Good-Will Intervention-Asking Nicely will Help Improve your Credit.
Your Credit Minute Show Notes:
00:00 What’s up guys? This is Nik Tsoukales with Key Credit Repair. Today we’re going to talk about something a little outside of the box, something a lot of people really aren’t talking about in the credit repair field, um, and it really is a creative way to help you start repairing your credit. Okay?
00:15 So, obviously, we get the question a lot. “Late payments. Late payments. What do I do with my late payments? I can’t get them off. I can’t get them removed.” Um, well there is a way to get this done. Okay? Keep in mind, one of those ways is by challenging the data. Okay? Is it verifiable? Is it accurate? If it’s not, it’s gotta go. Okay? Being persistent with your attempt at getting these things removed when they can’t be verified, when it’s garbage. Okay? The item shouldn’t be on your credit report.
00:44 Well, let’s say, you’ve have some siter, some sort of minor blip with a company. Okay? They placed the late payment on your credit report, but really is more for technical reasons that it was late. Maybe one of their systems wasn’t working, but the account did, in fact, go late. You don’t have much you can necessarily challenge. Well, what do you do then? Okay. The, we got a question, actually, yesterday from a client who’s dealing with some student loans in this way. Where there’s really more of a technical issue that created the lates.
01:09 The lates were, in fact, lates. Okay? The money didn’t get to them on time. But really, should that affect their credibility? And that was kind of a question mark? Um, also, this outright disputing the account really hasn’t worked, um, for this client. They’ve actually attempted to do it themselves. And they wondered what is a plan B? And that’s what I want to lay out for you guys, which is something, again, a little outside the box. Okay?
01:35 And what we’re going to talk about here is something called a good will intervention. Okay. We are taught to fight, we are taught to never surrender, we are taught to go after the big, bad credit agencies and our creditors. We’re taught to take ’em down, right? But you don’t always have to. Sometimes, you can actually ask nicely. Okay? If you’ve had a really good run with a creditor, um, a bank, a lender, everything’s been going well, but because of some sort of technical issue or something really in the gray, a late was incurred, okay, you don’t necessarily need to challenge their record. What you can do is you can challenge the creditor to be nice to you, in the form of something called a good will intervention.
02:22 And what a good will intervention really is, asking the creditor to remove the late out of their good will. Okay? Understanding that the issue was really technical and has nothing to do with your credibility. Okay. This is an option in the way we help clients all the time, when the late isn’t something they really agree with, but it’s not necessarily black and white. Where instead of just challenging the record, disputing it outright, when that’s really not the way to do it, um, we’re asking the creditor politely, “Hey, can you make this adjustment? This didn’t, in fact, uh, uh, really feel like it should be a late payment, and it’s something that’s really fallen into a gray area.”
02:57 So a good will intervention is a great way to approach this. And it’s extremely effective. And, if a company’s doing really good business with you, okay, and you’ve been a client of theirs for a long, long time, they’re really going to want to help expedite you. They’re really going to want to help, uh, accommodate you when, uh, when a mistake like this happens, from whether it’s their fault or yours, long as your in agreeance that you were, uh, actually, in fact, able to make that payment, um, and that there is not effect in terms of credibility here.
03:25 So good will intervention is going to be the way to go, guys. There’s a lot that goes into this, so keep in mind, something you definitely want to speak to one of our credit experts about. I really wouldn’t go at this specific approach alone, okay? Letters gotta be written a certain way, um, you want to appeal to them a certain way, so I would definitely, um, this is not one of those do-it-yourselfer tips. I would reach out to one of our credit experts. You can click on one of the links below. There’s probably a few consultation link below, or learn more link below, if this is on Facebook. Or you can check us out at keycreditrepair.com\freeconsultation. Give us a call. Ask specifically about the approach with the good will intervention, and we’ll discuss it with you and see if that’s actually something, uh, that is an option for you. Because we don’t want to just start doing this stuff blind.
04:11 Guys, this is Nik Tsoukales with Key Credit Repair. Have a great day.
Car Shopping-Why do I have so many inquires?
Your Credit Minute Show Notes:
00:00 YouTubers, what’s up? This is Nik Tsoukales with Key Credit Repair. Guys, awesome question of the day, super duper popular question, so if you’re wondering about this, I’m going to break it down for you. So, the question of the day is: Why is it when I go for a car loan, I end up with dozens of inquiries although I only went to one dealership, one finance manager, one place, okay? The reason for that, really, is, um, um, in most cases, it’s, uh, it’s your credit, okay? So, let’s say the dealership is, uh, Toyota, okay? You went to an official Toyota dealership and you’re expecting them to run the financing option through Toyota Financial, but you can’t get approved because of a credit issue, okay? All of a sudden, the dealer, uh, needs to shop that deal around, okay?
