GOVERNMENT WARNS ABOUT FREE CREDIT REPORTS

GOVERNMENTS WARNS ABOUT FREE CREDIT REPORTS

Specialty Reporting Agencies to Adhere To The Law

The List of All 41 Specialty Reporting Agencies

Collecting Medical Data???

If you were to go to the website for your free credit report (WWW.ANNUALCREDITREPORT.COM) , you will notice there are only the three major bureaus –Experian , Equifax and Transunion – in which you can check your credit and receive a free credit report once per year.  The consumer financial protection bureau (CFPB) (out of the newly enacted Dodd-Frank Act) has just issued and delivered a new bulletin to the specialty credit reporting agencies that they, too, have an obligation under the Fair Credit Reporting Act (FCRA) to provide free access to these special reports.  In this bulletin sent to these specialty credit reporting agencies, the companies must provide a “streamlined process for consumers to request a free annual consumer report.”  The CFPB took a look at many of these agencies practices and came to the conclusion that several may be violating the law.

John Mackey, the Founder and Executive Director of Master Credit Solutions, a national credit education and credit restoration company located in Minneapolis, Minnesota, states, “This is a big step in the right direction.  We have needed, for so long, full disclosure, and application of the FCRA to the specialty credit reporting agencies.”

Mackey further states, “What people will find amazing is the kind of data these companies are collecting and selling behind your back.  Most of us know that the three major reporting bureaus are Experian, Transunion and Equifax.  Some people are not aware there are companies, specialty reporting agencies that collect data about your checking and banking practices.  Did you know they are reporting on sub-prime consumers, insurance coverage, personal property, auto, your name address and telephone, your telecommunications, pay TV, utility services? “

“Here is the Coup De Grace:  There is a specialty reporting agency that collects data on your prescription drug purchases and about your medical conditions.”

It is relatively easy to get your free report for the three major bureaus – Experian, Transunion and Equifax - throughhttp://www.annualcreditreport.com.  How do you get access to all 41 specialty reporting agencies that collect data on you?  You can get this information at the CFPB website or you can go to www.MASTERCREDITSOLUTIONS.com and click on CFPB report.  

CREDIT DISPUTES AND YOUR HOME LOAN

You will find there's a little-known and debatable practice by home loan titans Fannie Mae and Freddie Mac,( the people who financially back the home mortgage loan business) that will end your next house loan app directly in its’ tracks.


Let’s take a look at an example: You have great scores: in the 780 range. You have great equity in your home. You want to refinance your home to send your child to college. You have been on the job for 20 years and have more than enough income. The rates are great.

But your bank states: Sorry. We're not able to do the loan. Why? What the ……………………………

Fannie Mae's automated underwriting system won't accept any application in which there is a note in the credit report that a consumer has disputed an account or "trade line."


You explain that the dispute -it was for a medical bill --was valid. The account was closed. The creditor promised to eliminate the dispute notation but evidently never did. The loan officer won't budge. The refi application is dead.

What's happening here? Under the Fair Credit Reporting Act (FCRA), you have the right to dispute incorrect information on any account within your file. When you challenge that information, a notation to this effect must be made on the file (as per the FCRA). So long as it remains, most credit scoring systems generally will not factor the disputed account into the calculation of the consumer's rating. Thus, the potential lender does not receive an accurate reflection of the real score.

Does Fannie Mae deny loans to customers because they used their legal rights?


Fannie Mae’s and Freddie Mac’s automated underwriting techniques -- employed by virtually all lenders doing business -- delivers applications with "consumer disputed" items on credit files back to the lender for what is referred to as "manual underwriting."

Freddie Mac and Fannie Mae do not forbid delivery of a loan . . . where the borrower has disputed information" with their credit report. Their underwriting requires the lender to ascertain and document whether or not the disputed information is correct and underwrite the borrower's credit accordingly. Here is the dilemma: The lenders typically won't manually underwrite because then they have the legal responsibility in the event the loan goes into default. And they typically will not keep these loans on their books. They need to sell them to the secondary market.

Whenever trade lines in a consumer's file include a "disputed" notation, most scoring software disregards them for the purposes of calculating the score.

A significantly delinquent account that could legitimately depress a FICO credit score might be taken out of the equation -- at least temporarily -- if a "consumer-disputed" notation is in the file. Fannie and Freddie are attempting to protect themselves from gamesters and frauds. This did happen a few years ago when sham credit repair companies and mortgage companies would challenge an item just to have it removed from credit scoring. At that time, the bureaus would totally remove the item during the dispute, the score would go up, the file underwritten and closed. Then the trade lines would be added back in once the item was validated and the score drops 50 or more points.

