news for factoring companies such as Liquid Capital.U.S …

This article courtesy of Traditional Bank Lending Becoming Difficult For Small Businesses

Responsible Debt Relief Announces Pathbreaking Housing Counseling and Mortgage Modification Assessment System

A new paradigm for assessing household credit capability must be explored if the nation is to avoid a deeper and more prolonged recession. There is a solution.Rochester, New York (PRWEB) October 31, 2011 Dr. Robert D. Manning, distinguished consumer finance scholar (author of CREDIT CARD NATION and link to http://www.creditcardnation.com) and founder of the nonprofit Responsible Debt Relief …

This article courtesy of Responsible Debt Relief Announces Pathbreaking Housing Counseling and Mortgage Modification Assessment System

Debt Management Professionals Announces New Website and the Explanation of Available Debt Relief Programs

DebtManagementProfessionals.net, a debt management referral agency, finds that consumers are often confused when considering debt programs. Debt Management Professionals explains just how these programs work.(PRWEB) October 29, 2011 DebtManagementProfessionals.net, which is an online debt management referral agency, provides it’s applicants with detailed information regarding available debt …

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Best Credit Cards If Your Credit Is In The Doghouse

As the fallout from the 2008 financial crisis spread to credit card issuers in 2010, as many as 11 in 100 credit card accounts fell so far behind that banks charged them off as noncollectable. Though that ratio has dropped by half since then, you may be one of the many consumers who now face rebuilding your credit with tarnished credit reports. According to the Federal Reserve, your credit report can impact more areas of your life than just whether you can pay for your next online shopping order with a credit card:

• Insurance companies use credit scores to assess risk and set rates. Some actuaries believe that consumers with bad credit might destroy their property to escape car loans or home loans.
• Employers review credit reports to determine trustworthiness of job applicants. If your career involves handling cash, credit card numbers or customer information, your employers want to reduce the risk that a new hire will steal to cover their debts.
• Telephone, cable and other utility companies use credit scores to determine new service deposits. If your credit history is doubtful, ordering a new cell phone or a cable box could cost you extra setup fees and higher deposits.
• Landlords use credit scores to rank potential tenants. Because credit reports omit personal details like race and age, landlords can legally use them to select applicants they feel will pay the rent on time while causing the least property damage.

Secured credit cards boost your credit score by building trust with new lenders. You’re putting your own money on the line, leaving hundreds or thousands of dollars on deposit in a savings account you can’t touch. “Churn” some routine expenses on your card and revolve up to about a third of your credit line to get the biggest impact on your credit report. Fail to make monthly payments or exceed your limit, and the deal’s off.

Unlike instant approval credit cards, secured credit cards require additional scrutiny by loan officers and can take up to four weeks for approval. Banks use the time frame as a filter: if you can get by without your deposit for the better part of a month, they can see that you have the cash flow to properly rebuild your credit. We can suggest five sources for secured credit cards that won’t rip you off:

1. rCard If your credit isn’t at rock bottom, Capital One may offer you a credit line greater than the amount of your initial deposit. Making this card’s 22.9 percent APR pay off requires leaving the unsecured portion of your credit line untouched. When the bank reports your low credit utilization and your on-time payments to the credit bureaus, you’ll enjoy a slight lift in your credit score. Maintain your good habits over time, and Capital One may even graduate you to one of its cash back rewards cards.
2. Orchard Bank Classic MasterCard and Classic Visa If you can afford to park a larger deposit with this division of HSBC (which is being acquired by Capital One), you’ll benefit from a better credit utilization percentage. Orchard waives the first year of its $35 annual fee for new customers while offering a 7.90 percent APR on purchases. A cash advance APR of nearly 21 percent means you’ll need to deposit money you won’t need to touch for a while to get the most from this card.
3. Citi Secured Card Citi has rolled out one of the industry’s most aggressive fraud prevention systems, and it’s included in this $29 annual fee secured credit card. Make 18 months of consistent payments and you could be considered for one of Citi’s unsecured cards. At this writing, the variable interest rate on the Citi Secured Card hovers at just above 18 percent.
4. First Progress Platinum Secured MasterCard Synovus Bank’s exposure to subprime credit card debt during the financial crisis forced it to launch two new brands: the familiar Green Dot prepaid debit card and the new First Progress secured credit card. Of the two, only the First Progress card reports customer activity to all three credit bureaus. At this time, Synovus markets First Progress with a $39 annual fee and an APR below 15 percent.
5. Your local credit union As member-owned, non-profit organizations, credit unions offer some of the best terms on secured credit cards. For instance, Navy Federal Credit Union offers a version of its nRewards credit card with no annual fee, an APR under 9 percent, and up to 1 percent cash back on purchases. Teachers Federal Credit Union offers a no-fee secured credit card with an APR below 7 percent. If you’re not a teacher or a Navy veteran, your local credit union may offer similar terms. However, you may have to commit to attending a money management seminar and to bringing your other financial accounts into your credit union membership.

