Authorized User Accounts and Bankruptcy

Posted on April 23, 2010 by brian

Question:

If someone is filing chapter 13 bankruptcy and one of their debts is money borrowed from a family member (cousin) from a unsecured line of credit and is an authorized user on the account and that account is reporting to their credit.

  1. If they include that debt in the bankruptcy, how will it report on the primary account holders report (cousin's)?  
  2. Does the cousin have a chance at getting that account or negative info removed from their credit?

 - John

Answer:

First, I have to preface this by saying I'm not an attorney and that you should seek legal advice from an attorney who specializes in bankruptcy.

As far as I know you are not liable for any debt when you are an authorized user. In other words, if you worked for Goldman Sachs and they gave you a company credit card as an authorized user for the purpose of entertaining clients, you would never have to pay the charges back. That would be your employer's responsibility.Since you are not liable for the debt, I don't see why you would have to include it on your chapter 13 matrix of creditors.

On the other hand, if Goldman Sachs filed for bankruptcy and the tradeline reflected that on your credit, all you would need to do is write a dispute letter to the CRA's asking for the account to be removed.

One more time in plain English…If you are the account holder and you're filing Chapter 13, and your cousin is the authorized user, then he just needs to dispute the tradeline.

Posted in Authorized Users, Credit repair | 1 Comment

How to Remove Credit Inquiries

Posted on April 12, 2010 by brian

Hey Brian I noticed there are a lot of inquiries on my credit report how do I stop people from checking my credit without my permission? Bruce

The first thing you need to know is there are two kinds of inquiries – soft and hard.

A soft inquiry occurs when a company buys your information from one of the 3 credit reporting agencies. For instance, let's say Capital One wants to get more customers. They may contact Equifax and buy a list of men and women, 18-65 years of age, with FICO scores 680 or greater. They then mail those consumers a pre-approved or pre-qualified credit offer.

A soft inquiry doesn't hurt your credit score. If you want to stop receiving those types of offers just go to www.optoutprescreen.com or call 1-888-5-OPTOUT (567-8688).

A hard inquiry, which makes up as much as 10% of your FICO score, is logged anytime you apply for credit. That includes asking your credit card company for a credit limit increase or applying for a loan to buy a house or car. Hard inquiries stay on your credit report for 24 months, but only the last 12 month's inquiries effect your credit score.

Authorized or Unauthorized?

The only companies authorized to pull a hard inquiry are those you authorize either verbally or in writing. When you apply for a loan or credit there is a document or clause included that authorizes the financing company, or any or their assigns, to obtain your credit for the purpose of determining risk.

What generally happens is when your account gets transferred or sold, each new company leverages that authorization to obtain new copies of your credit for their own purposes, whether that's collections or to extend you new credit offers.

Let's say you apply for car financing. The car dealer's finance department pulls your credit and sends it to 3 different lenders. Those 3 lenders may also pull your credit under that same authorization. You now have 4 new credit inquiries.

3 years later the car dealer and the lenders all assume your lease is about to run out and you'll be in the market for another car. Using that same authorization they may pull your credit and send you a pre-approved offer.

You have no idea that all these lenders are pulling your credit, so when you go car hunting you're surprised to find your FICO score has dropped due to a large number of "unauthorized" inquiries.


Here's How to Remove Unauthorized Inquiries

If the creditor has a signed authorization, then they are legally allowed to pull your credit. My objection is when they cause you financial problems by abusing that authorization months or years after you gave it. Insiders have told me that most creditors store those documents after 6-18 months.

How does that help you? Just send a certified letter requesting proof they are authorized to pull your credit. If they can't provide proof, because they can't find your authorization, then they must remove the inquiry.

Posted in Credit repair, inquiries | 3 Comments

Are Score More Credit's Clients Suckers?