But what about the impact on disputed items when the consumer is correct -- or files in which creditors neglected to remove the disputed-account designation? For the time being, it's tough luck for all candidates with disputes in their credit files.


JOHN MACKEY

What Debt Collectors Won't Tell You About Their Phone Calls

What Debt Collectors Won't Tell You About Their Phone Calls

Debt collection ain’t easy. In a few companies, it may be called the distressed accounts or recovery department. Other companies and law firms are debt collection businesses, which is all they do. They generally have a little bit of "desperado" approach about their work. And, occasionally it's more than merely their mindset that is desperado. Although it may seem like they will say almost anything to make you pay, there are statements that violate the Fair Debt Collection Practices Act (FDCPA), which controls the conduct of much of the debt collection agency industry. Plus, there are some things they will not elucidate.

T’was the Night Before Christmas and They Still Call!

A criticism often heard by bankruptcy law firms from clients who are preparing to file for bankruptcy, and those that have files at collection agencies, is that debt collectors call non-stop, call-after-call-after-call demanding settlement. Even though the FDCPA restricts the collection calls between 8:00AM and 9:00PM, many collectors take advantage of the ignorance of the people they call, presuming they will not know much better.

While bankruptcy and its "automatic stay" should stop all the pestering phone calls, in addition to all other collection activity, it is possible to end the string of phone calls merely by sending a letter to the debt collector.

In the letter, identify the debt and you no longer want to be contacted on the phone concerning it. Right after receiving that correspondence, the collector is only permitted to contact you to inform you that they are submitting a lawsuit to collect your debt and/or that they'll no longer contact you by telephone. Keep in mind, this does not eradicate the debt, but it will stop the telephone from ringing.

WHO IS SUE?  AND WHY SHOULD I CALL HER?

The Federal Trade Commission (FTC) is in charge of monitoring debt collectors. In 2010, greater than a quarter of all complaints (over 140,000) received by the FTC concerned debt collection. And, if companies violate the FDCPA, you can do more than just complain. If your collection agency ignores the letter, (send it certified mail with return receipt, this way you've got proof when it was sent and signed for, and by whom), carefully document every time they phone. Your solution is to then sue and perhaps receive up to $1,000. You may think, "How can I sue, I'm in financial trouble? I can't afford an attorney."

In this case, it is possible. Besides the $1,000, the collector may have to pay your attorney fees. Paradoxically, should you win, the debt collector would precipitously be in your debt.

John Mackey

Can A Collector Call Me At Any Time Or Any Place They Want?

No. Nope. Nada. Nyet. You will find very specific procedures regulating what a debt collector can and cannot do when trying to collect on a debt. They are restricted in the types of things that can be done, and if the collection company breaks those rules, there are monetary (liquid) damages that may need to be paid for the violation. (This is only if a lawsuit is filed).


(Side note: I am conducting a webinar on DEBT COLLECTORS: LIES, DAMN LIES AND DECEIT. You can sign up for it here).


The area of legislation that governs the activities of a collection company is the Fair Debt Collection Practices Act (FDCPA). This federal government statute regulates how, when, and where they may collect. For example, Section 805 states that '... a debt collector may not communicate with a consumer in connection with the collection of any debt -- (1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. This typically suggests that the collection company can call between the hours of 8am and 9pm. So if a collection company is contacting you at 6am in the morning, or at 11pm at night, then they are violating the law. Section 805 (2) states the collection company cannot attempt communication "if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address." So if you tell the collection company that you have legal counsel on the matter, and they continue to contact you anyway, they've broken the law as well as your protection under the law.



Section 805 (3) of the Fair Debt Collection Practices Act states that the collection company may not make contact "at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication." This obviously means that in the event the collector calls you at your job, and you tell him/her that they can't call you again as it is against company policy or your supervisor will not allow it, and the collector calls you anyway, your protection under the law has been violated.



There exists a relatively extensive list of what the collection agencies can’t do when they try to collect on a debt. Even calling your cell phone is a violation of law (since you cannot be made to incur charges due to the collector's activities, and most people have a plan with their cellular company through which they are billed for minutes used). But many folks are not aware that such laws exist (needless to say, many of the collection agencies do not want you realizing that). If an infraction can be shown to have taken place, then the debt collector must pay you $1,000 in damages. However, this is not automatic: An attorney must be hired and the appropriate actions taken. Additionally, the debt collector must pay all of the attorney fees. What that means is that there won't be any upfront cost for you for having your case filed by a lawyer.