Desperate for credit?

Here’s a final word of caution. Our website about the best credit cards on the market often attracts questions from consumers in trouble with their credit. According to Amber Stubbs, managing editor for CardRatings.com, these questions often indicate a serious money problem that a new account isn’t likely to solve.

Secured credit cards won’t magically improve your credit score overnight, and they won’t get you instant cash. To enjoy the real benefits of credit cards, you’ll need to keep your secured account in good standing for a year or two. Commit to earning and saving more money, so you can control your credit cards instead of letting them control you.

Important Note! The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we can not guarantee the accuracy of the information in this article. Please verify all terms and conditions of any credit card prior to applying.

The original article can be found at CardRatings.com:
“Best credit cards if your credit is in the doghouse“

This article courtesy of Best Credit Cards If Your Credit Is In The Doghouse

Pros And Cons Of Credit Monitoring Services

Identity theft is a complex problem and one that we’re relatively powerless to prevent. Who knows how many government entities, doctors’ offices, credit card companies and other entities have sensitive information, like our Social Security numbers, addresses and mothers’ maiden names? How can we trust every person who has access to the paper and electronic records containing that information, to keep it safe from criminals? How do we know that some of the people who are authorized to access this information aren’t criminals themselves?

This is where credit monitoring comes in; a seemingly tidy solution to the problem of stolen sensitive information. For around $10 to $15 a month, credit bureaus, banks and other financial services companies promise to keep an eye out for signs of potential fraud.

What Credit Monitoring Services Offer
Here are some of the protections credit monitoring services say they offer.

Experian Credit Tracker Credit Monitoring, a $14.95 per month service, checks each of your three credit reports daily and emails you if anything changes. It only grants you access to your Experian credit report and score, however. The company also offers a $50,000 guarantee of identity theft expense reimbursement and access to a fraud resolution specialist, if your identity is stolen.

For identity theft protection, consumers can purchase a service for $12.95 per month from Experian, that provides access to your Experian credit report (but not score), the same monitoring and email notification service, daily internet scanning for unauthorized use of your Social Security number, debit and credit cards, $1 million in identity theft insurance and several other protections. The insurance is supposed to cover expenses such as lost wages, private investigator services and legal fees that you incur, if your identity is stolen.

Citi Identity Monitor, at $12.95 per month, checks your credit file every business day and notifies you of any changes, provides services for fraud and identity theft victims and reimburses expenses associated with identity theft, up to $25,000. Its coverage is open to anyone, not just Citibank customers, and applies to all of your credit cards and bank accounts, not just ones you might have with Citibank.

Secure Identity Systems calls itself “the most comprehensive program available to protect you and your family from identity theft.” It goes beyond credit monitoring to look at Social Security, public records, real property records, phone databases and postal service databases to look for signs of identity theft. The company also provides phone assistance to help with identity recovery and reimburses up to $25,000 in expenses incurred from cleaning up after an identity thief. The company offers a number of pricing plans, based on enrollment terms and the number of people to be covered.

