Opportunities for credit come in the mail if you are doing certain things or member of certain organizations. I have found that if you are going to school, you are a target for credit card repair companies to send you multiple offers in the mail. You are gaining an education and are going to have more money earned to pay for things than those people who do not go to school, college or university.

If you join a frequent flyer organization, even if you don’t fly very often or at all, this will put you on a list of preferred offers from credit card companies to offer you opportunities to apply for their credit cards.

Opportunities come in a wide variety with multiple interest rates, pay back plans, credit limits and penalties if late or over limit. I am finding that credit card companies put in the fine print that they can check your credit when ever they feel like it and if they see your credit score drop below a certain point, that they determine, they can increase your interest rate from that nice 6% you started with to 19, 24 or even 29%. The highest I have seen an interest rate is 33%. I suppose this could go even higher if the credit card companies can get away with it.

It would be important to compare the differences in credit cards not only for interest rates, credit limits and penalty factors, but also for rewards for purchases and length of time with the company. There are cards that give you cash back or cards that give your flight rewards. Some will give you products to choose from a catalogue. If you don’t fly much, then getting a card with flight rewards may not be the best plan for you. Get one that fits your life style and remember to get that card paid off every month or you will be paying for every penny of the “reward” you are getting rather than have it be a great asset for you by paying your card off every month.

There are horror stories of debt consolidation companies that devastated credit scores for people because of how they work. The debt consolidation company will negotiate payoffs with your creditors and the creditor will automatically and immediately close your account with the debt still owing. This hurts your credit scores several ways. The account is closed and the history is lost, the debt to credit ratio is lost due to the credit limit being reported as $0 and the amount owed still showing, etc. So, my recommendation… avoid debt consolidation companies, debt counseling services at all costs unless they do not negotiate payoffs with creditors.

If you want to negotiate a settlement there are several things you should know before you begin. Understand that the creditor will close your account and you will be hit with the same things I described above, debt to credit limit ratio through the roof and loss of credit history for that account. It is better to make the minimum payments until you can afford to get the debt paid off in full and keep the account in good standing. The only accounts you should really negotiate payoffs which would be collections or accounts already closed by the creditor. The damage is already done and paying off the debt would help your credit scores return upward. Not to the original score because you will have lates, loss of history, but your debt to credit ratio would be negated.

How the payoff is reported will also affect your credit scores. I highly recommend negotiating how it will be reported as well. Reporting as “settled” is not good but being reported as “paid in full” or “paid as agreed” or “satisfied” would then reflect a positive on that account even if there are lates and the account is closed. Remember to always get the negotiated payoff in writing and don’t make the payments until the document is in your hands and written as agreed. Then make the payment and you are done. Oh, you can even negotiate for them to remove the collection off your credit file… if you are tough enough to stick it out with them, as they will complain that they cannot do that or company policy states… etc. They can and do regularly when the stakes are high enough.

How much to negotiate is also very important. If you don’t have the money, then negotiating payments may be the only thing you can do, but always ask to reduce the payment and the amount. If you have the money to pay it off immediately then you can negotiate a payoff that could be as low as 40% of the original debt. Factors such as how big the debt is and how old the debt is will determine how much the collection company will allow to be negotiated down. The bigger the amount and the older the account, the more they will negotiate. But waiting till your collections are old to reduce a payoff is not a good thing for credit scores and establishing good credit history. You will have to decide which is more important. Personally, I recommend getting the debt paid off and having the good credit scores for negotiating better interest rates to save money in the future.

However, there is another, alternative solution.  This involves a group of attorneys that do credit law, only credit law license repair and for over 24 years.  By having them work for you, they will attack the collection companies, and the credit bureaus for you and get the negatives off  your credit report, thus improving your credit scores and giving you back your freedom.  Check out National Credit Federation at http://www.VantageCA.com to see for yourself what they can do.  With an average 127 point increase in just 4 to 6 months… you can get your freedom back and start living life again.  Check it out today.

PS – They can also negotiate settlements down to 9 to 12 cents on the dollar.

It was just 20 years ago that thousands of low profile “local” bureaus handled all the consumer credit records. Now, the data of 215 million Americans are controlled by the three remaining companies that gobbled up all these local bureaus.

Publicly traded Equifax, founded in 1898 by a Tennessee grocer who sold his customers’ payment records to other shopkeepers, now calls itself a “global leader in information solutions” with businesses as diverse as risk detection and database management. (According to its income statements, its consumer data unit remains its most profitable, boasting a 40 percent pretax profit margin.) The smallest, Chicago-based TransUnion, is owned by the Pritzker family who control the Hyatt hotel fortune and boasts credit-reporting operations in 25 countries. Experian, the largest of the three is a $4 billion company, based in Ireland, that uses consumer data to help businesses send more than 20 billion pieces of junk mail every year.