Get ready for a new wave of bank fees

Get ready for a new wave of bank fees.  With the new Durbin Bill that took effect, banks have been looking for a way to regain their profits.  Or as they allude to, so they will not lose money.  In fact, the CEO of Bank of America says the fees are good for their customers.  He says their service will get better!  Oh, the audacity of it all.  He thinks he can talk to America like he talks to his servants (sorry, employees).
It reminds me of a story.  I am a big baseball nut:  I eat, sleep and breathe it.  I also coach it.  But there is a distant story from the LA Dodgers owner who at one time stated that in comparison from this year to last year (which was quite a few years ago) he lost $2,000,000.  Well, how could this be?  After much discussion and questioning of this owner, he admitted that this year he had made $15,000,000 and last year he had made $17,000,000.  In his mind, he had lost $2,000,000!  Talk about “spinning” something!
Here is a quote from ABC News:  Bank of America customers, vote with your feet, get the heck out of that bank,” Durbin said on the Senate floor. “Find yourself a bank or credit union that won’t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.”
Durbin said consumers are rightfully outraged about last week’s announcement.
“It is hard to believe that a bank would impose such a fee on loyal customers who simply are trying to access their own money on deposit at Bank of America,” he said. “Especially when Bank of America for years has been encouraging their customers to use debit cards as much as possible.”
Most basic checking accounts at Bank of America will see a 40 percent jump in monthly costs and the bank says the debit fee will be waived for customers who upgrade to “premium” accounts that require higher minimum balances.
Here is what we need to do:  Take a hike.  Run, do not walk.  Vote with your feet.  Take your business to the nearest Credit Union.  There are a lot of things a Credit Union can do that a bank cannot.  If you are trying to re-establish your credit, it is much easier to do that there.  If you want to find out how, Click here. 
Credit Unions are not for profit:  They are owned by the customers.  Yes, you can be an owner.  If you join, you will be.  They offer much more competitive rates than banks.
If you want to find a credit union around you, just go here:  www.joinacu.com.
John Mackey

THE NEGATIVE EFFECTS OF CERTAIN ACTIONS ON YOUR CREDIT

THE NEGATIVE EFFECTS OF CERTAIN ACTIONS ON YOUR CREDIT

Among the questions I am asked a great deal about concerning credit scores is how particular actions, like late payments, bankruptcies, foreclosures and other derogatory items affect credit scoring.

Until recently, nobody really understood. The company that created the leading credit score, FICO, has been very defensive about releasing details regarding their proprietary information. Well that has changed, to some degree. FICO has unveiled information about how specific actions, from filing a bankruptcy to maxing out a credit card, can affect individuals with different credit scores.

FICO was asked to calculate the effects of those actions for two examples: A person with a 780 score on the FICO 300-850 scales, and someone with a 680 score. Here are the results.

The outcomes are shown in a range because FICO is still reticent in disclosing too much about its proprietary system. However, the range is fairly tight and you can clearly see the incongruent impacts of the different actions.

	EFFECT ON 680 SCORE	EFFECT ON 780 SCORE
MAXED OUT CARD	10-30 POINTS	25-45 POINTS
30 DAY LATE PAYMENT	60-80 POINTS	90-110 POINTS
DEBT SETTLEMENT	45 - 65 POINTS	105-125 POINTS
FORECLOSURE	85-105 POINTS	140-160 POINTS
BANKRUPTCY	130-150 POINTS	220-240 POINTS

Let's make this clear: Your own outcomes may vary.
People with a similar credit score can have very different credit user profiles: more or fewer accounts, a different combination of accounts, a longer or shorter credit history, use of more or less of their available credit, etc.
Because of those differences, the same action -- maxing out a credit card, say -- is capable of having diverse outcomes on people with the same score, with regards to the details of their individual credit user profiles.

FICO assumed both people had a number of active main cards as well as a mortgage, an auto loan and student loans.

The person with the 780 score:
A. Has at least 10 credit accounts as a whole and a 15-year credit history.
B. Utilizes 15% to 25% of her credit card limits.
C. Has no past due payments on their credit reports.


The person with the 680 score:
A. Has six credit accounts as well as an eight-year credit history.
B. Uses 40% to 50% of her credit card limits.
C. Was 90 days late on an account two years ago.
D. Was 30 days late on another account one year ago.


MAXING OUT YOUR CARD
Using 100% of your limit on any credit card puts you at risk of over-limit fees. It also takes a bite out of your credit score. Our person with the 680 score might lose 10 to 30 points from this one action, while the 780 scorer could shed 25 to 45 points.

The difference points up an important fact: The higher your score, the more points you tend to lose from "bad" actions. That's because the scoring formula is sensitive to any sign you're getting in over your head. Maxing out a credit card is considered one of those signs.


You also should know that it typically doesn't matter to the formula if you carry a balance or pay off that maxed-out card as soon as you get your statement. What's usually reported to the credit bureaus is the balance on your last statement. Even if you pay the debt in full before the due date, the maxed-out card will hurt your score.