Can Credit Monitoring Services Deliver?
Consumer advocates, including Consumer Reports, have stated that credit monitoring services are not a good use of consumers’ money, because they are inadequate at protecting against identity theft.

Here are some types of theft that credit monitoring won’t alert you to:

• someone using your information to apply for a job
• someone using your information to get a cell phone
• someone using your Social Security Number (SSN), but not your name, to open new accounts

Another shortcoming of credit monitoring is that it can’t prevent the theft from happening in the first place, it can only notify you that it’s already happened. Also, most programs’ expense reimbursement offers don’t apply if your identity is stolen before you sign up for the service, even if you’re completely unaware of the theft. In addition, the Consumer Federation of America says that no identity theft protection service can provide complete protection.

The Bottom Line
Identity thieves operate in many ways. Some belong to organized crime, some use fake checks with real account information and some steal information online, via security breaches, social engineering scams and hacking. Unlocked mailboxes and wallets remain prime targets for low-tech criminals, and smartphones create further opportunities for ID theft.

Though you can get your credit report for free once a year from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion), a lot can happen in a year and the three reports do not always contain identical information, making it possible to miss an important red flag, if you only check each report once a year.

Credit monitoring, when combined with identity monitoring, can offer an added layer of protection, but consumers should weigh the ongoing costs of these programs against their benefits, and be aware that all products have shortcomings. Consumers can take extra steps to further protect their identities, but there is no foolproof system for preventing or catching this crime.

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This article courtesy of Pros And Cons Of Credit Monitoring Services

CreditNowUSA.com Announces they are offering Loans

CreditNowUSA.com announces they are offering loans.(PRWEB) October 27, 2011 CreditNowUSA.com Announces they are offering loans.CreditNowUSA.com believes that “Loans can be great tools to be used for various reasons. However, they can also be the nails in your coffin, financially. It takes a certain amount of discipline to use loans appropriately and effectively. CreditNowUSA offers a few …

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Four Common Myths About Credit Limits: Know The Truth For Wise Credit Card Use

This post provided by IndexCreditCards.com.

Although the definition of credit limit is straightforward–it’s the maximum amount you can borrow on an account–a variety of misunderstandings surround the concept.

Here are four myths and what you should know to manage your credit cards effectively:

Myth No. 1: My credit limit is my spending limit.

Actually, your credit card spending should fall well below the credit limit. Most experts advise keeping credit card balances to 30 percent or less of credit limits. Using too much of your available credit hurts your credit score.

Myth No. 2: An increase in my credit limit means I can afford to charge more on my credit card.

Your credit card company might raise your credit limit after you’ve paid your bills promptly over a period of time. At that point, the issuer sees opportunity to make more money. The higher the balance you carry, the more interest the credit card company earns.

Don’t interpret a credit limit increase as permission to go on a spending spree. Your spending should fall in line with your long-term financial goals and monthly budget.

Myth No. 3: My credit limit has nowhere to go but up, especially if I pay down my credit card debt.

Many consumers learned this was untrue last year as credit card companies slashed limits in a reaction against previous over-lending. In some cases, consumers whose credit limits were cut were doing all the right things–paying their bills on time and paying down large chunks of their debt. This is one change that credit card companies can make without providing advance notice.

Myth No. 4: I’m stuck with my credit limit.

You can ask for a higher credit limit by calling your credit card company, and you just might win if you can show your financial circumstances have improved. You can also opt in for a program that allows you to go over the limit, but you must pay a fee. Before new federal credit card regulations kicked in, many companies were letting their customers go over their credit limits and then charging fees for the privilege. Now they must get customers to opt in for such programs.

View credit limits dispassionately. Don’t let dampened credit limits get you down, and don’t let high credit limits go to your head. Use your head instead to set your own reasonable spending limits.