Posted on March 26, 2010 by brian

HI BRIAN. I AM A FORMER LOAN OFFICER FOR AMERIQUEST, AND COUNTRYWIDE.  I WAS ALSO A STOCKBROKER IN THE 1990'S FOR 4 OR SO YEARS. ANY I HAVE FAIRLY HIGH KNOWLEDGE OF CREDIT REPAIR.  I USED VERACITY CREDIT ABOUT 5 YEARS OR SO AND IT WORKED WELL.  I AM IMPRESSED WITH YOUR ENTREPENEURIAL BACKGROUND.  HOWEVER, I WAS DISAPPOINTED TO READ YOU CHARGE AROUDN 3K UP FRONT FOR YOUR SERVICES. 

I READ IT'S NOT APPROPRIATE OR POSSIBLY ILLEGAL TO REQUEST UPFRONT PAYMENT FOR CREDIT REPAIR SERVICES.  ADDITIONALLY, COMPARING $250 JEANS TO KICKING SOMEBBODY THAT'S ALREADY DOWN AND THEN JUSTIFYING YOUR ARGUMENT BY SAYING THAT LEXINGTON LAW AND VERACITY ADVISE THEIR CLIENTS TO REMAIN IN THEIR SYSTEM FOR TWO YEARS IS JUST BORDERING ON UNACCEPTABLE.  I KNOW FOR A FACT THAT THEY DONT' TYPICALLY ADVISE SUCH A LONG TERM CONTRACT. 

CREDIT REPAIR IS TYPICALLY 1-3 ROUNDS OF DISPUTES.  DEPENDING ON SEVERITY OF CREDIT AND THEN SOME FOLLOW UPS.  WORST POSSIBLE SCENARIO IS AROUND 6 MONTHS AND THAT'S IF SOMEONE HAS ABSOLUTELY CELLAR DWELLING CREDIT. 

ANY WAY.  I UNDERSTAND WHAT YOU ARE TALKING ABOUT WITH CHARGING A PREMIUM FOR HIGH QUALITY SERVICE AND AS P.T. BARNUM SAYS THEIR IS A SUCKER BORN EVERY MINUTE.  I DON'T KNOW MAN.  IT JUST SEEMS REALLY STEEP.  MY TWO CENTS.

-Chris Nugnes

Thanks for the email, Chris, and the compliment. I make it a point to post the harsh comments along with the good ones. Please allow me to respond.

First, I would argue that your past experience as a loan officer and stock broker wouldn't qualify you as a credit expert. Far from it. How do I know? I was a mortgage banker and a stockbroker, as well. It wasn't until I began interviewing former executives from FICO, the CRA's, major lenders, and collection agencies that I learned how little I really knew about the credit system.

I've trained a number of employees in my company who were loan officers and loan processors and they're all surprised how little they really know about the credit system. I usually invest 3 whole days just teaching them to read a credit report. Its not your fault or theirs either. As a loan officer you were never really trained on the topics of credit and loan suitability. That's why we have a mortgage crisis. Its interesting to note that both your former employers are closed now..and both were known for predatory lending practices.

I'm glad your experience with Veracity was a positive one. My industry has enough of a bad rap. I have never dealt with them personally. Come to think of it, I never even mention them in my post. I do mention Lexington Law, in so far as relaying the experiences some of my clients had in dealing with them. Their comments are documented in my posted testimonials, many in their own recorded voices.

When you say, "I know for a fact.." you neglect to clarify that your knowledge is limited to Veracity and no other credit repair service. You'll have to forgive me, but that's not a lot of knowledge to base your argument on, nor do you have any knowledge with which to base your opinion that it takes 3 rounds to clean a credit report in most cases.

Although YOU may have seen results in only 3 rounds, my actual tracking of several thousand credit repair cases show we still achieve results in the 5th and 6th rounds. Though I could sell credit repair services for additional months, my statistics show minimal effect after the 6th round. I'm not in business to take advantage of anyone, so I don't go beyond the 6th round.

Let me also point out that I do not charge $3,000 up front. It's a violation of the CROA to charge before a service is fully rendered. I charge a $99 set up fee, which is charged after the account is set up and visible online. Then I charge 6 payments of $250. Payments begin after results are evident, usually in about 50 days. That's a total of $1599, not $3,000. We dispute inaccuracies for a full 6 rounds with the creditors and CRAs, plus I have a full-time certified credit counselor to provide one-on-one coaching on credit building and budgeting strategies.