Together, the three credit bureaus have amassed a spotty record on consumer care. In 2000 they jointly paid a $2.5 million Federal Trade Commission fine for blocking millions of phone calls from consumers. Three years later Equifax paid a second fine because it still hadn’t hired enough people to answer the phone. In 2005, after new federal laws forced the bureaus to give away credit reports online, Experian was hit with a $950,000 FTC fine for marketing those reports through a Web site that automatically charged consumers for an $80 credit-monitoring service. Last year TransUnion agreed to pay $75 million to settle a class-action lawsuit over sales of consumer data for marketing purposes.

The bureaus, which never admitted wrongdoing in these cases do admit that credit-report errors can stem from glitches in their own systems. Some mistakes occur thanks to the algorithms used to match loans to individual credit reports. If the name or Social Security number on another person’s account partially matches the data on your file, the computer might attach it to your record.

Problems can happen in the gathering of tax lien and bankruptcy data due to the contractors employed that can transpose digits or misread documents they get from the courthouses and government offices.

But perhaps the scariest fact of all is the credit bureaus own admission that even if they never made mistakes of their own, they can’t possibly patrol the accuracy of the 3.5 billion pieces of account information they receive every month from lenders.

To put this in proper prospective, to help grasp the enormity of this system you’ll find three publicly traded companies, the smallest TransUnion generating 1.628 Billion in sales, Equifax generating 1.935 Billion in sales and Experian with a whooping 4.130 Billion in sales. The fining of Equifax $950,000 is like fining a person making $50,000 about $25, almost laughable! TransUnion getting hit $75 million is that same $50,000 being fined about $2303 more painful but hardly a deterrent to stop the sales practices they embrace.

The credit bureaus are looking for sales, sales of your most private information to other companies. They have neither the personnel or the policing systems in place to prevent errors, half truths and untruths to be told about you. The FTC is not active nor are they forceful enough to stop these abuses.

As all things in life it is the responsibility of you as the consumer to fight for your rights!

Be Bold!

Herschel

Did you know the credit card companies’ rules are changing?

Credit card companies have always had tricks for capturing fees and extra interest from the unknowing card user. Recently, legislation was passed on how credit card companies handle the hikes in interest rates and fees. Much to the credit card industries dissatisfaction, big changes are coming!

Let’s take a look at how these can effect you.

Credit card companies will now have to give cardholders forty-five days notice before their interest rates are raised. What does this mean? Well, those days of opening your statement and seeing interest rates jacked up 5 or 10 or 15% and more because of you being one day late are over! Now, if there is a rate hike you’ll have time to pay off or transfer the balance to another card before getting cracked on the wrist, or rather dinged in the wallet, for being late. 

Banks are now required to mail your credit card statements no later than twenty-one days before they are due. In the past, some credit cards standard operating procedure was to send their statements just a few days before they were due. Why? It’s all about money! A late charge here or a late charge there throughout the year, and you’ve added an extra $100 or $200 to the credit card companies coffers. Multiply that, by a few million cardholders and suddenly late charges are an income on their profit and loss statement that will make your head spin!

These same credit card companies try and tell you that this is not their intent. Believe me, this 21 day change alone will cost them millions in unjust charges and save you perhaps hundreds of dollars a year just because they give you ample time to mail your payment in.

Speaking of late fees, if you get your payments in by 5PM on the due date you will no longer incur a late charge. This eliminates that 12:01 AM deadline joke! This is something I never understood. Why have a deadline, of let’s say the 25^th of the month at 12:01 AM? If you want it in at midnight then just say the deadline is the 24^th. In addition, if the deadline falls on a holiday or a Sunday when the bank is closed the new law allows your payment to be processed the following day without incurring a late charge.

Another big change in the new law is to credit your payments to the balance with the highest interest rate rather than the balance with lower interest rate. In the past it was common practice if you owed say $5000 of which $2500 were misc charges at 8% and another $2500 was cash advance at 18%, to post your payment to the balance at 8% interest. This would mean your overall balance would be charged at the higher rate, thus it became much more difficult to pay off.

In addition, on cash advances the banks require your explicit permission in order to go over your providian automatic credit limit increase. This means no more check postings that you would be hit for an “over credit limit” charge which could also trigger a hike in the interest rate.

Overall, these changes will make it harder for the credit card companies to hold you in financial bondage by hindering your ability to pay off your accrued debts.  Keep in mind that this doesn’t mean you’re in the clear. You still need to be a good money steward, staying within your budget and making your payments in a timely manner. 

Be bold!