The original article can be found at IndexCreditCards.com:
“4 Common Myths about Credit Limits: Know the Truth for Wise Credit Card Use“

This article courtesy of Four Common Myths About Credit Limits: Know The Truth For Wise Credit Card Use

Tips On Transferring Your Credit Card Balance To Another Issuer

 

Many credit card consumers are once again being flooded with attractive offers to transfer their existing balance to another issuer. Several issuers are now offering 0% interest rates for over a year on balance transfers and purchases. Most of these offers are going to cardholders with good or excellent credit scores since they represent less risk of defaulting.

If you have good credit and your credit card APR is currently above 15%, this may be a good time to consider transferring your balance to a credit card with a lower rate. Transferring your balance to a card with a 0% introductory rate can save a consumer a significant amount of money. If you currently have a balance of $5,000 and an APR of 15%, a 0% rate for a year will save $750 in interest payments.

But there are several tips for consumers when considering a balance transfer:

1) Balance transfers are not free. They come with a balance transfer fee, usually 3% or 4% of the total amount you transfer. Before you apply for a balance transfer card, do the math to see if the amount of interest payments you save with the introductory offer is more than the balance transfer fee that has to be paid immediately.

2) If you feel you will be unable to pay off the entire balance during the introductory period, pay attention to the interest rate that you will pay after the introductory rate expires. In this case, a low APR for the long-term could be more important than the length of the introductory period.

3) If you currently have a low credit score, you may not receive the introductory offer that is advertised. The ongoing APR you receive may be higher or your introductory period may be shorter. Or you may not be able to transfer your total balance.

4) If you do transfer your balance, you must pay your credit card bill on time every month. If you have a late payment, your introductory period will likely end and you will be assessed the ongoing APR on the transferred balance.

5) The introductory rate may only be applicable for the amount you transferred. Unless the introductory offer specifically includes new purchases, any purchase made with the new credit card will be at the ongoing interest rate.

6) If the offer you receive does not meet your needs, decline the credit card. Limit the number of applications because multiple credit applications are a red flag on your credit report and can lower your credit score.

7) There is no grace period with balance transfers. Interest charges begin at the time the check is issued to your new credit card issuer.8) The new issuer pays the amount of the balance directly to the old issuer and the amount you owe them will be reduced by the amount you transferred. The available credit on your new account will be reduced, as if you had made a purchase.

9) It takes about four weeks for the balance to be transferred. Continue to make all required payments until you confirm that the balance transfers were made. Transferring a balance does not automatically close your old account. If you want to close that old account, contact the issuer directly.

Here are some of the more attractive balance transfer offers on the market:

Citicards.com/usc/platinum/MC/external/affiliate/Sept2011/default.htm?sc=4T3ZJ7W1&m=9CJ1MDU75ZW&B=M&app=UNSOL&langId=EN&siteId=CB&t=t&link=Consumer_576745745&screenID=3000&uc=BCP&cmp=AFA~01~100111~CARDSACQ~LowCards&BT_TX=1&ProspectID=A276A073C5DE410EA5124871F1A7C3B1″>Citi Platinum Select or Citi Diamond Preferred
Both these cards come with a 0% interest rate for 21 months on both the balance transfer and new purchases. The balance transfer fee is 3%. The ongoing APR is 11.99-20.99%.

Discover More
This special Discover More offer is for 0% interest on balance transfers for 18 months. Consumers also receive 0% on purchases for six months. The balance transfer fee is 3% and the ongoing APR is 11.99-20.99%.

Capital One Platinum Prestige
Consumers receive 0% interest until December 2012 on both purchases and balance transfers. The balance transfer fee is 3%. The APR is 10.90-18.90%.

Posted by LowCards.com

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San Francisco Real Estate Agent Tim Gullicksen of Zephyr Realty Announces New High Balance Loan Limits Starting in …

Tim Gullicksen of Zephyr Realty, a San Francisco real estate agent, helps guide clients through the new high balance loan limits that begins this month.San Francisco, CA (PRWEB) October 26, 2011 At the height of the financial crisis in 2008, the high balance loan limit was temporarily raised to $729,750 in order to stimulate home sales. Since that time, the temporary loan limits were extended …

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