When death of a loved one takes place we all are under great remorse. To make matters worse the FTC is currently taking comments on how debt collectors can go about collecting a debt from bereaved.

Under the FDCPA there are laws in place to protect you and your family. The problem is some of these collection companies don’t adhere to those laws and end up harassing people to collect a debt.

Currently under the FDCPA debt collectors are only allowed to collect debts from the debtor or a cosigner. This law strictly prohibits debt collectors from calling neighbors, friends, or family members except to obtain contact information.

This new proposed law could open the door to debt collectors to poke and prod grieving family members and friends into thinking they owe something they really don’t.

According the Star Tribune of Minneapolis creditors such as JP Morgan, Nordstrom, Citigroup, Chase, and Discover financial service currently employ specialists that solely try to collect on the deceased.

Under this new proposal the FTC will not take law enforcement action from anyone alleging that a debt collector violated the FDCPA by communicating about the descendant’s debts with a spouse, executor of an estate or anyone else that is authorized to pay debts from the descendant’s estate.

So in a nut shell this new provision to the FDCPA could open all kinds of issues. We all know that debt collectors buy these debts for pennies on the dollar. The people they hire are commission based and have all the incentive in the world to collect.

Robert Hobbs an attorney and collections expert at the NCLC encourages consumers to go to the FTC and make comments on this new provision to the FDCPA, especially those who recently have been targeted by debt collectors on behalf of a deceased friend or family member. This comment session has been extended to December 1st 2010.

Author: Mike Clover
CreditScoreQuick.com

Rapid rescoring is a process that I have talked about before. This tool is used within the lending community. A rapid rescore is the process of forcing an update on your credit report after you have paid down a credit card, settled on a collection or paid off a debt. Rapid rescoring is used when you are trying to get a loan and run into a snag due to credit issues on your credit report.

A professional loan officer will review your credit report. Once he/she has determined what you need to do to get your score up, you take action.  You will need to get documentation from the creditor that you have either settled/paid a collection, paid down a debt or paid off a debt. This information is sent to a 3^rd party credit reporting company that the lender uses. This credit reporting company will then go directly to the credit bureaus and force an update on your credit report.

Take note that when you take action with a creditor you will need documentation of this action. For example account numbers need to match and so does the creditors name. If this information does not match or make sense, the credit bureau will reject the rapid update.

This process normally can take up to 5 business days. Rapid rescoring is a great way to get the score you need to qualify for a loan in this tough lending market. I have seen credit scores go up as much as 30 points or so in one round of rapid rescoring. I have used this process many times over the years and got the results we needed.

Also be aware there is no guarantee this will work every time. We do however use a tool called credit expert that will give what if scenarios. This is risk based calculation software that will determine what your score will be if you take certain actions. This software actually is pretty accurate but in some cases did not produce the results we needed.

There is a cost associated with this entire process. So when you do this service expect cost to be involved. The cost will vary from lender to lender. Typically there will be a $15 fee for each trade line with each bureau. One update with a creditor could cost you $45.

Here is a good interview by John Ulzheimer on this process with CBS New York. I thought I would elaborate on what he already said in this interview….

Author: Mike Clover
CreditScoreQuick.com

If you are a mortgage broker you are quite aware the government has made Broker shops the bad guy. The government and big banks blame brokers for all the fraud and bad loans that took place.The most interesting fact about all of this is the banks, Freddie Mac and Fannie Mae were setting the underwriting standards.  Brokers just delivered those underwriting standards and the loans were bought and sold on the secondary market. To this day I have not figured out why Brokers have been so heavily targeted other than big banks making deals with Washington to squeeze out the competition.

As a result of all of these issues tough regulations have been forced on Mortgage Brokers. All loan officers now need to pass a national exam along with a state exam under the SAFE Act of 2008. This new regulation requires a background check along with your local state regulator receiving a copy of your credit report. This new credit report requirement has caused anxiety within the loan officer community This concern comes with good reason. Most loan officer’s income starting in 2007 went from a 6 digit income to an income that was just above poverty level.

