Credit Law Center Knowledge Base
Check our selection of videos as we learn together about what makes Credit Law Center so unique and stands apart from all other credit repair companies in the industry.
One of our very own put it best...
Credit Law Center is a really awesome place because you get to wake up every day knowing that there's a potential that you could change somebody's life just by doing your job and going home to your family your pets and knowing that you change somebodies life is pretty rewarding.
I love that we get to help people. Every day I talk to clients who thought they didn't have a chance to purchase a home and to see the joy and hear the joy in their voices when they call me to tell me that they got pre-approved for a mortgage and they found their dream home.
The owners of credit Law Center are very professional they know what they're doing. They have studied their craft and they are so easy to go to if you have any questions.
I like the fun atmosphere between the people that work here and the management. Most everybody works together as a team. We can all have a good time but we can also get our jobs done. It's just a great family environment so it's it's really exciting to actually get up and know that whenever you come to work you're actually going to have a good day because you know that the people that you're working with they're going to have smiles on their faces are there. And we honestly all like to work together.
So it's also I think culture is important to me personally because people should come to work and enjoy what they do. They should know that what they do matters and actually helps people and at the end of the day they can look back and it may sound a little cheesy but look back in their life realize what they did it actually helped people and made a difference in the world. I'm not saying that every single credit report is just changing the world but to know that you're getting that family into a house or you're finally getting that young professional car loan or in the car that they've always dreamed about having and there's maybe material things. Then at the end of the day they really are about.
Who people are the lifestyle they want and helping them achieve their goals.
So then today that's what the culture is the culture here is you're a bunch people together helping other people get what they want.
And in a happy environment it's a win. And that's what that's what we're for
What we do is we actually help consumers improve their buying power by challenging the negative and inaccurate information on their credit report. We use that and in our process when we find mistakes we use those mistakes as leverage to gain the deletions of settlement of those counts for those consumers. The main thing that separates credit loss enter from any other credit repair company is we actually are a law firm and we use the law to help assist the consumers in the credit repair process. So never worked with anybody that charges an upfront fee or as a monthly membership. I only worked with companies that are actually going to charge it if they get the items fixed and when they get it fixed and that's what separates us from most all credit repair companies here at credit Law Center we truly believe we're only as good as the people we hire. We've got an awesome team that's always growing with us and the people that we're looking for to join our team are actually someone that can help consumers and enjoy that each and every day of helping consumers change their lives in regards to their credit report. If you've been turned down for financing Contact us today we can help. We're the people you need to talk to. We help people like you. Each and every day Our company motto is helping improve people's buying power and you don't pay unless it goes away.
It's the results have been I've I've had a lot of people using either of the monthly providers monthly service providers where you pay 50 60 bucks a month or whatever that number is I don't know much there anymore. You know the thing with that is they're going to keep you in their program as long as they can and so it just seems like there's no urgency. And credit law there's urgency like they hit them all at once. You know if they're ready they'll stop. Like so if their credit scores to a point where they qualify they're like hey we're we're through round one but looks like they're gonna qualify here you might want to you know what do you think if the clients are ready to go there and buy a house. I mean we'll stop they'll stop everything. We'll get him qualified and then when they're done they can get back with those with credit loss and I just like how the goal the end goal is get them into house.
If you're the victim of a relentless collection calls we can help at credit Law Center we get the calls to stop. How we do this is we notify all of your creditors that you're now a client of our law firm. We also send out correspondence to them indicating that any and all communication to you should go to us. They have to comply with this request. If they do not. It is a violation of the Fair Debt Collection Practice Act and they are liable to you and to us. Call us today to find out more information about how to get these collection calls to stop.
The SCIRI mandates that something underreport having the name of these three things. It must be verifiable accurate and timely. A recent study indicated that 79 percent of credit reports contain errors. Does yours. I cried a Law Center. We sued for those accuracies if you would like to speak with someone about your rights on the ICRA please give our office a call.
As a law firm we have the ability and power to negotiate judgments repossessions. Charge off or any sort of debt that is still reporting on a report. We use the power of the law and our attorneys to negotiate these aims in a way that's favorable to you while not debt consolidation or bankruptcy. We do have significant tools available to us that help negotiate these debts and save you significant amounts of money. If you have any questions or concerns please call our office today.
A credit Law Center we use three federal statutes to assist consumers. The first one is a Fair Debt Collection Practices Act just like it sounds. This statute lays out a specific way in which debts can be collected. Both legal methods and illegal methods. The second is the Fair Credit Reporting Act also known as the FCA right. Just as this sounds it makes everything on your report has to be verifiable and accurate and a reported has to be both of those prongs. So therefore there's an action report. We use a Fair Credit Reporting Act to pursue that violation. Finally is a Telephone Consumer Protection Act. This act is specifically designed for text message fax machine violations pre-recorded voice mails. Obviously anything to do with the telephone. All three of these federal guidelines provide for attorneys fees are successful. What that means is if we take your case and pursue it and we're successful the other side pays our fees. You would owe us nothing. Please contact us today if you think you might have a case in any of these areas of the law.
