MYTH - YOU CAN EASILY CHALLENGE NEGATIVE ITEMS YOURSELF

Disputing a credit report is easy.Obtaining results from the credit bureaus as a layperson is amazingly difficult, complex, and infuriating. The Federal Trade Commission receives more complaints against credit bureaus than any other type of business. In February 2000 the 3 major credit bureaus paid a fine of 2 ½ million dollars for ignoring consumers requesting information regarding their file. Remember the credit bureaus are primarily interested in protecting their profits. Investigating consumer disputes consumes these profits. Short of sparking a mass number of lawsuits, the bureaus do everything in their power to impede your progress with credit restoration. Restoring your own credit is like repairing your own transmission or representing yourself in court; it is possible, but you have to be willing to invest the time to learn the processes, assume the risks of your inexperience and realize that it will probably take you longer and you probably will be less effective than a professional.

The Jury Scam is Back!!!

The jury duty scam is back.
A federal fraud alert this week warns people about callers who say they are officers of the court with a warrant for your arrest.
Here’s how it goes: A caller says you failed to show up for jury duty after receiving a summons. But you can clear it up by providing personal information, such as your Social Security number and birth date.
The real motive is identity theft, a so-called “phishing” scam, according to the FBI, which last warned about the scam in 2006 when it hit many states. The thieves can even spoof your caller ID with a real court telephone number.
Real court officers who need personal information communicate via the U.S. mail, not phone, the FBI noted.
If someone you do not know calls you and asks for personal information, do not give it to them.  This would include a collections agent.  Never give this information out over the phone.  Period.  If the person on the other end of the phone harasses you or gets upset, too bad.

Myth # 2 - If a negative item is successfully deleted from my credit report, it will just come right back on my report.

The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have not heard from the credit grantor for 30 days since an item has been disputed. Should the credit grantor submit verification a week or two later, it will be re-inserted. Most of the time the creditor simply fails to respond and the negative item is permanently deleted. If the creditor verifies the item the account may still be deleted later in the process as the challenging process is intensified.

There are Requirements Relating to Reinsertion of Previously Deleted Material as provided by the FCRA.

If any information is deleted from a consumer's the information may not be reinserted in the file by the CREDIT BUREAUS unless the person who furnishes the information certifies that the information is complete and accurate.

The bureaus must notify the consumer of the reinsertion in writing not later than 5 business days after the reinsertion.

A credit bureau shall provide to the consumer in writing not later than 5 business days after the date of the reinsertion

A statement that the disputed information has been reinserted;

the business name and address of any furnisher of information contacted and the telephone number of such furnisher

A notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the disputed information.

CREDIT MYTHS

MYTHS

Myth # 1 - When I pay off a past-due account, such as a charge off or a collection account, it will show “paid” and no longer be negative.

It is difficult to fully restore your credit without paying your outstanding debts, however we have been doing it for years. Paying off a debt can actually hurt your credit. Negative items on your credit report are allowed to stay on your credit report for a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. This 7 or 10-year clock begins ticking at the date of last activity. Making a payment represents new activity and restarts the clock.

When paying an outstanding debt, you will change the account status to paid collection, paid charge off, satisfied judgment, or paid ‘was xxx days late”. This is still considered very negative and appears as though you had to be strong-armed by the credit bureau to pay the account.

 It is almost always prudent to have a professional help so as to not further damage your credit by trying to do the right thing.

One of the options we use is the “Pay for Delete” letter.  Many times the creditor will delete the item if you pay them off.  But you have to be very, very careful and do it the right way.

Lies, Damn Lies and Credit Scoring Needed for Auto Insurance

I am often asked what other industries use Credit scoring besides the Mortgage Industry.  The answer is:

                Auto Industry

                Apartment Rental

                Security Clearances for the Military

                Employment

                Insurance

People are flabbergasted when they hear about Employment and Insurance.  I am going to deal with the Insurance Industry in this writing.