LATE PAYMENTS

Sending a check a few days past due usually won't hurt your score, although you may incur late fees and induce higher rates of interest. The big hurt comes when you miss a payment period entirely.
A 30-day-late report would cut 60 to 80 points from our lower-scoring person and 90 to 110 points from our higher scorer. Quite simply, one lapse of attention could drop the 680-scorer into subprime credit terrain, and our 780-scorer could find credit much harder to obtain and more costly.
This is why it is so vital that you set up automated payments to ensure your bills get paid promptly, all the time. Together with credit cards, you can set up automatic payments that make minimum payments from your checking account to protect against a late payment. You can always make a second transaction that decreases your debt or pay it off entirely. You can subscribe to automated payments on the Web site of your card issuer.


SETTLEMENTS
All the commercials about "settling your debt for cents on the dollar" make debt consolidation sound like a great solution. But failing to pay what you owe to a creditor will take a serious toll on your score.
The 680 scorer would lose 45 to 65 points with this option, while the 780 scorer could shed 105 to 125 points.


I hope this clears up some of the questions regarding credit scoring.

CREDIT CARD FRAUD

MASSIVE PROBLEM
Credit card fraud has been a massive problem since the credit card was first introduced in the 1950's.

Prior to the internet, the main method in which this type of theft was committed had been by taking and using the physical card.

Today, this type of robbery has grown to become a lot more complex.

Structured hacking groups strike websites exclusively to steal individual and credit card data.
Illegal websites which are hosted in foreign countries, are used to sell this data to the highest bidder all over the world. These activities generate huge profits for anyone carrying out theft and huge headaches for those that have their data stolen.


Credit card and I.D. fraud has turned into a billion dollar per year dilemma that law enforcement, credit card companies, and consumer groups cannot manage to get a handle on.
It is extremely common for people to have experienced this type of fraud, typically multiple times in their life. Theft can result in loss to finances, decrease in good credit score numbers, and stress from getting through this difficult predicament. Fraudulent charges are usually taken care of by credit card issuers fairly quickly, but consumers always wind up paying for them in the end with higher fees.


How can Fraudsters Get Your Credit Card Details?

One way that credit card thieves can get private information is via a process called phishing. Fraudsters and identity thieves send millions of junk emails under the guise they are from a financial institution or credit card company. The emails make a consumer believe that their is “trouble with their account”. They are then prompted to enter their C.C. number, pin, and/or social security number. Sometimes a link in these phishing emails will redirect users to a site that replicates the exact look of their bank or Credit Card Company. The purpose of these “fake” sites is only to gather usernames and passwords. If you think maybe that you have accidentally entered your username and password into a website that is not genuine, you should contact the fraud department immediately .It is usually very confusing when banks and credit card companies send out genuine emails.

Just how can you tell the difference between a “phishing” site and the real site? One way that you can tell a fake site, is to check the root of the domain.
• For example, the genuine website for American Express is www.americanexpress.com. A phishing site attempting to steal your details might appear to be this: americanexpress.xyz.com.
• Notice how the root domain for the fraudulent website is “xyz.com”, not “americanexpress.com”.

One more indication that you are on the genuine site, is that the url should start with “https://, not http://”. HTTPS (Hyper Text Transfer Protocol Secure) signifies that the site has a security seal. Phishing sites will most likely not have a legitimate security seal. Most browsers will also show a “green lock” to the left of the url, showing that you are on a secure site.

Another way that hackers could possibly get passwords and credit card data is via computer viruses. Viruses known as “keyloggers” track the keystrokes entered into infected computers. If your computer is corrupted from this type of computer virus, passwords and credit card details are recorded and transmitted to some perpetrators via the internet. To stop keyloggers or other types of malware from infecting a computer, it is important to regularly run anti-virus software. The one most recommended is http://www.malwarebytes.com/. You should also try to avoid contamination by not downloading (or executing) email attachments from unknown senders.

How to Spot Scams or Theft
If fraud is caught in its early stages, major problems and damage can mostly be avoided. Keeping track of bank and credit card statements carefully will help you find any fraudulent charges that you did not make. If you notice payments you do not recognize, contact your company’s fraud department immediately.


Another important thing you must do is maintain close track of your credit history. You can monitor this history by obtaining a credit history annually from AnnualCreditReport.com. This website is run by the 3 main credit bureaus (Equifax, Transunion, Experian) in order to comply with the Fair Credit Reporting Act. This act enables all consumers to have access to their credit information and facts totally free, once each year. By going to this website, you can check your reports at all 3 bureaus and ensure no fraudulent accounts have been opened under your name. Checking this information at least each year is advised to look for fraud.