Breana and Janna with Credit Law Center we are just going to share some credit advice this week w mortgage asked us to be part of their segment so we really appreciate that. We're gonna just discuss some misconceptions about credit. And Jane is gonna go through and answer some questions that we've had we posted on Facebook to see what people are asking. And we wanna make sure we get to that feedback. So we're gonna just jump right in. So the first thing that a lot of people ask is Why is my credit different online when they pull up those scores and then why is it different than when the lender pulls it.
That's a great question. I think we get asked this more than any other question and it's completely confusing for most people even people that are in the industry like real estate agents loan officers and everything. So understand that the scores that you pull up online are not actual Vegas scores. They're not anywhere really close than what your loan officer or say a car dealership or a credit card company would pull up. So their call advantage scores are consumer scores but typically much higher than what your actual FICO scores will be. So typically they start out about a 500 and ended a thousand. They calculate everything much different. They are good to see what's positive and negative and negative on your credit report but you don't want to use them and think that you're actually looking at your figure scores. Now I have a monitor my credit but I want to see what's positive what's negative image sure everything is going the way I think it is.
So use it for that but understand if you're trying to look at that and think that that's your actual scores it's not like I said it's typically much higher than what if I guess where I will be.
So of people then they get pretty frustrated at their lender because they're like Hey I just got my credit it says this and now you tell me it's on points lower.
Yeah I feel really bad for our loan officers as so many times you know they look it up in their credit and like or they think it's their Fargo scores and like all this is also I mean on it 680 it's much higher than what I thought it was. And then they call their loan officer they think they're ready to go ahead and purchase a home and they're in the low six hundreds. So it's not your loan officers small don't beat them up at all. It really isn't. But it's just the way that their scores are calculated and and they like I said they start out much higher now even with in Fargo scores two and a lot of people don't understand this there's 56 different versions of Fargo.
So if you go into a car dealership or apply for a credit card those scores are typically going to be a little bit higher than if you would go in to apply for a mortgage. So credit card companies and car dealerships usually use Fargo version 9. And then lenders are using Fargo version 4 that's not going to change anytime soon. Freddie and Fannie Mac are the ones who dictate that it would literally cost billions of dollars to switch. So then we kind of talk about all we talk about a lot with.
The errors on reports.
What is the number of errors or what. What's the likelihood or the percent of credit reports that contain errors. It's terrible. I mean 79 percent.
So seventy nine percent of all credit reports contain errors which is a huge number and there's literally no other industry in the world that could get by with that 79 percent of the time except for maybe the IRS or the Weathermen. That's my favorite saying. But it really is staggering and most people don't even understand that which means at 79 percent of the viewers on here have errors on their credit report. 79 percent of the people in this coffee shop have errors in the credit report that's that's real facts that's real information and they've proven that so on credit reports people got you know they've got their collections or their charge offs.
You know all of that stuff on their reports judgments. Let's talk a little bit because I know you know even sometimes lenders will tell people that they can pay go and pay a collection. Yeah so does paying a collection help the credit score or how does that affect their report.
So obviously you would think common sense would tell you if you have a collection and report and you go and pay it off it's going to help. Right. That's absolutely false and please understand that I'm I'm not being like overdramatic or anything if you pay a collection that's showing up on your credit report.
You have a huge public probability of your scores actually lowering. Now the reason why is because instead of it just showing up like or removing after you pay it it shows up as a paid collection versus a collection. So it's like the difference of having 10 stitches instead it's well you're actually harming your scores. So let's say I go to the emergency room three years ago and then they throw it on my credit report. If I don't pay it today what's going to happen is the last state of activity from three years ago is now going to be today's date because a recording that something has changed that I paid it off it shows up a collection and now my scores have actually lowered I've seen it lower over 100 points per honor. It's a big big deal. So be careful if you do have collections on your credit report. Make sure you know what you're doing. And you know what to do. You can always call us and get some consultation to find out what to do but just don't think that you can just pay it off and it fixes your scores go up they most likely will go down.
So then the other thing that's impacting their scores is late payers where people are like oh I just had one 30 day late is had a big deal.
Let's kind of talk a little bit because we had questions about that once the late payers due to the credit report.
So one late paying one 30 day late can damage your scores anywhere depending on what else is going on in your credit. But anywhere between 30 to 50 to 80 points. So one late pay is absolutely. Terrible for your credit.
You want to make sure that you're paying everything on time. Now once you do let's say that you had a hiccup and you know what guys I've been there too but you had a hey guys you know you go through a divorce or you have a medical issue. Or job loss or whatever it's going to take about 24 months to actually heal from that.
You won't be exactly back where you are but you are going to be healing. And then it kind of starts slowing down as far as that the power of that.
After about 24 months.
Okay so then if they're trying to figure out how to get their scores back up or try and take care of those late fees. What's a good way to start to build their credit in. You know what. What's a healthy credit report look like.
So a healthy credit report. So what you're I would say what your ideal situation would be with your credit.