My service was always intended to be elite. Its no coincidence that the same people who drive luxury cars, have money in the bank, and live in beautiful homes also invest in the best credit repair. I have professional athletes, TV personalities, and some "influential" people as clients. Hardly anyone I'd call a sucker.

Posted in Credit Repair Ethics, Credit Repair Results, Credit Repair Services, Credit repair | Leave a comment

How to Make Money in this Crummy Economy

Posted on February 25, 2010 by brian

I recently sent out a survey asking my subscribers what additional information, products, or services they would be interested in learning from me. An overwhelming majority asked for help making money. Considering the recently released unemployment stats, which by the way drastically understate the severity of the problem, its no surprise why money is a big concern for people.

I have been fortunate to have heard some very wise advice after leaving the Army. I had read Robert Kyosaki's, "Rich Dad Poor Dad", in which he stated there is no such thing as job security. Only business owners can control their own fate.

Employees are subject to the whim of the company's shareholders. If they can be replaced with something cheaper, they will be. With that I developed a chronic case of "unemployability". Any position I took was only for the sake of learning a new skill that I would be able to use in my own business, which I had been building on the side in my free time.

I have had dozens of businesses. Most of them failed miserably. I even tried Amway. Amway is a great company and I learned a lot about using presentations to make sales. I also learned that making the sale was only the beginning. The real money came from building a relationship. In the end, the stigma of multi-level marketing was too much to overcome and I moved on to new ventures.

I also owned my own personal training company. In just a few months I managed to take over the personal training for 4 locations of a well known NY fitness club. I was making more money than the owners and even loaned them money during an especially slow summer. In the end, I didn't have contracts with the owners and they robbed me of tens of thousands of dollars. I was only 23 at the time and I learned another valuable lesson the hard way. Get your agreement in writing so there are no misunderstandings and you can collect what's owed.

I've built countless more businesses before I became successful with my own mortgage company back in 2001. Unlike my peers, I continued to invest tens of thousands of dollars a year educating myself about marketing, systems, people skills, bookkeeping, etc. That's the reason I was able to start and operate several more successful businesses even when the mortgage market came tumbling down and all the other bankers and brokers lost their shirts. I knew that if I could build it once, I could do so over and over again. That, my friend, is real security.

What I Would Do if I Were You.

Let's pretend for a moment I were in your shoes. Let's assume there is a very real chance you could be laid off. You have no money to spare, yet you need to act quickly to start generating a second income…just in case. What would I do?

1. Get your finances in order. Make a list of all your monthly debt obligations. Include the total debt and monthly payments. the primary reason you have stress is because of the items in this list. You need to keep this list handy so you know how much you need to make to get your life back. Historically, when the fed holds interest rates down this low for so long, they jump back with a vengeance. You could be looking at some ridiculously high interest rates in no time flat. Now's the time to get rid of your debt. Put that piece of paper somewhere you can see it everyday to remind you of your immediate goal.

2. Make a list of the problems you can solve. Everyone has some skills. Most people I speak with get hung up trying to figure out what kind of business to start. The question you need to ask yourself is what problems can you solve. People don't buy products and services. They buy solutions.

3. Start your business by getting your message in front of people with problems to which you can provide the solution. Don't worry about setting up corporations at the moment. Don't waste any effort. The first thing you need to do is make your first dollar. If you can make one, then you can make thousands. Take whatever work you can get for the first 2-3 months. You need to build a portfolio of clients you can use for references and referrals.

Begin by thinking like your customer. Let's say you speak Spanish and English. You can translate back and forth easily enough, so there's a problem you can solve. So where do people look for translators?  If you wanted to hire a translator, where would you look?

Personally, I love the internet. At any given moment there are a billion people searching for solutions to their problems. All you need do is get in front of them. There are even sites designed specifically for this purpose. For translation services, I would try www.craigslist.com, and www.elance.com.

Craiglist is great for posting ads, but even better for finding projects. Look for the "Gigs" section. People post ads for assistance there. All you need do is reply.