00:45 So, typically what they’re going to do is they’re going to take that application and they’re going to submit it to a bunch of different, uh, lenders. They’re going to submit it to credits unions. They’re going to submit it to, um, car loan companies. They’re going to submit it to Chase, this company, that company, um, and they’re going to shop that deal for you just like a mortgage broker would shop the deal for you, okay? And what’s going to happen, each of those companies, in order to give you a proper quote, uh, in order to give you an accurate, uh, rate, what they’re going to do is they’re going to pull credit within their own automated underwriting systems, um, and if it’s approved, obviously they’re going to issue that approval, okay?
01:20 Uh, when this happens, you can get, you know, you can get five increase, maybe even a dozen increase. It really depends on how many banks the lender has submitted that application to. There is software now as well that will actually do that- that submission to multiple lenders at the same time, so sometimes it’s literally just the finance manager clicking one button in their, uh, in their software that submits it to all those banks. Now, here’s the good thing, okay? I know you’re scared now. You’re scared to go to the car dealership, okay? But, just like always with inquiries, we’re going to turn that frown upside down, okay?
01:55 Let’s actually talk about why this is no big deal, okay? It’s no big deal because FICO has stated that multiple similar inquiries for the same purpose have no adverse effect on their credit score. Why? Because they know you’re shopping for a deal. You’re, quote/unquote, rate shopping, so those multiple inquiries from that car dealership or that home lender or whoever’s shopping a deal for you with various banks, that those inquiries are going to be counted as one inquiry, okay? It’s not going to hurt your credit score.
02:27 Now, if you do this once a month for the next year, that could cause some adverse actions in your credit score [inaudible 00:02:33] because there’s a perception at that point that you could be a flight risk of getting some weird financing or doing something funny. Um, but regular car shopping, guys, there’s no drop to your, uh, credit score. Shop around, get the best deal, let the car dealership, uh, do its thing. Thanks, guys. Nik Tsoukales with the Key Credit Repair. Click below to learn more and to find out more about our company. Thanks, guys.
Should I file for bankruptcy?
Your Credit Minute Show Notes:
00:00 What’s up, everybody? This is Nik Tsoukales with Key Credit Repair. Today, we’re gonna talk about a word that has a super negative association, a word that people don’t really want to talk about, and that’s gonna be ‘bankruptcy’. Okay, so we get the question all the time: should I file for bankruptcy? And obviously for the sake of fair disclosure, we have to tell you we are not attorneys, we are not bankruptcy attorneys. What we are is credit repair specialists, but there are some very simple things to consider when you’re, uh, thinking of doing a bankruptcy, okay?
00:29 First of all, let’s talk about what a bankruptcy is guys, okay? So sometimes, we just use this one word, ‘bankruptcy’, but there’s, there’s more that goes into this. Okay, if you actually look up ‘bankruptcy’ in the federal court system, you’re gonna see what a bankruptcy is, is a protection, okay? So, the full phrase is gonna be ‘bankruptcy protection’, and what it is, is you getting protection from creditors when your finances have gone a little out of whack, okay? Recently, you’ve probably seen 50 Cent, a guy who’s worth, uh … You know, he’s been on the Forbes list of over $100 million and he had to file for bankruptcy. How does this actually happen and why should this happen?
01:12 Well, there are a couple of different types of bankruptcies, okay, and I’ll give you the pros and cons of both, and a couple of different super simple ways of thinking about this and approaching them, okay? So personally, you have Chapter 7 as an option and Chapter 13 as an option, and these are probably the two most common bankruptcy. Chapter 7 is really a full discharge of all of your debt. So, you can’t afford your debt, you’re falling on hard times, and what happens is you go to a, um … You go to your local bankruptcy attorney, they’re gonna file a petition in bankruptcy court, they’re going to get you protection from those creditors, from those creditors harassing you, okay, and then the judge is going to approve wiping out all of those steps. Those creditors will charge off those debts. They won’t get any payment from you, okay, and you’re gonna get a clean slate financially.
02:03 Now, that doesn’t mean you’re necessarily gonna get a clean slate in terms of your credit. Keep in mind that a bankruptcy is a ten-year mark, okay? Ten years and any time you apply for something, they’re gonna ask you, “Have you, uh, filed for bankruptcy in the last ten years?” It’s quite common. I mean, even if it doesn’t come up on your credit report, most applications are gonna have a little checkbox. Keep in mind, even if it doesn’t come up on a credit report, it does come up on a public records search because a Chapter 7, a Chapter 13, any sort of bankruptcy is a public filing. That information is accessible by the public, okay? It doesn’t mean they’re putting that information on a billboard. No one’s to see it. (laughs) But, it is there in the court’s records, okay?