You want to make sure that you have it for trade lines and trade lines is what I mean like credit cards or installment loans installment loans are going to be home loan auto loan personal loan.
So I like that it's a good rule of thumb as to credit cards a home loan and an auto loan that's going to give you a good credit pro profile now also keep in mind that history is so important so many times people make the mistake and they think that payment history is a hundred percent of what's making up your FICO score. That's only actually 35 percent. So you want to make sure that you have good thick history.
So you want your credit cards in to be like keep them until your grandchildren our children and then as far as your installment loans and again that's going to be home loan auto loan personal loan you want to make sure that you're paying on those for twelve months or more.
That's going to give you a really good credit profile make sure that you're always maintaining those four straight lines at all time. So if you pay off your car make sure you have some other type of storm alone. Also keep your credit card balances about 30 to 60 days before you go into apply for any type of loan. Pay the balances down as low as possible. So a really good rule of thumb is the older the credit card the lower the balance the better your FICO scores. So it's a really great way to manipulate your FICO scores in a positive direction by paying those credit card balances down to zero to 10 percent. Honestly guys it's the best place you can be right before you go in. And again not 30 to 60 days before you get to apply for a loan and pay down as low as possible.
So is there a little you know we kind of discussed this a little bit for the viewers. Is there a trick say they don't have the funds to pay those down. What what's the next thing they can do.
It's a great question one of the things you can do if you have good payment history with that credit card company you can go ahead and call them and ask them to raise the limits. Now a lot of times I get asked like oh why are they really going to do that. Come on now.
Like what a credit card companies want you to do. They want you spend money. So that's not an invitation to go shopping. But what it is going to do is it's going to give you that bigger break between that limit and that balance.
So then what happens. Say they don't want to go get credit cards. Maybe they can't get a preferred along with some alternative options for them.
So I know a lot of times I talk to people and they're just very credit shy so maybe they went through a bankruptcy or they saw their parents go through financial woes and so they're just kind of scared of credit or they had a sense that credit cards are actually quote unquote bad or installment loans are bad. They say I've everything I've got.
But understand that you're if you don't have trade lines then FICO has nothing to grade you offer. So it's kind of like if you don't turn your homework into your teacher she has nothing to grade you offer. So you're not going to have a score or if you do have any type of score it's going to be very very low. And if you don't have trade lines the only reason why you going to have a score is if you have some type of collections. So you want to make sure that you do have credit cards. Just be responsible for him. You know if you have a you have a shopping problem or some like that you obviously don't take your credit cards into them all. If you love shoes you don't take your credit card into a shoe shop. I can't. That's me. Yes. So anyway. But you want to make sure that you do have trade lines or you're going to pay extremely high interest rates if you do end up having to get some kind of loan.
If you don't have credit cards a lot of times you can't rent vehicles your insurance rates are going to be extremely high.
There's some time in the military they're unable to move up in rank if they don't have high Vargas score you will not have a high score if you do not have to read minds. I cannot stress that enough. So you just kind of have to play the game guys and it just it is what it is. Be responsible.
No your weak points and avoid those like I do it shoe stores. Everybody knows that knows me. But you do need to write lines or you're not going to happen by the score. OK. And then I'm just kind of wrapping things up.
So of course we love what we do but what what are they supposed to be looking for in a credit repair company. We're not trying to push credit Lawson or on them but. What what should they do. They need to do their research of course to figure out what what's good and what's not. What should they be looking for.
Yeah I'm glad that somebody ask Is that so important or so many different options out there for credit repair and if you don't know what you're looking for sometimes you can get into a situation where you're paying a lot of money and it's spread out over a long period of time and nothing really happens. So it's really important when you're going out and you're looking for a credit repair company that you actually find someone that is actually a law firm. And I'm saying it like that not to be condescending but there are companies out there that have the word law in their name and trust and believe they're not a law firm. So I can only speak for ourselves but we actually have five attorneys in-house and staff that work all day every day going up about you know against the big guys. When I see big guys I mean like Transunion Equifax Experian. Those are the credit bureaus and they fight for the little guys. So you want to make sure that they actually are a law firm. The other saying that you want to do what you want to make sure that you're only paying for results. There's no reason for you to pay a monthly fee every single month to hope something happens. Why would you do that. So for example again with credit Lawson or we only charge for what we're able to remove from a credit report.
So if we go after 25 collections and only remove 15 we're only going to charge for the 15 we removed not the 25 we went after and then speeds another thing too there's absolutely no reason why credit repair needs to be drug out for a year year and a half anything like that.
Yeah they're trying to get the train move into a house like today. Right.
Exactly. So you can sign up for another credit repair company if you want but then you're looking at a year year and a half hoping that something happens. So our average turnaround time is anywhere between 80 to 120 days. Now if one of our clients need to establish credit that's just time on the clock because remember as I said earlier you want to make sure that you have your credit established for about nine to twelve months or to really help.
And then also for you to be able to be approved for a home loan. So it's really important and vital that the credit repair process shouldn't be long and drawn out and excruciating it really shouldn't. I mean it takes a little work.