We are not completely sure how many credit issues on your report will cause a denial of your license. Each state regulator will be responsible for reviewing your credit report and determining how responsible you are with your finances. According the State of Texas Commissioner multiple issues of following will trigger a state review of your credit report.

• Bankruptcies files within the last 10 years;

• Current outstanding judgments (except judgments solely as a result of medical expenses);

• Current outstanding tax liens or other government liens

• History of and current collection accounts;

• Foreclosures within the past three years;

• Three or more accounts more than 90 days past due;

• Multiple Social Security Numbers attached to the individuals name;

• Consumer provided comments

• No credit history for the individual;

• Credit items the individual is appealing, if noted in the report; and

• Outstanding child support

Also according to the commissioner they will not be looking at your credit score, but systematically looking at your overall long term financial irresponsibility before they make a final decision.

The guys over at ThinkBigWorkSmall did a video today on this very subject. They give a very humorous illustration of this credit report scare. So this should be very interesting considering how many possible loan officers have credit issues due to the market and not because of irresponsibility.

Author: Mike Clover

CreditScoreQuick.com

Every day you get home from work and, if you’re like me, you check your mail.  It’s certainly no surprise to see your box full of credit card offers but have you ever wondered exactly why and how those offers find you?  You might be shocked to learn that the credit reporting agencies sell your name and address to credit card issuers and that’s why your mailbox is filling up with those offers.

Credit card issuers are constantly looking to acquire new credit card customers.  They do so by buying a list of consumer names who have met predetermined criteria, such as decent credit scores and no active bankruptcies.  Imagine the following request made by a credit card company to any of the three credit bureaus.

“I’d like to solicit a new credit card to consumers living in these five states and have FICO scores of at least 680.  I want 3 million names and addresses of consumers who meet that criteria.  I also want these consumers to have no bankruptcies on their credit reports and no defaulted credit cards for the past 36 months.”

This is a simplistic example of how your name makes it on their pre-approval lists.  Once your name and address has been delivered to the credit card issuer it’s only a matter of time before their offer finds its way to your mailbox.  You can have your name removed from their lists by going to www.optoutprescreen.com and begin to enjoy a lighter mail load.

John Ulzheimer is the President of Consumer Education for Credit.com and owner of  2StepCredit.com.  He is an expert on credit reporting, credit scoring, credit score ratings, and identity theft. Formerly of FICO and Equifax, John is the only recognized credit expert who actually comes from the credit industry.  He is a weekly guest on FOX’s The Willis Report and is the credit blogger for the New York Times and Mint.com.  He has served as a credit expert witness in more than 65 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit.

Have you ever wondered what will happen to your credit scores and credit reports once you are married? There are all kinds of credit myths out there as a result of couple’s becoming married. Fortunately these myths are nothing but myths. Here are the top five misconceptions about married credit scores and credit reports.

Marriage will cause my credit scores to drop- It is very common for newly weds to acquire huge credit card debt to pay for weddings and a honeymoon. The act of increasing credit card debt will lower your credit scores but the act of getting married does not merge your credit reports nor does it affect your scores. So bottom line, getting married will not lower your credit scores unless you rack up a lot of credit card debt.

I will automatically be added to my spouse’s credit cards – This simply is not true. You will not be added to your spouse’s credit card unless you call the creditor to be added. With some loans types you cannot be added to the loan unless a refinance takes place. Being added as co-signer can help your credit scores especially if you don’t have any credit. You will need to make sure your payments are made onetime and the credit utilization is low.

Changing my last name erases my credit history – When your last name changes make sure you report this change to your creditors. During this process you will see some updates to your existing credit reports. For example you will see your new name as an alias with your old last name. While all this name change is taking place it is important to check your credit report regularly. You will not need to rebuild your credit as your credit will be attached to your new name and primarily you’re social security number. There could be some inaccuracies during this process so make sure you stay on top of your report.