02:45 The second type of bankruptcy that is extremely common is Chapter 13, and one type of bankruptcy that I really think is almost silly for most people. A Chapter 13 is a reorganization of your finances. So, let’s say you have, you know, 15 credit cards, um, you’re a business owner, things falling apart, you’ve, you’ve put yourself on the line personally. Things, things are, are, are … The business didn’t go well and now you’re on the hook for all of these credit cards, okay? But, the business is still going pretty well, okay, or maybe not as well as you want, but it’s still there, it’s still viable. Okay, that’s usually when you file for Chapter 13, and the Chapter 13 works a little bit like … Kind of like a debt consolidation or almost like a debt relief plan, okay?
03:27 So, let’s say you have these multiple creditors here that you have to pay, okay? Well, instead of paying them, you’re gonna be paying the court. You’re gonna be paying through a trustee. Okay, this is you. You’re gonna be sending money every month. That money or that amount is gonna be determined by the bankruptcy courts. It’s gonna be an amount that you can afford, okay? And then, the court system is gonna be distributing to each of your creditors until each of those debts have been paid off. That’s usually done over the course of a five year period, sometimes faster. Okay, keep in mind, though … Okay, let’s say you owe $100,000 in debt, okay, and you’re paying off this Chapter 13. You’re gonna pay that, plus court fees, plus attorney’s fees, okay? So, this could quickly turn into $115,000 in debt. I’m not a huge fan of a Chapter 13.
04:28 Okay, the only time in Chapter 13 really works is if you’re self-employed, okay? Um, if you’re not self-employed, typically what I suggest is some sort of a debt relief program, and a debt relief program works very similar to this, and the only difference is you’re gonna send your money into a debt relief company. That company is actually gonna save up that money with you, okay, and then they’re gonna use that money to negotiate settlements with each of those creditors, so that $100,000 that you owe could quickly turn into $50k. So, debt relief companies do a great job of negotiating down settlements, and as long as those fees makes sense, um, and they’re affordable and the company’s performance based, meaning they’re only making a percentage of how much they can save you, it’s a grand slam, okay?
05:17 The cons of that are it doesn’t offer you protection against those creditors. They can still call you, they can still harass you, they can still chase you, they can still sue you, whereas a bankruptcy, again, it’s ‘bankruptcy protection’, okay? You have protection from the court system. Those creditors cannot contact you, they can’t reach out to you, they can’t harass you. That stops. The court tells them, “Cease and desist. We’re handling things from here on end.” Okay? So, keep that in mind. So again, guys, get Chapter 7 as the big one. Chapter 13 is the one I don’t really like too much, okay?
05:50 Um, also, another suggestion is, you know, if you’re a consumer debt or if you’re, if you’re just a consumer, you’re not self-employed, okay, you’re not on the hook for a bunch of business debts personally, then che- Then, bankruptcy is something you really want to think, uh, you really want to think about, okay? If you’re on the hook for $4,000 or $5,000 in, in, in debt, um, bankruptcy might not be the move for; debt relief might be the move for you, okay? Um, consumer credit counseling might be the move for you. Okay, so I’d probably want to explore those options before I even consider speaking to a bankruptcy attorney, okay? Um, and the big reason is, again, that, that bankruptcy’s gonna stay on your credit report for ten years. That’s a pretty big mark, um, and it’s gonna follow you around for a long, long time, okay? What’s interesting, by the way, is I’ve had some people approach me and ask me: should I file bankruptcy, um, even though a debt is six years old? Okay, so the debt is six years old, but it’s big. You know, it’s $30k and all of a sudden, they’re just now getting harassed for the debt. The debt was fairly dormant and they’re wondering, “What should I do?” Well, in a scenario like this, okay, bankruptcy’s not a good idea because six years, this debt is gonna border the statutes of limitations.
07:05 If you’ve seen from my previous videos, depending on the state that you live in, guys, you could have a six year statutes of limitations where the debit comes un-collectable. You get up a five year/four year, um, and their basic reporting is only seven years, seven years plus 180 days from the date of last delinquency, so basically seven and a half years, okay? So, don’t go ahead and start paying attorneys to file bankruptcy and do all this crazy stuff if they’re just calling you, okay? You might actually want to stall a little bit if that debt is going to expire in the next month or so, or if it’s, uh, if it’s already expired, based on your state’s statutes of limitations, that’s worth a dispute and a cease and desist to that creditor, telling them, “Hey, you know, beat it. This, this is, this is a dead issue. You’ve written this off many years ago.”
07:50 So, guys, this is Nik Tsoukales with Key Credit Repair. Any additional questions regarding how you should approach or finagle bankruptcy versus credit repair versus debt relief, that’s a question our consultants can, can help answer all day and we can steer you in the right direction. Have a great day.