A little bit of skin in the game. We need our clients to cooperate with us and do what we tell them to do. And then the other thing that's interesting is a wreck regular credit repair company a consumer can actually do more than what they can. So that's why it's so important it has to have that lobby. So I'm not saying you have to use us. What I'm saying is that when you find somebody make sure you're only paying for results make sure they do have. They are really are a law firm and they have attorneys there in-house. And make sure you know what you're getting into. Don't don't get caught up on the phone when you listen to a sales pitch.
So just to kind of recap or to wrap it up.
You know we are always about education and continuing to help clients because we don't want to have repeat clients. So we do things like this where we're continuing to educate. We really want to think less mortgage for asking us to be part of this this week. Yes. Thank you. And then the other thing too is if you've got any questions feel free to reach out to us at anytime. Visit our Web site w w w dot credit law center dot com. We're constantly educating.
We've got blogs follow the Facebook Instagram whatever you want to do. We are never going to push our company on you. We want you to come to us. If there's anything that you've got questions on our advisors are always there to help. And again thanks for having us this week. And you guys have a great weekend.
Question: Does every account go into a dispute? No we don't go in and just challenge every item on the credit report. A lot of credit repair companies will they do this because during the investigation process some negative information can be masked from the credit score and you see a quick boost. This is a short term fix to a long term problem. Our credit advisors are experts at going in and auditing the credit report and finding missing or unverifiable information. This causes the bureaus to do an investigation. We use the mistakes we find as leverage to negotiate deletions. This is how we use the law to help you improve your credit report in a quick and affordable way.
Fact the fact is the Fair and Accurate Credit Transaction Act. This is an amendment from 2003 to the FCIC or the Fair Credit Reporting Act. And what this does is it gives some awesome benefits and really powerful information to consumers. Fact is what allows the consumer to get a copy of their credit report every year you hear annual credit report.com. Fact is that regulation where that came from the also with fact and it did some really awesome things for being able to rebuild after identity theft and also some things to prevent identity theft inside of this amendment. So really really cool stuff. But the most important thing that I feel came from fact was the requirement to disclose the reasoning codes that are impacting credit scores. Now these reasoning codes are on every lender report.
So if you've got a lender report with a five go score on their fact it requires them to be there. And these codes are there for you the consumer to understand what's impacting your credit score and for you the lender to help explain that to the consumers. So these codes are going to tell you what's impacting your score and why. So lenders use this to ensure that you're not giving consumers bad advice consumers. You use this to understand what's impacting your credit score. So if you've got more questions about factor or the reasoning codes that are making up your credit score. Give us a call one of our credit advisors would love to help you.
Myth number four is keeping your credit card balances at 50 percent will improve your credit score. The fact is the closer to a zero balance the better your scores. Most people don't realize your scores are ascending not descending meaning you don't start out in a perfect 850 and then lose points based on your usage and payments. You start out at 350 and start gaining points based on how you use your credit.
I like to explain it like grading a paper when it comes to credit card balances. If your credit card balance versus a limit is zero to 10 percent you're grading in a 10 to 30 percent you're grading it to be 30 to 50 percent you're grading in A C and 50 percent above your grading in a D. And any late payment you have in the last 24 months you're grading an F.. We have to understand is what a Fargo score truly is. Is grading you on how likely you are to default on a loan in the next 24 months. So when you're thinking about credit card balances remember ascending not descending that closer to a zero balance the better your credit scores.
Myth number five you only have one credit score. The fact is there's over 50 different versions of your FICO score and when you purchase a credit score online not only will you be shocked to know it's not the same as what the lender uses but more than likely the scores you see online are much higher. These are vintage scores and while the same factors are used in calculating these scores different weight is given when compared to Fargo's score calculating.
The ECOA: The Equal Credit Opportunity Act. The ECOA was enacted in 1974 and it's a law that makes it unlawful for creditors to discriminate against the applicant for race color or even religion. Also what the ECOA does is it requires them to code the personal liability of the account holder. So take a look at these codes. These guiltier extremely important to have a good understanding of especially when reviewing negative information. For example if you've got a derogatory account and the account holder is listed as an authorized user this is something we know that's easily taken off the credit report because authorized users are not contractually liable for the account. They only have access to the account also when reviewing credit reports with consumers.
It's extremely important to have a good solid understanding of the ECOA because this is where we find a lot of mistakes and consumers are easily confused. They think an account is one way and it's actually the other. So when reviewing accounts have that good solid understanding of the ECOA. So you can explain how the accounts reported rather than how the account the consumer thinks the account structured. So if you've got more questions about the ECOA give us a call. One of our credit advisors love to talk to you. We're here to help.
MOP: manner of payment. This is the status of the account regarding how the payment is being made. This is the most common area we find mistakes. So first let's break down these ratings you've got 0 4 4 2 new to rates. You've got 1 is current 2 is 30 days delinquent. 3 is 60 days delinquent for ninety five 120 6 150 or greater. 7 is that wage earner a bankruptcy plan aid is the repossession or foreclosure. 9 is that collection or charge. So now they've got those status. Let's look at the types of accounts you can have in combined with the status you've got.