Elance.com is awesome. I hire a lot of people through Elance. I post a job and freelancers from all over the world post bids to take the job. I research their reviews and references, then make my decision. They use an escrow service, so everyone is sure they're getting what they agreed upon.

Here is a quick list of some of the freelancers I have hired through Elance:

  • Bookkeeper – if you can use QuickBooks, then you can bid. Companies send you receipts and you enter them into QB, then balance the checkbook and send reports once a month.
  • Graphic designer – If you can use Photoshop, you may get some work here. I have hired designers to make banners, headers, business cards, webpages, book covers, cd covers, etc.
  • Telemarketer – If you can speak any language in a clear and confident manner, then you are in business.
  • Translator – I have hired people to translate my articles and books into Spanish on more than one occasion.
  • Article Writer – I give them the topic and they research and write me anywhere from 400-800 w
    ords.
  • Video Creator – they used Camtasia to make me videos that were then distributed throughout the internet.
  • Voice Over – I hired someone to record a 60 second radio ad for me in their studio.

I recommend you go to the site and see what other services are being provided there. You may get some ideas you might have otherwise missed.

Here are some of the freelancers I have hired through Craiglist:

  • Photographer
  • Landscaper
  • Powerwasher
  • Handyman

Again, go check out what other services are being offered for more ideas.

4. Once you start getting some clients you can circle back around and use some of your new income to build a webpage, print business cards, form a corporation, etc. Just make sure you consult your attorney and accountant to make sure you're compliant with state laws and regulations, plus protecting yourself from excessive taxes and/or lawsuits. If you made it this far, you're going to be fine.

5. Pay off your debt. Now that your business is running you need to apply every available cent to paying off that debt. Trust me on this one. It will save your life.

What if you have NO skills?

Here's what I would do. Choose a field you would like to learn more about and apply for a job in that field. If they don't hire you, come back the next day and offer to work for free, provided they train you.

You might be thinking, "Why would I work for free? I need to make money. That's the whole point!" To which I would reply the following: YOU HAVE NO SKILLS. People go to college for years and spend hundreds of thousands of dollars to learn skills that may one day get them a job. I'm telling you to work for free in order to get those same skills. Besides, what else do you have to do that's more important than learning how to make a living?

Case Study

I have a friend who is a chef. When he first started out, after graduating from the New York Restaurant School,  he wanted to work at the best restaurant in Manhattan. He applied and was denied a job. He went to work anyway. He told the owner he would work for free until the owner felt he deserved the job. 3 months later he was getting a check, but there's more.

In the restaurant business you sit at a station for as long as it takes to master that station. A promotion involves taking another station that usually includes more responsibility.  You may have to wait years for a spot to open up, then you have to compete for it. My friend's strategy made such an impact on the owner of this restaurant that he was pushed from station to station every few months past chefs who had worked there for years.

Fast forward 3 years and my friend was chosen over a dozen more seasoned chefs to help open the first 4 star restaurant in Las Vegas. My friend now enjoys a six figure income and has dozens of opportunities available to him. He will never be without income.

So you need to ask yourself whats more important, pride or survival?

My wife and I like eating, so I would work for free if that gave me the tools I needed to put food on the table.

That said, if you are ambitious, have a strong work ethic, and enjoy helping your neighbors, then keep your eyes open. I will be sharing an opportunity to work with Score More Credit in the very near future.

Leave your comments below.

Posted in Current Affairs, Money | 1 Comment

Pay $1 For Your Credit Card Statement

Posted on January 21, 2010 by brian

Private-label credit cards for stores such as Ann Taylor and Victoria's Secret are now implementing a $1 fee if you want your credit card statement mailed to your home as of February 22nd. In order to avoid the fee, lenders want card holders to opt in for online credit card statements.

Lenders claim the new Credit CARD Act of 2009 require a number of new disclosures be included in each card statement and the extra paper is going to cost them. Watch dog groups warn that lenders will keep trying to come up with new and exciting ways to add additional fees to your bill in order to recoup some of the money the new act is causing them to lose. 