Does Paying Off Collections Improve Credit Score?
Your Credit Minute Show Notes:
00:00 [inaudible 00:00:00] here with Key Credit Repairs. Today we’re gonna answer a simple question which is, will paying off a collection hurt my credit score? Could paying off a collection hurt my credit score? So paying collections, good or bad? So let’s break it down to a science. The question is not as simple as a yes or no. So it’s gonna depend on a couple of things.
00:20 So when you pull up your credit report you’re gonna notice a couple of very particular dates, okay? And there’s a difference between them. Okay? You have the date of last activity, okay? And the date, excuse me, the date last reported, okay? So obviously you do wanna pay things, okay, you wanna make sure you’re up to date on all your bills, but let’s say you’ve had a collection that’s fairly dormant. The account is fairly old, okay? Let’s say it’s three years old at this point, and you notice that the date of last activity on that account is 9 of 2014 and then you see the date last reported is 10 of 2018. So that’s typically a debt that is safe to pay off, okay?
01:24 And the reason for that is, number one, the date last reported is fairly current, okay? So paying it off isn’t going to drop your score, okay? It’s not a dormant account, it’s an active account, okay? So the reported date is the last time that the collection agency transmitted a signal into the three bureaus.
01:40 So here is the collection agency. And they have sent the signals to Equifax, TransUnion, and Experian updating this account, hence the recent date. We’re actually in October of 2018 right now. Okay. The date of last activity though, 9 of 2014, that’s the last time that any money was transacted on this account. So let’s say you made a payment to this debt collector in September of 2014. That’s what you’re gonna see there, okay?
02:10 Now, let’s give you another scenario of when you probably might want to question paying back the account, okay? So let’s say the date of last activity, actually, we’ll keep it the same. Let’s say the date of last activity is September of 2014, okay. But, the date last reported is September of 2015. Now this is where it gets a little funky, okay? ‘Cause right now we have a fairly dormant account. That creditor, that collection agency hasn’t reported the item to the um, to the credit agencies in a while, okay? So the information hasn’t been removed but they’re not actively transmitting a signal to the credit agencies. So, where you typically have this, in that last scenario where they’re transmitting that signal, there’s been none of this since September of 2015, okay?
03:09 So this is where you’re gonna question paying off this debt. In some rare cases, okay, and this, by the way, is quite rare. With technology these days these accounts are typically updating on an automatic basis every single month. It’s done through automation, no one’s really thinking about it, no one’s hitting a button, okay? But in some rare cases, where you’re paying off a debt that is this old, you’re waking a sleeping giant, okay? And what happens is that date last reported is brought current, the recent derogatory remark is brought current, and you can actually see your credit score drop.
03:41 Um, we typically have a 90 day lockout period on all open collections where we tell our clients just hang tight for 90 days. Don’t do anything. Let’s challenge them, let’s request validation on these accounts, let’s make sure if you-if you are gonna pay something, even if you agree with the original debt that you’re paying back the right person, that they’re legitimate, that they can document that they’re licensed to collect on that debt in your state, so on and so forth, and they can follow all the rules and procedures under the Fair Credit Reporting Act and the Faraday Collections Practices Act to protect you. Um, so kind of a mandatory lockout period of 90 days just to make sure everyone’s doing the right thing and everything’s validated, and then at that point you can go ahead and start paying off the debts.
04:18 Um, if you wanna talk about a paid for deletion clause in the uh, when you’re paying off the debt or settling it that’s something we can absolutely assist you with.
04:26 Guys, this is Nick Tsoukales with Key Credit Repair. Have yourself a great day.
Credit Karma Vs. Everyone
Your Credit Minute Show Notes:
00:00 Hey, what’s up YouTubers, this is Nick Tsoukales with Key Credit Repair. Guys, today we’re going to talk about credit karma. The question I’m getting consistently is, “Why is my Credit Karma credit score, so much different from what the banks and lenders are using?” Everyone’s going after Credit Karma these days online. Every blog is talking about Credit Karma, it’s the free site, everyone’s using it, and we’re going to call this video Credit Karma Versus Everyone. Okay? So let’s break down why your Credit Karma score is different. And there really is a very specific reason why your Credit Karma score would be different than what the banks and lenders are using, and the main reason really is the scoring formula. So keep in mind, you have various different scoring formulas out there. Okay? The one I always talk about is going to be our good friend, Mr. FICO. Okay? The FICO score invented by Fair Isaac Company, that has always been the crème de la crème. That is the scoring formula that every bank and lender is using for pretty much everything.