Are for revolving ie for installment 0 4 Open M for mortgage C for line of credit y for collection and blank for unknown right.
So now what's going to happen are these two factors are going to combined to give you a rating that you're going to see on your lender reports. So you're going to get that number in that letter combine and you're going to see examples like IE 9 4 or 9 or I O. And so on and so forth. So that's the combination of the type of an account with the IMO P or the status of it. So now I'm going to show you some common mistakes. This this is the most common area that we find mistakes on credit reports and these mistakes are impacting credit scores in a way that they should. So here's even the stakes. They're combining I known they're calling a collection an installment loan when it's really in a collection status and they're reporting past due which they can't do. You've got another account here that's coded the same way. You've got it coded as an installment loan. When it's actually a collection which is therefore reporting past due. So this is the most common mistake we see on credit reports. These are the mistakes that have allowed us to help over 30000 people since 2011 repair their credit in a quick and affordable way.
So if you've got more questions about the MOP rating or how we can help give us a call our credit advisors would love to talk to you. We're here to help.
Myth number one. Credit reports are accurate. The fact is the Federal Trade Commission or otherwise known as the FTC released a study that reported that over 79 percent of all credit reports containers. 79 percent. There's no other industry in the world that could get by with mistakes Seventy nine percent of the time except for maybe the IRS and Letterman. The reason there are so many mistakes is due to the way they gather the consumer's information and the way the bureaus and collection companies misreport items on the report by law. Credit reports have to be timely accurate and verifiable and when they're not credit Lawson or uses the law as leverage to gain deletions on consumers credit reports.
Myth number three closing credit cards will help your credit scores. Most people think your credit score is only based on how you pay your bills. Actually payment history is only 35 percent of your score. The other 65 percent is the amount owed new credit. Length of credit history and types of credit used. Even if you don't have negative items on your credit report if you close a credit card you are impacting 65 percent of what makes up your FICO score to keep it simple. You want to keep your credit cards open until your grandchildren have children.
Myth number two: paying collections will help your credit scores. Fact is there's less than a 2 percent difference whether a collection is paid or unpaid. Most weight is given to how recent the activity. For example let's say you have a four year old collection with a balance of three hundred dollars. At this point it has very little impact on your credit scores.
However if you pay the collection you now have a collection activity within the last 30 days that has far greater impact on your credit scores. I'm not telling you not to pay your bills but understand pain collection is not going to help your scores or remove it from the report. It simply shows a paid collection versus a collection.
Now and getting mortgage ready process. Let's talk about insurance throughout the whole mortgage process. You're going to hear a lot of different insurance terms and insurance types. We're going to break down some of the simple ones you're going to see and hear and most common but also to this presentation you're gonna have attach the report from the CFP that will go and very very fine detail explaining each and every term you can see. First let's talk about mortgage insurance. Mortgage insurance you're going to hear em IP which stands for mortgage insurance premium that can be upfront and monthly for FHA loans. You're going to hear about PMI which is premium mortgage insurance which is typically attached to conventional loans with a loan to value greater than 80 percent. Keep in mind this isn't an insurance for you. It's an insurance for the lender to insure that they don't lose money if the loan was to default. So that's your mortgage insurance brief explanation. Now we can talk about Lenders insurance and title insurance once again this is another insurance type and an insurance policy that's required in the mortgage process that doesn't insure you. It ensures that the
title to your home is free and clear and clear of any other leads. This protects you of previous owners coming up and arguing the fact that the person that sold you the house doesn't have the ability to sell the house but it ensures the fact that you have clean and clear title all of this will be talked about at your closing.
And to really kind of close out the mortgage process there's no better way to do it than there is to talk about the closing process and explain what that is. So at the very end of the mortgage process the paperwork is going to be prepared and provided by the lender sent to the title company the title company is researched the title in deed your property and gathered all that paperwork. And now it's time to close. You're gonna go to the title company or closing agent and go through all of these documentation all the documents that we've talked about sign everything that you've prepared and actually close on the loan. This is exciting time in the process you've almost bought a house not quite bought it yet because the loan still has the fund.
We talked in other videos to make sure that you don't do things such as major purchases or change jobs during this last little process. The last very into the race that crossing the finish line is when the loan funds. So make sure that you follow the do's and don'ts review your process understands all that understand all the terms that are being used throughout the whole mortgage process and be prepared and know and feel comfortable that you are now mortgage ready.
All right now let's talk about the dos and don'ts while getting mortgage ready. This video is going to take you on some major things you do and don't want to do. What are the main things we talked about in the other video was no large deposits or if you've got a large deposit make sure you're prepared to source and season it. Make sure we're meaning source where the money came from season how long it's been there. You also want to make sure that you don't do any job changes or at least any unnecessary job changes during the mortgage process when you're getting mortgage ready.