I just applied for Auto insurance through a very large carrier – I will not tell you their name, but their spokesperson is a Gecko.  I had to provide my Social Security Number and I inquired why would they need that.  I played dumb in asking that question (and if you know me at all, you know I can play dumb very well – most times I do not have to play it at all).  In their response, here is what they sent me:

Why does LEAPING LIZARDS need my credit information?

LEAPING LIZARDS, like many property and casualty insurers, uses information collected from consumer reporting agencies such as your driving record, credit and claims history in order to offer you the most appropriate rate.

At LEAPING LIZARDS we understand the importance of your privacy. The information that we obtain will be kept confidential, secure and will not be sold or redistributed..

Frequently Asked Questions

What is a credit-based insurance score? Why does LEAPING LIZARDS use them?

An insurance score uses information from your credit report to predict how often you are likely to file a claim and/or how expensive those claims will be. LEAPING LIZARDS uses information collected from consumer reporting agencies such as your driving record, credit and claims history in order to offer you the most appropriate rate.

No one at LEAPING LIZARDS actually sees your credit report. The insurance score takes into consideration specific things like payment history, collections, and length of credit history and credit utilization.

What is the difference between insurance score and credit score?

The insurance score predicts the likelihood of a future loss of an individual insurance policyholder or applicant; a credit score on the other hand, predicts the likelihood of future delinquency on credit accounts of a credit prospect or customer.

What does my credit history have to do with how I drive my car?

Having a good insurance score does not necessarily mean you are a good driver. However, research has shown that consumers with better insurance scores generally file fewer claims and have lower insurance losses. That is not to say that all people with low insurance scores are higher risks.

How does my insurance score affect my LEAPING LIZARDS policy?

LEAPING LIZARDS only uses insurance scores when you request an initial rate quote, and we only order insurance scores for the named insured. When you contact LEAPING LIZARDS, we collect information about you including your personal information (like name, address, and date of birth), information about other people who drive your car, the driving history of each driver, and the number and types of cars you drive. Your insurance score is only one part of our underwriting process. You will never be denied a LEAPING LIZARDS policy solely because of your insurance score.

Why do you use this information to decide what my premium will be?

All insurance companies base their premiums on how likely it is that a person will have an accident. Credit history, in conjunction with other factors including driving record, driving habits, type of car, etc., are used to determine the most appropriate rate.

Do I have any rights if my credit history affects my rate or eligibility for insurance?

Absolutely. If LEAPING LIZARDS has taken an adverse action against you (such as offering you a higher rate) as the result of information contained in your credit report, you may obtain a copy of your credit report free of charge. If you believe there are errors in the report, you should immediately notify the consumer reporting agency they are required to promptly correct errors.

What personal information does not impact your insurance score?

The following information is NOT used in any insurance score models: Income, Ethnic Group, Religion, Gender, Address, Marital Status, and Nationality.

What do I do if the credit report is wrong?

Contact the consumer reporting agency directly and notify them of any discrepancy. Once they change it in their records, come back to LEAPING LIZARDS and we will be happy to re-evaluate your quote.

What happens if I have a special circumstance that has negatively impacted my credit history?

If your credit history has been impacted by an extraordinary event such as a medical crisis, temporary loss of employment, the death of a spouse or a household member, identity theft, the personal guaranty of a business loan or a catastrophic event we will take the special circumstance into consideration and ensure that it does not negatively impact your rate. We may require you to provide documentation of the special circumstance.

What did the Credit Report say?

In order to maintain confidentiality we do not see the actual report. We receive an insurance score that relates a person’s credit history to the likelihood of having an automobile accident.

Which are the three major credit bureaus in the US?

They are Experian, Equifax and TransUnion. Each bureau collects information on your accounts and payment habits from individual creditors. Some creditors report information to all three credit bureaus, while others may only report to one bureau.

There you have it:  straight from the Reptiles’ mouth.  This information is full of sugarcoating and outright lies, IMHO.  There are 3 types of lies:  Lies, damn lies and Statistics.  This industry is, in my opinion full of all three.