01:01 The latest version of FICO is FICO 9, produced in 2016. Um, it’s a scoring formula that banks and lenders really aren’t using, okay. Most mortgage lenders, for you guys trying a home loan are using FICO 4, FICO 5. It’s an older version, it’s got to be a good 20 years old. Uh, but FICO is what the banks and lenders are using. Okay? Now, and then obviously they have you know, FICO 8 and FICO 9, those are for educational purposes only. Keep in mind, there are a good five or six different recent versions of FICO that are used for different purposes as well, there’s the car lending score, the auto lending score, so on and so forth. But we’ve covered that before. Okay? Um, Credit Karma is not using FICO guys, it’s using something called Vantage. So your VantageScore, excuse my bad handwriting, so you’re wondering, what is the VantageScore?
01:55 Well, a few years ago, the three, the three credit agencies, you have the big three. Experion, TransUnion and Equifax, okay, they got together and they actually created um, they formed a team and they created this new scoring formula called VantageScore. Okay? The reasons behind it, eh, you’ve got to wonder. I would say probably a big reason if I was in the scoring uh, business, would be to really bypass the licensing fees that they were paying to FICO every time they used FICOs algorithm, because essentially what they’re doing is they’re paying FICO a fee to use that scoring formula. So essentially what it is, they came up with their own formula. Okay? That formula is showing up on all types of websites. The first website that we really show AdvantageScore show up in, show up on, was a website called truecredit.com. For any of you that have been monitoring your credit for more than a decade, you probably remember TrueCredit. TrueCredit was TransUnion’s credit monitoring site and it was super-duper popular and pretty inexpensive. It might even still be up right now, but typically most people are accessing the TransUnion data directly through TransUnion.
02:57 Now, when Credit Karma showed up to the party, they were offering a free credit scoring formula. They were doing it in conjunction with TransUnion, so they were offering the VantageScore pretty much automatically. Okay? Uh, they’ve now taken on Equifax as well, Equifax is also using the VantageScore through Credit Karma. Um, the one agency you don’t have on Credit Karma is Experion, which is okay, it is for educational purposes only, but again, there is going to be a difference between that FICO scoring formula and the uh, VantageScore. Okay? The main difference really, and I’m actually going to pull up these stats, is going to be payment history. Okay? So your FICO scoring formula is going to account for payment histories 35% of what makes up the credit score, whereas Credit Karma or VantageScore is going to take it into account as 40%. Okay? FICO score, you’re going to use 30% as a percentage, how they weigh debt, and VantageScore is going to use 21%. So even that is going to be slightly different. Okay? Also you have uh, total balances are broken down to 11%, recent behavior 5% um, and extremely low weight available credit 3%.
04:04 So the way they do their algorithm is slight different. It’s not going to be a massive difference in most cases. Uh, VantageScore’s original formula was drastically different from what FICO was using. These days, it’s almost a perfect match. So if you’re using Credit Karma, okay, continue using it. It’s a good little system, it’s free of charge, so I’m a big proponent of free credit monitoring services. It allows you to be in tune with what’s going on in your credit at all times. But if you’re really serious about accessing any sort of financing in the next even six months, I would suggest you move your credit monitoring um, over to a paid site. I’m going to give you a couple of them that are really, really good. Okay?
04:46 One of them is going to be myfico.com. Okay? Myfico.com is FICOs actual credit monitoring service. This the theirs guys, okay. It’s not cheap, though. The three-in-one uh, credit monitoring through myfico.com is somewhere in the vicinity of $30, $40, depending on which options you pick, so it is really pricey. But, when you access that report, aside from getting to credit monitoring and the alerts when you pull your credit report each month, you’re getting the data from all three bureaus, and you’re getting all the different versions of the FICO score. You’re getting the mortgage lending score, you’re getting auto lending, credit card borrowing um, all the good stuff, so you can really see the credit report the same way the banks and lenders can see the credit report, okay?
05:33 Um, another really good site, and I’ll give you guys a quick link, is going to be smartcredit.com/keycredit. So we’ve been working with SmartCredit, really good credit monitoring site, super awesome tech, [inaudible 00:05:53] app, [inaudible 00:05:55] your credit, and you’re getting real-time alerts. The big benefit with our SmartCredit credit monitoring, is [inaudible 00:06:02] run your credit multiple times throughout the month, and it’s just a little cheaper than myfico, it’s about $25 versus the $39. Okay? So another great resource, keep in mind, we’re not offering FICO scores through this website, okay? We’re offering an educational purposes only credit plus score, where with myfico, you’re getting exactly what the banks and lenders are seeing. Okay guys?
06:22 If you have any additional questions regarding Credit Karma versus your FICO scores um, how you should be pulling your credit or preparing your credit scores um, months ahead uh, from getting any mortgage lending, by all means give us a call. There should be, if you’re on Facebook, there should be a learn more button right below my finger here, click on that button, it’ll take you right to our website, you can give us a call and ask any questions. Thanks, guys.