The purpose of the Credit CARD Act of 2009 is to make lending practices more transparent. Retroactive interest rate hikes and other hidden fees are a thing of the past. Lenders are expected to lose as much as $50 Billion in revenue due to the loss of their old bill padding strategies.

Offline Credit Card Statement Fees Will Hurt The Elderly The Most

Since the fees apply only if you want a physical statement in the mail its expected that the elderly who have not fully embraced all our current technology will be hit the hardest. 

Posted in Budgeting, Credit Cards, Credit Repair Ethics, Current Affairs | Leave a comment

Experian's Bluff

Posted on January 14, 2010 by brian

We've been receiving a lot of inquiries recently due to Experian's new response to disputes.

They have been replying with a letter that is worded in a legally threatening manner implying that disputing inaccuracies on your credit report or using a credit repair service is illegal and that the "authorities" may be involved.

Let me assure you this is a bluff. First, Experian refuses to let consumers purchase their FICO scores. Now they don't want to investigate inaccuracies on your credit report. The reason? People buy scores, not credit reports. When you see your score you're more inclined to dispute. That's their first strategy to stop your disputes. The letter is their second strategy. Its a scare tactic they hope will keep you from disputing again.

It is your right to dispute inaccuracies according to the Fair Credit Reporting Act. Furthermore, it is LEGAL to hire a credit repair service to dispute for you. The Credit Repair Organizations Act was implemented to protect you from credit repair scams. If credit repair was illegal, the government wouldn't have created an Act to dictate the rules a credit repair service must adhere to.

Posted in Credit Repair Results, Credit Repair Services, Credit repair | 1 Comment

Federal Reserve Posts Record Profit of $41.6 Billion

Posted on January 12, 2010 by brian

If you ever played monopoly you may recall having read in the rule book that the bank never runs out of money. Should the bank not have anymore monopoly money they can just make more out with a pen and paper as needed.

In the 1970's president Nixon took the US off the gold standard. That meant the US dollar was no longer backed by gold, but rather our debt, which we repay through taxation. When you hold a dollar bill in your hand you are really holding an IOU. That IOU is the promise of the American people to repay the debt with our taxes.

Since the US dollar is no longer backed by gold the federal reserve can authorize the printing of money without limits, in order to stimulate our economy. Just remember, they authorize the printing, but WE have to pay it back.

Did you know the federal reserve is not a government agency? Its not even an American company. It is a banking cartel made up of some of the richest families in the world. Its their way of controlling who gets rich and who stays poor. 

They authorize the printing of US dollars thereby controlling inflation, deflation, and our taxes.

Do you know how they make their money? By charging interest on the money they authorize our banks to print. Money they created out of thin air, backed by our promise to repay it.

Who do they lend money to? They lend money to banks for the purpose of increasing lending, thereby stimulating our economy.

The problem is the banks don't lend out all the money. Although lenders received billions of dollars in bailout money, they decreased lending by more than half.

So where'd the money go? When asked by the NY Times where the money went, all the major lenders, like JP Morgan Chase and AIG, declined to answer. Such headlines were closely followed by new headlines announcing multi-million dollar bonuses for the same banking executives whose bad decisions put us in this mess to begin with.

The reason I'm telling you this is that you need to realize the government isn't here to help you. The more you rely on them the worse off we'll all be. The government is in place to protect the interests of the rich people who put them in office. That's why the president could spend half a billion dollars running for office, a position that pays only $400,000 a year.

The only way out of this mess is to take responsibility for your own future. Start with a better credit rating by removing the inaccurate or unverifiable negative data from your credit report. Stop using your credit cards to make purchases you don't immediately have the money to pay off, unless its for investment purposes, meaning it will make you more money than it costs to purchase it.

Lastly, start teaching your children about money and credit from an early age. Our educational system was designed to create employees. They barely teach our children how to balance a check book, much less a spread sheet. Don't pass on this ignorance to your children. Educate yourself now and pass on the knowledge so your children won't be in a worse position when they take over.