Our credit reports will merge together – While getting married the only debts that will merge are the debts you jointly acquire. Like I mentioned earlier, you can also merge your credit by being added as a cosigner. Your social security numbers don’t merge together when getting married and nor does your credit reports.

My spouse’s credit scores will affect my scores – this concern is very common for those about to get married. Luckily your spouse’s credit history has no affect on your credit rating. Only when you open joint accounts will your credit profile become a factor. Your spouse’s credit scores will however affect your ability to get a mortgage. If your significant other has credit issues, tackle that issue together so you can get good rates and terms on loans.

With all of this being said enjoy being married and remember your Credit is a big part of your life.

Author: Mike Clover

CreditScoreQuick.com

Halloween is tomorrow and I personally think it’s such a wonderful time of the year. It’s not too hot or too cold. The trees are changing different colors of orange, yellow and red. Everyone has their pumpkins out in the front lawn and the kids are geared up for the candy they will receive from trick or treating.

It’s time to start reflecting on what you have accomplished this year and to set new goals for the upcoming year. October is a great time to start assessing your budget and your credit scores. Our website is in the process of creating free budgeting and investment software that you simply just plug in the numbers. This new software that we are creating will display easy to understand graphs to show where your money is going and how much you could potentially save. So stay tuned for this easy to use free budgeting software.

In regards to your credit check, under the (FACTA) Fair and Accurate Credit Transactions Act of December 4, 2003 you are entitled to a free credit report every 12 months from annualcreditreport.com with each of the national credit bureaus. Now this free government website does not provide your credit scores for free, but you can get your credit report with each credit bureau to check for any issues. If you are interested in getting your consumer credit scores you can buy them through the government site as well.

Hopefully when you pull your credit report you will not be frightened by the credit report goblin or credit score monster. When you don’t stay on top of your credit those little credit goblins can show up on your report.

This is a common problem that can be avoided with better credit management. According to the Federal Reserve roughly 79% of credit reports have inaccuracies on them. So don’t hesitate and take the Halloween plunge… Get your free credit report today. Also make sure you set down tonight and make a budget. Sometimes overspending or a lack of budgeting can cause those little credit monsters to show up on your report.

I wish everyone a Happy Halloween and encourage everyone to avoid those dreadful credit goblins with better credit awareness. Avoid getting credit booed!

Author: Mike Clover

CreditScoreQuick.com

There are some situations where your spouse’s credit scores will affect your rates & terms on loans. In some scenarios a spouses bad credit score could affect you getting a loan period. This means you cannot always hide your partners past or current credit issues.

Let’s assume you just got married. A house purchase is on the table. Well depending on your circumstances most will apply for a mortgage jointly. This means that both of you will have your credit report and credit scores pulled. All banks will look at the lowest credit score to determine the approval along with the overall credit picture. So if you have a low credit score and bad credit history your loan just went down to China Town…..

Some mortgage loan types such as FHA and VA require that both spouses have their credit reports pulled. Government loans look at both parties debts. That is why they require both credit reports to be pulled. In some cases where you need both incomes to qualify a bad credit score will cause qualifying issues or even a denial. Take note government loans during some circumstances will only look at your debt if your income is not being used for the loan. This is called a non-qualifying spouse scenario. This type of loan is where one spouse’s income is being used for qualifying, but both parties’ debts are used in this process.

The first thing creditors look at is your credit score. A low credit score will cause higher rates and terms for both spouses even though one spouse may have a 740 credit score. This is where matters get tricky while applying for loans.

So if you thought you could hide those bad credit scores and ride the coat tail of your spouse, think again… A spouse’s bad credit will catch up with you one way or the other and will ultimately cost you unnecessary money.

You are better off taking care of any credit issues on your credit report yourself. You can use our “Do it yourself credit repair guide”, to avoid costly and unnecessary credit repair companies.