Why Are My Three Credit Scores Different?
Your Credit Minute Show Notes:
00:00 What’s going on guys? This is Nik Tsoukales from Key Credit Repair. Um, thank you for checking out our channel.
00:05 So, question of the day is a pretty common one; “Why are my credit scores different for the three credit bureaus?”
00:11 And I’ll give you an example, and you’ve probably seen this yourself. So, you’ve pulled up Tri Merge credit report, using maybe smartcredit.com or PrivacyGuard or even myFICO. Okay. And what you notice is your credit scores are different. Experian is 760, Equifax 745, and in this example, ah, TransUnion 752. What gives? I’m the same person. Okay.
00:32 The scoring formula, let’s say it’s Fico 4, is exactly the same. So, why are they different?
00:37 Well, keep in mind, these are three different organizations, okay? But that doesn’t really affect the scoring formula because, as you know, it’s one scoring formula, especially if you’re on myfico.com. Okay. Um, so if all the data was exactly the same, you’d assume that the three credit scores were the same. But keep in mind your creditors, debt collectors, banks, lenders, they’re not, they’re not all necessarily sending the same data to all three credit agencies. So, you could have a bank that for whatever reason is only sending data to Equifax and TransUnion and for, for whatever reason, they’re not sending that same data to Experian.
01:20 Why they’re doing it? Um, various reasons. Is it common? No. Okay.
01:24 Also, what you’ll find is sometimes the bank or lender, um, they’ve updated Equifax and TransUnion for this month but they, their systems have, have not yet batched out that data to Experian yet. Okay.
01:35 So, you may have, ah, more positive, ah, reporting, more on-time payments reporting to Equifax and TransUnion on one particular trade line versus Experian. Okay.
01:46 Other more drastic cases that we see a lot more common were, were we’re seeing scores, you know, from 760 to 660 let’s say, um, are with collections. Okay.
01:55 So, let’s say you just incurred a collection. Okay. More than likely, that collection is gonna hit two out of the three credit agencies. It’s extremely common. Okay. The debt collector hasn’t, ah, subscribed to report to all three bureaus. Maybe just to save some bucks they’re only reporting to Equifax or they’re reporting to TransUnion and Equifax or just Experian. Okay.
02:15 So, this is gonna happen. And this is why when you go and get something like a home loan, the bank or lender, they’re never gonna use the highest score, they’re never gonna use the lowest score. Typically what they’re doing is they’re taking the median score. The median is the middle of three values. It’s not the middle of the page or the middle of your credit report, they’re usually using the middle of three values.
02:36 So, in this case if you went to get a mortgage, the bank or lender is usually gonna use your TransUnion credit score, if they are pulling a Tri Merge report. Okay.
02:44 Some other products, like car loans, they might only pull one bureau, they only subscribe to one bureau. But most things, like a home loan, the majority of our clients, you know, they’re always gonna use the median score for this reason, because they will vary.
02:58 Typical variations are somewhere within ten points. Okay. If the variations are more than that then that’s something you gotta dig into it. And when you look at that credit report, you have to analyze really, ah, negative marks. Have you had any negative marks and are they reporting to all three bureaus? Okay.
03:14 And one way you can figure that out is certain Tri Merge reports, reports that have all three bureaus, they will actually separate the data with Experian, Equifax and TransUnion. So, you can actually compare the three right on a credit report.
03:27 Now, if you’re looking at a, a credit report from a home lender, um, they’re usually using a Tri Merge where the data is actually merged. The payment history from all three bureaus will actually be all placed on one line. So you can’t actually see the difference between, ah, TransUnion, Ex-, Ex-, Experian and Equifax. Okay.
03:44 If that’s the case then what you can do is you can either subscribe to an online credit monitoring like myfico.com and actually separate that data.
03:51 Um, also you can ask your home lender to separate the data for you. So, your home, your home loan office should be able to call the company that they’re using to get their credit report. Some of those companies include, like, [inaudible 00:04:02] or LandSafe. And they can actually ask those companies, the company that put, mashed all the data together on their credit report, to separate the reports and actually submit them to see so you can see, if there is a drastic variation, what is the reason. Okay.
04:18 Also … Excuse me. Also, keep in mind, if there is a large variation, like, let’s say this 760, um, with Experian is now a 660 with, with Equifax. But we have the same actual accounts on the credit report. Right away, that’s a red flag that we have some sort of inaccuracy on the credit report. Okay. And that’s something that should be challenged.
04:39 So, if one credit agency is saying, “Hey, these payments are on time,” and the other agency is saying, “No, no, no, you have late payments,” well, we have an inaccuracy in some way, shape or form. And those late payments, if they are inaccurate, they need to get removed. So, that’s a pretty big red alert. Okay.