Changing jobs can actually impact your qualification. It can change the way your income is calculated. Also can make the underwriter change decisions on what information is used to qualify. So if you've got to make a job change make sure you're communicating that with your lender so they can be prepared for that. But if it's not a necessity make sure you don't make that job change during the mortgage process and the mortgage process all the way to funding. Even if you close on Friday your loan might not fund it until Monday. If you make a job change during that. That is a huge problem with your lender. So same thing wait until your loan is funded before you make any large purchases. Really important not the day you close but the day your loan is funded is if you close on a Friday sign all the paperwork your loan still might not fund till Monday. Make sure you don't go out and buy the furniture before you actually own the house.
Because when you go out and use your credit cards or make a large purchase purchase it's going to if you pay cash it's going to lower your assets and your reserves that you're using to qualify if you use your credit cards it's going to increase your credit card balances which can affect your credit score which can affect your mortgage insurance your mortgage interest rate and all the way down your qualification. So remember also during the review process of your credit report you don't want to run out and just pay a collection just because it's on your credit report thinking that it's going to increase your credit score. Your lender might make it a requirement. And if so you definitely need to follow those lender's instructions. But when you're reviewing your credit report like we talked about in the other video make sure you don't just go out and pay that collection. We've seen someone gotten pay a collection it actually lowers their credit score and causes problems during the mortgage process. So make sure you're communicating all this. And remember the dos and don'ts about getting mortgage ready.
Getting mortgage ready in the process. Now we're going to talk. We've talked a lot about credit and reviewing your credit report. Now when I go through the top five credit myths that are out there that most people don't know. So number five you only have one credit score.
Most people don't realize that you have more than one credit score and don't understand that the lender is going to take an account. All three credit scores and use your middle. They're going to knock off your high score and knock off your low score. They're going to base your pricing and your interest rate and your qualification off your middle score. So it's important to have all three as high as you can possibly have.
Myth number four is credit card balances. People think that if I pay my credit cards on time I'm gonna have a good credit score. Well when it comes to your credit card balances remember that if you've got a high balance that same thing is almost is having bad credit.
So you want to keep those balances as close to zero. I like to explain it this way. Remember as you're grading a paper in school. Yes. Zero to 10 percent balance. You're going to be an A student 9 percent you're going to be an A minus zero percent you're gonna be in a plus. So 10 to 30 you're gonna be a B student 30 to 50 you're gonna be a C student 50 percent or more of that car used and you're gonna be a D student still get a passing grade but your score is not as high as it possibly could be. So credit card balances lowest possible. Make sure you remember that in credit cards can have a huge impact on your score and it leads you to myth number three that closing a credit card is going to increase your credit score during the getting mortgage ready process. A lot of times people make this mistake they go and see that they have three or four credit cards open and active and they go close them out because they're not using them. This is a myth. You don't want to do that. That is not going to have a positive impact on your credit score. In fact it's going to shorten your time in file and show that you've closed an account out and affect your utilization ratio meaning your available credit.
So if you've got those credit cards out there and you're not using them in regards to your credit score keep them the older they get with the lower the balance the better you're gonna score. So number two really important we've talked about that in several of our videos today don't pay a collection. It's a myth. People think that this paint a collection is going to improve your credit score and in fact there's less than about a 2 percent difference whether collections paid or unpaid. The most weight's given to how recent the activity. So if you pay a collection that's three or four years old now you're going to have collection activity. Just last month paying that collection is going to have more of an impact than it was. So keep in mind don't just go pay a collection thinking it's going to have a positive impact and myth number one.
Always my favorite credit reports are accurate. Don't take my word for it. Look at the FTC report that reported over seventy nine percent of it reports they audited contain errors. Wrong address wrong name wrong account information bad enough that actually can lead to a turndown as opposed to approval. So take off these five myths in consideration when you're getting mortgage ready and remember them. It's going to help you get mortgage ready and move through the process a lot simpler.
Now in the getting mortgage ready process let's talk about collections and facts about collections. Most people be alarmed to find out that over 31 percent of credit reports contain a collection in that 31 percent over 67 percent of those collections are medical. It's alarming. They come from unpaid bills rather than unpaid loans so the average is not someone that ran up a credit card and didn't make a payment or didn't make a payment on a car loan. It's from bills they chose not to incur. No one chooses to go to the emergency room or go to the doctor's office and that's where more than half of the collections are coming from keep in mind also that the average nonmedical collection is three hundred and sixty six dollars and the average medical collections only two hundred and six.
So these aren't huge amounts of money when it comes to mortgages and purchasing a home. But these can have a huge huge impact. So like we discussed in our earlier video don't just run out and pay that collection if you see it on your report make sure it's accurate. Make sure that it should be there and if it is there try to negotiate a payment for deletion if you're unsuccessful in doing that. Reach out to a professional a law firm that can actually help walk you through that process. Use the the the credit repair process as leverage to get the items deleted because paying that collection doesn't mean it's going to have a positive impact on your score. And remember most people don't realize that these items are here.
A report that came out by the Medical Billing Advocates of America reported that over 80 percent of medical bills contain errors. Now over 80 percent of these bills are containing errors. That's how they're getting into the collection. The collections are getting into the credit reports. They see that they've got a primary insurance and a secondary insurance. And at the end of the day neither insurance company pays it because of how it's filed. These are how these collections are making it on these reports. So make sure and remember like we've discussed before. Review your credit report make sure that it's accurate. Contact a professional if you need help. Look forward to more videos and more information. Thanks.