I would highly recommend Robert Kyosaki's "Rich Dad Poor Dad" to start. Robert has a way of simplifying financial terms so that anyone can quickly grasp them. You can find him at your local library or book store. If you're like me and don't have a lot of spare time for reading, then I would recommend downloading the audio book. You can listen to it when you're driving, play it on your mp3 player, or on your computer. Download 2 free audio books online at www.Audio-BooksOnline.com.

Posted in Credit building, Current Affairs | Leave a comment

Lender Fees Exposed

Posted on December 30, 2009 by brian

So remember the CARD Act that was supposed to help protect consumers from unscrupulous lenders and all their hidden credit card fees? It seems some lenders have already found new ways to whack us over the head with additional fees. Take a look at some of their new methods for collecting more than what you had bargained for…

Interest Rate Games

  1. The CARD Act stipulates that fixed rate credit cards can't become variable cards as long as they are paid on time, but if you have a variable rate card you're in for a ride. In the past, variable rate cards were tied to the prime rate. Lenders are now adding a clause that they can use the highest prime rate in the past 90 days. That's an estimated $720M in new revenue for them, right out of consumer pockets.
  2. A second new strategy targeting those with variable interest rate cards are the new "floor" interest rates. If your card has a "floor" rate of 6% and the prime dips below 4% for 4 months, you won't benefit from the 4% prime rate as your floor rate is 6%.

Fee Games

  1. Lenders are now implementing a higher minimum finance charge. That means if you only incurred an interest charge of $4 in any given month, but their minimum finance charge is $20, then you'll have to fork over another $16.
  2. You know how you used to get hit with a $25-$45 late fee when you paid late?  Those late fees are now increasing in size in proportion to your credit balance.
  3. Think you'll avoid these charges by not using your card? Think again. Lenders are now implementing an inactivity charge. Fees vary by lender.
  4. If you travel to foreign countries you are familiar with foreign transaction charges you would incur anytime you exchanged currencies. Now you may incur these charges even if no currency is exchanged provided a foreign bank is involved.
  5. And lastly, they've removed the caps on balance transfer fees and increased the minimum charge. That means they can charge you for an entire year of interest upfront on that 0% balance transfer.

The lesson here is that lenders are rewarding those with good credit and payment history, but miss just one payment and you're in for a world of hurt. You'll be hit with a veritable tidal waive of fees that will make you wish you never applied for a credit card in the first place.

My advice? Keep just 1-2 cards with minimal balances and pay them in full each month with an automated payment plan.

Posted in Credit Cards, Credit building, Current Affairs | 1 Comment

How to Boost Your Credit Score Without Credit Repair

Posted on December 15, 2009 by brian

Removing negative items from your credit report is one technique for improving your credit score, but it's not the only technique in my tool box. I created this free video to teach you another little known insider strategy you can implement immediately to boost your score as much as 150 points in as little as 45 days.

I have used it on with many clients and have always seen fantastic results.

WARNING: Watch the entire video before taking any action. You need to understand how the strategy works before you can make a decision as to whether or not its right for you.

Posted in Credit Repair Results, Credit Repair Services, Credit building, Credit repair | Leave a comment

FICO Reveals 'Damage Points'

Posted on November 30, 2009 by brian

For the first time ever, FICO has revealed how much certain derogatory remarks can negatively effect your credit score. Conversely, we now have a more accurate idea of how much removing these items can positively effect your score.FICO damage chart

As you can see from the chart, a maxed out credit card can effect your score as little as 10 points, while a recent bankruptcy can decrease your score by as much as 240 points.  Its also interesting to note that the better your FICO score is when the negative remark is added, the more of an effect that remark will have on your score. 

FICO determined how your score would be effected by using complex mathematical algorithms compiled by tracking hundreds of thousands of consumers over a period of years. Over time they were able to determine key indicators that revealed the increasing probability that a consumer would default 90 days or more on a loan or credit.

This chart helps to illustrate how a consumer who had an otherwise flawless credit history can suddenly become a high risk borrower after a recent negative event in their credit history, while those with lower scores are more likely to be habitually poor at budgeting or making timely payments. The sudden change in behavior is a warning sign and therefore caries a higher penalty.

Posted in Credit building, Credit repair | Leave a comment