04:55 Um, guys, any questions regarding the difference between the three credit agencies, the variations of your credit score, by all means click below. There should be a Learn More button right below here if you’re on, ah, Facebook, and there should be a Click Here Sign Up for $0 Today button which should be kinda showing up right here.
05:13 This is Nik Tsoukales with Key Credit Repair, and this is your Credit Minute. Thanks.
Tax Liens, Judgments Could Be Omitted from Credit Reports in a Future
For tax liens The Consumer Financial Protection Bureau (CFPB) has been winning a lot of battles for the people lately. Aside from socking Equifax and TransUnion with fines for deceiving consumers back in January. More recently, it hit Experian with a $3 million fine for the same thing in March. Now, it’s recently championed an effort to change the way tax liens and judgments are reported on your credit record. It’s a major shakeup when it comes to credit reporting.
Specifically, per a report in the Wall Street Journal, Experian, Equifax and TransUnion – the three major credit reporting agencies – will soon be readjusting their respective credit reporting models to omit tax liens and judgments. It’s a move that could help out millions of Americans when it comes taking control of their finances in the future.
What This Means
This move looks to help out millions of consumers and could very well raise the overall average credit score nationwide. This news is especially significant when you consider how crippling tax liens and judgments currently are to most consumers. Presently, tax liens and judgments, even if they’ve been resolved, can stay on a credit report for up to 10 years. That’s right, even if they’ve been paid off, a consumer’s best bet is to get it released and then petition the credit agencies to remove it from their record to avoid extensive credit repair.
Unresolved liens and judgments stay on a credit report for 15 years.
To be fair, there’s still some things that we don’t yet know when it comes to this news. For instance, will consumers have to petition the agencies to have liens and judgments removed? Or will the agencies perform this automatically? That’s an unknown. What’s not an unknown, however, is how positive a move like this can be for consumers.
Not Everyone’s Happy About It
While consumers should be welcoming this news, not everyone is happy about it. For instance, this report is putting lenders a little bit on edge. Why? Simple – it provides less data for them to assess consumer risk. When lenders make the decision on whether or not to approve a loan, it becomes a question largely of how reliable of a consumer they’re working with. A tax lien or judgment on one’s credit report would certainly factor into their decision, and being that it can take up to 15 years for such to be removed from an individual’s credit report, it provides lenders with more of a comprehensive history of consumer behavior. This news, obviously, alters that, giving lenders one less thing to ultimately analyze. In a worst-case-scenario situation, it could wind up burning a lender in the long run.
CBS News Investigates 40M Credit Report Mistakes
Data collected about us rules our lives. Our driving records, search engine history, online purchases and credit history are bought and sold every day. And, decisions about where we live and where we work are often made based on the information in our credit reports. But, a new report from 60 Minutes “Credit Report Mistakes” indicates that the information about our credit can have significant problems. According to their research, 40 million Americans have errors on their credit reports.
What Kinds of Credit Report Mistakes are out there?
One in every four consumers has some sort of error in their credit reports. Around five percent of consumers have an error that can reduce their credit scores.
Common serious errors include:
Paid accounts appearing as delinquent.
Closed accounts showing as open.
Bad debts that belong to other people who have similar names or Social Security numbers.
When errors like these show up, they can mean paying a higher percentage rate on your mortgage, auto loan or credit card, being denied a loan or failing to get a job that you are qualified for. If these serious errors exist in your report, the lost opportunities can cost you tens of thousands of dollars over a period of years.
What Happens When You File a Dispute for a Credit Report Mistake?
When you find an error in your credit report, the current remedy is to file a dispute. And, every year, eight million people file disputes about their credit reports. Usually, you have to do this by either mailing a letter, calling a toll free number or visiting the credit reporting agency’s account. The websites are geared more toward selling products and are not always efficient for disputing reports. When you make a call, you are often connected to a person on another continent who does not have the authority to make the needed changes on your account.
If you dispute Credit Report Mistakes by mail, your request will often go to an office in India, Chile or the Philippines. Investigative reporters with 60 Minutes interviewed dispute agents who had worked for Experian. The agents said that the processed around 90 disputes per day and that they had few options for investigating disputes. They did not have the power to contact the people involved via email or phone. They could only study the documentation that they had and give it a two digit code for complaints such as “not mine” or “never late.” Those were then sent with a brief summary back to the department store, bank or other creditor who originated the information. In general, these disputes were settled in favor of the creditor.
A number of legal credit experts say that they find these practices lack transparency and may not be in compliance with federal law.
Saving Your Credit from Errors
The first step you can take is checking your credit report regularly. You are entitled to a free report from each of the three major reporting agencies once every 12 months. You should also request your report immediately if you are denied credit. Often, resolving the error can be difficult on your own. If you are having problems, contact us to learn more about how we can put our expertise to work updating and correcting your report to get you the credit you have due.