If you know you have credit issues and are concerned it might affect you and your spouse, get busy right away…..the clock is ticking…

Mike Clover

CreditScoreQuick.com

Most of the wealthy in this country either own a business or run one. Whether they are selling shoes, cars, jewelry, or perfume, they need a buyer to make money. Most of these entrepreneurs spend billions to entice you to buy their product. With TV, internet, and radio a company can get a product in front of millions.

These ads will have all kinds of reasons why you should buy what they are selling. Most of these companies are masters at selling bliss. That feeling you get when you meet the most beautiful person you have ever seen. A matter of fact you probably see this type of person in their ads.

Maybe you recently saw the Chase Sapphire credit card commercial where they are really living it up on credit, with the background music “Call Me”. Heck every time I see that commercial I want to go skiing….of course that is what Chase hopes you will do. Did you notice the lady with the new dress? My wife wants that dress…..

Folks, this is why we have debt issues in this country.These companies have commercials down to a science. A good advertisement is one that generates a feeling of bliss that will cause those inner emotions to boil.

Do you really think “The Rich Man Next Door” runs out and buys this stuff? The answer is no…

Media advertising is big business because it works. Companies spend billions on the psychology behind what drives you and I to buy something we really don’t need.

The next time an ad comes across your screen and you get that feeling of bliss, remember you could be making your neighbor richer.

When you and I stay in debt, “the rich just get richer.”

Author: Mike Clover

CreditScoreQuick.com

I received an email just this morning asking what to do with unused credit cards.  The consumer has $160,000 in available credit in total and has a $5,000 balance across her cards.  The math tells me that she is about 3% utilized, which is great for her FICO scores.  Her question was whether or not she could afford to close down some of those cards and still maintain her good scores.  The answer to her question is certainly yes.  If she closed down $60,000 worth of her cards she’d still be at 5% utilization (balance divided by limits).  But my question to her was “why?”  Do you want to close them for fear of ID theft?  If so, did you know that the law caps your liability at $50 and most issuers will waive even that amount?  Do you want to close them for fear that you’ll lose control and run up a bunch of debt?  If so, shred them.

I realize this sounds absurd to suggest that someone with $160,000 in credit limits keep them open for the sake of your credit scores.  But, the world of credit scoring has rules.  And the rules state that having a lot of available credit indicates that you’re low risk, and your score will benefit as a result.

John Ulzheimer is the President of Consumer Education for Credit.com and owner of  2StepCredit.com.  He is an expert on credit reporting, credit scoring, credit score ratings, and identity theft. Formerly of FICO and Equifax, John is the only recognized credit expert who actually comes from the credit industry.  He is a weekly guest on FOX’s The Willis Report and is the credit blogger for the New York Times and Mint.com.  He has served as a credit expert witness in more than 65 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit.

There are all types of headlines about the various states putting a stop on foreclosures currently. So there is no surprise this is going on while the various banks are being investigated in regards to their foreclosure paperwork process.

A warning was released today by the FTC that no matter what you hear on the news or web; don’t ignore a notice from your bank, mortgage servicer, or a sheriff requiring your immediate attention

The FTC states that this current freeze does not mean proceedings on your home will stop. This current freeze does not make your current foreclosure proceedings immune from moving forward.

If you get a notice in regards to your mortgage, don’t ignore it. Make sure you call the bank, your servicer or sheriff quickly.

So basically this current freeze is not a free pass to ignore any notices you are getting from your current bank. Obviously this applies only to those who are on the brink of foreclosure or have received documentation that foreclosure proceedings have been started.

Also there are lots of good government resources to get in touch with if you are heading down this path in some way. Make sure you avoid foreclosure scams. HUD has a website with all types of useful links to get help and counseling.

HUD’s Avoid Foreclosure site:

http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure

Author: Mike Clover

CreditScoreQuick.com