All right. Welcome to today's video. Today's videos about get mortgage ready. We're gonna teach you some tools and tricks and tips today about how to prepare and get ready for a mortgage. Face it you get ready you plan for winter you you'll get excited about summer and you plan for vacation. A mortgage is a very very big part of the real estate process and you want to plan and get ready for it to make sure that you're putting the best foot forward. So today we're going to tell you how to do that first and foremost. You're gonna need to prepare your financial documents to some a list of some of the financial documents you're going to need. You're going to need your last two years tax returns you're going to need your last two years w 2s. You're also going to want to collect 90 days where the pay stubs all of these documents you're also going to want to review. You want to make sure that you have all pages of your tax returns. You want to make sure that you have all pages of your bank statements bank statements are really important you're going to have to explain any large any large deposits to make sure that where they come from. So if you're preparing and saving fantastic you're going to be able to need to explain where these deposits came from. You're going to hear a lot of verbiage or terms from the lenders we've attached a document here that is free download for you that you can actually explain and expand Spain a lot of these terms.
One of the most common one you'll hear is source in season your down payment or large deposits. Source in season is sourcing where the money is coming from in seasoning is how long you've had the money. So if you've had a deposit in the last 90 days you're going to have to source where that came from. This is really common when you're looking at your down payments which is one of the other things that you need to prepare for is your down payment. Find out and figure out and plan where it's going to come from. If mom or dad or grandma and grandpa gonna gift you the down payment. Be prepared to be able to source in season that and when that's their money giving to you they might have to source where it comes from and provide the documentation of the history of that. So parents sometimes eyes that run into a problem with that. Or Grandma Grandpa don't want to provide you the bank statements they're just giving you the money. This is really important in the process you won't understand these things. Once again the attachment that we're providing is going to explain all this to you. Please download it and review it with any questions.
Also 2 You want to get a copy of your credit report. Review your credit report. It's extremely important you know when this point in time you want to make sure that your credit card balances are as low as possible. So pay those cards down. Get him as close to zero as you can. Also review that those balances reported correctly on that credit report. Another really important part in reviewing the credit report is make sure that you don't have any negative items on information on there that shouldn't be there or try to rectify the negative items that are on there before you start the mortgage process. We're gonna talk about collections also and explain what you can do to be able to remove those to be able to increase your score before the mortgage application process starts. So you're going to be able to get the best rate in the best interest possible so really important one to review. Review your financial documents you need a two year history worth of tax returns and w 2s. You're gonna need 90 days worth of pay stubs. Make sure that you have all pages to all documents get a copy of your credit report. Review it make sure the balances are reported correctly. Get those credit cards paid down as low as you possibly can. Also make sure that those negative items that are on there if they are on there are reported correctly. If not work to challenge those when it comes to collections make sure you don't just run out and pay those collections.
In this review process where the most common mistakes we see consumers make is that they see a collection on there and they think OK well I'm gonna fix that before I get started. They just pay that collection well we'll go in more detail about collections a little later but don't just pay that collection. Paying that collection and making them update that on your credit report doesn't mean it's going to have a positive impact on your credit score or improve it in credit scores are critical in today's mortgage market. It's going to determine what interest rates you pay. How much mortgage interest you may or may not have in the terms and conditions of your loan. So the higher the score the better the easier the mortgage process is going to be. So review your financial documents prepared the last two years history and you're on your way to getting mortgage ready.
Hello everybody. Thanks for checking out our video today about how to recover after bankruptcy. This is one of the sore subjects but one of my favorite subjects as well because we can really really help consumers recover after a bankruptcy and a lot of times they get really really bad advice. Most people that go in and file a bankruptcy it's a long decision it's a tough decision. They counsel you know with friends and family what to do. They actually talk to an attorney and what happens most of the time attorneys give them really really bad advice and they ask you what's it going to do to my credit.
And the attorneys say it's going to trash your credit you're you're not you're gonna have bad credit for a few years and people leave there with the relief of the bankruptcy but then think that they're not going to able to do anything for a couple of years. And in fact that couldn't be any further from the truth. There are lenders that target people that just get discharged in bankruptcy. And the most important thing you can do after bankruptcy is one reestablish your credit no credit is the same as bad credit especially after bankruptcy. So make sure you re-established. There's there's lenders out there that are focus on you just because you discharge in bankruptcy and then to make sure you take away your report and the information is reported accurately. Most bankruptcy reports that we see are some of the most contain the most mistakes.
There's certain things lenders have to report in regards to the bankruptcy. They have to honor the stay violation which is what happens when the bankruptcy file. Also to their limited in what they can report after the bankruptcy after it's filed after it's discharged the way that the accounts are coded. So make sure it's reported correctly. If you don't understand all that contact us we'd love to explain more help you recover and re-establish after bankruptcy. It's not the end of the road. It's a new beginning. So reach out to us. We'd love to help you in any way we can. Contact us. Remember you don't pay till it goes away. Talk to you next time.