John Oliver Takes Down the Credit Agencies
Credit reporting and background check agencies have a massive amount of power over our lives. They don’t just have an impact on whether or not we get a new credit card. They can affect where we live, where we work and how much we pay for things like car insurance. But, as John Oliver recently described on his show Last Week Tonight, they are not always used in a way that is fair to consumers.
How the Big Three Credit Agencies Affect Your Life
Equifax, Experian and TransUnion all market their services beyond individual consumer credit. TransUnion explicitly states that their reports allow employers to make quick, efficient decisions about who to hire. Experian advertises that their scores can predict whether a prospective employee will be able to handle company funds responsibly.
Why Their Rulings Can Be Unfair
Half of all consumer debt is medical debt. These sorts of debts can often be large and not a strong indicator of how responsible a person is.
While credit reporting agencies advertise that their services can help employers pick responsible candidates, there is little data to back up the assertion that a person’s credit score is an indicator of their trustworthiness on the job.
Errors Abound
And, around 25% of consumers have errors on their reports. One in twenty had serious errors that would cause people to pay more than they should for everything from car insurance to a mortgage on their homes. In real numbers, that translates to 10 million people with severe errors.
Credit bureaus can make errors that can significantly impact your life. In one case, credit bureaus had erroneously labeled a man a terrorist. A woman who was trying to buy a travel trailer learned that the credit bureaus listed her as deceased. Still another woman took six years and a federal lawsuit to get negative entries that were clearly erroneous off of her report.
Last year, GIS and their affiliates had to pay out $13 million in fines and damages. The three credit bureaus have been the subject of the greatest number of complaints to the CFPB.
Getting the Credit You Deserve
Under the Fair Credit Reporting Act, the three major credit bureaus are required to give you a free copy of your report every year. However, if you discover an error, it can often be difficult to get these errors removed from your reports.
Background check companies are also required to give copies of their reports once a year. But, the background check companies do not keep ongoing records. They usually only generate a report when someone like a potential employer or landlord requests one. And, many companies will not sell you your own report so that you can check it for errors. You’ll only know that there was an issue if what is on your report costs you a job or a place to live. The FTC admits that there is no national list of background check companies and thus no comprehensive tool for oversight.
We have years of experience dealing with the intricacies of credit repair. If you feel that there are errors on your credit report that are keeping you back, contact us to find out how we can help you correct the problems and unlock your opportunities.
Experian Sued by the State of Mississippi
Credit reports are a necessary evil. Creditors pull a copy any time you borrow money, landlords use them to determine whether you are a safe bet, and employers in some states still use them to determine your ability to manage financial affairs.
No Built-In Protections
The problem is, credit reports are routinely riddled with errors. Debt management companies work with clients every day who are hounded by inaccurate information and in need of credit repair. Like being accused of robbing a convenience store when you are actually home in bed, it is up to you – the consumer – to disprove inaccurate information included on your report and repair credit. The three major credit bureaus have thus far made it a practice to do little more than collect data and sell that information to those who want to see it. Whether or not that data is correct is of little concern as long as they continue to make a profit.
States Become Involved
Now comes news that the state of Mississippi has sued the world’s largest credit bureau, Experian. The lawsuit contends that paperwork errors and sloppy consumer protection are rampant. Experian has gone so far as to report that some consumers are on a terrorists watch list. While it is Mississippi leading the fight against the massive agency, 32 other states are currently investigating the industry as a whole.
They ask how fair it is for a person to be denied a job or loan due to errors included on a credit report. According to Mississippi Attorney General Jim Hood, the company knows that the credit files of millions of Americans contain grievous errors, and yet refuse to do anything to correct the situation. Credit bureau are not the consumer’s friend and do not exist to give credit tips or help the consumer build their credit score. Even as states come after them, it seems that as a whole the industry refuses to back down.
Three Major Bureaus, Three Sources of Trouble
All three of the major credit bureaus – Experian, TransUnion and Equifax – gather information from banks, landlords, debt collectors, and any other source that might provide a snapshot of personal finance habits. Although it is an open secret that these credit reports are often laughably inaccurate banks and some prospective employers still look to them to help determine a person’s financial stability.
The Mississippi law suit with experian also alleges that Experian provides no easy way for consumers to correct those glaring mistakes, regardless of how an individual may be impacted by the errors to their report. When Experian does respond to a customer complaint, more often than not they find in favor of the debt collector or banking institution that reported the black mark. After all, it is essential to keep their paying customers happy.
Neither the credit bureau or its trade group, the Consumer Data Industry Association, are willing to discuss the law suit or answer any questions about their lingering practices.
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