Hello. Thanks for checking out a video at Kurdish law center today on coast hunters. Well we want to do today is explain the pros and cons and make sure you know what you're getting yourself into before you co-sign. Or if you're going to ask someone to co-sign so you understand what you're really asking. There's a lot of myths out there that people don't understand when it comes to cosigning and they need to you know first and foremost what it means is you're really signing on the dotted line. So if someone's asking you to co-sign realize you're just as liable as they are a lot of times it's a car.
Sometimes it's even a mortgage and it's where the lenders are asking they need someone with deeper credit or more income in order for them to take the risk of doing the loan. It's not a bad thing. A lot of times you can help people within credit files obtain better financing better interest rates better terms but if you are the cosigner make sure you understand that it's going to report more than likely report to your bureau. If this person makes a late payment that's going to affect your report just as if it was your own account. So make sure you really trust and understand what the other side of that is look at it is talk to the person about this asking you to co-sign. Talk about their credit profile. Have a consultant take a look at it see what we can do to help improve their profile.
So cosigning is not all bad but understand you're just as liable as the person that's asking for you to co-sign. And if you're the person asking to co-sign you know no one ever really wants to do that. You like to do it on your own. Reach out to credit Law Center. We can take a free look at your file. Explain what you need to do in order to improve your buying power which is one of our mottos here credit Law Center along with you don't pay till it goes away. So thanks for watching the video. You can read more information about it below. Give us a call. Contact us at anytime. We'd love to help you explain the process and remember you don't pay unless it goes away.
What we do is we actually help consumers improve their buying power by challenging the negative and inaccurate information on their credit report. We use that and in our process when we find mistakes we use those mistakes as leverage to gain the deletions of settlement of those counts for those consumers. The main thing that separates credit loss enter from any other credit repair company is we actually are a law firm and we use the law to help assist the consumers in the credit repair process.
So never worked with anybody that charges an upfront fee or as a monthly membership. I only worked with companies that are actually going to charge you if they get the items fixed and when they get it fixed and that's what separates us from most all credit repair companies here at current law center we truly believe we're only as good as the people we hire.
We've got an awesome team that's always growing with us and the people that we're looking forward to join our team are actually someone that can help consumers and enjoy that each and every day of helping consumers change their lives in regards to their credit report. If you've been turned down for financing Contact us today. We can help. We're the people you need to talk to. We help people like you. Each and every day Our company motto is helping improve people's buying power and you don't pay unless it goes away.
Back we are here at credit loss center and I am with Darrell Sanders one of our lead credit analyst. And today we're going to talk about the difference between go and manage scores. And the reason we've chosen this topic is many of our partners and some of our consumers have asked us this they asked why do I get different scores when I go online versus when I have a lender polite so there. Let's get right to it. What in the world the difference.
Well first off I really think it's great that the consumers are actually going on and looking and trying to be a little more educated about the home buying process. That being said that does raise some questions. The difference between FICO in Van edge plus or you know whatever credit monitoring company somebody is with is really like Coke and Pepsi. OK there are different recipes different scoring models for things like that for instance FICO runs from 350 to 850. That's their range of scores and the advantage depending on whatever model they're using runs from 450 to 950.
OK. That's awesome. So what's the problem there. There's a difference but what's the problem in it.
Well obviously one hundred point difference is a huge problem because what that does is it kind of gives couldn't consumers a false sense of security on what their actual credit score is. OK I get it all the time. Hey while my score is a lot better than what so-and-so pulled in.
Well you've got to remember that you know the five go score is going to be the gospel whenever it comes to getting mortgages or car loans or what have you. OK.
So you talk about the vantage you actually created the vantage score and what is that is go create created somewhere different or what's the difference.
Well the credit bureaus are the ones that created the vantage scores and you know I think there's plus scores. Course there's there's tons of them out there. And the reason why they did is because Psycho came around first and they charge no money. Yes absolutely. OK. So the bureaus can save money and create their own make perfect sense and they're created in two different locations.
Absolutely absolutely. So why do lenders still use Psycho and the bureau as it sounds like create their own scoring.
Yes pretty much because Vika was there first. I mean lenders for a mortgage lender they still use spike version for. I mean there's a spike of 8 like 0 9 but again it all comes back to money. So you know it costs these know you know you're Fannie Fannie Freddie. So the conventional lenders the government lenders you know FHA USDA V.A. all those guys it would cost them so much money to upgrade their their software to cover you know what I mean there's the ever changing Flaco model that you know they just decide to stick before. So think of it ain't broke don't fix it.
Well. That is what it is.
Well you know with all this confusion and different scores everywhere you turn what's the best advice that you have for our consumers on when they get to pull their credit or purchasing a score online.
Absolutely Mike. My best advice is you know pretty much just don't pay any attention to the scores that you get from you know your credit monitoring companies. If you put the two credit reports side by side the content will be the same. But the scores will be totally different. So do you not pay any attention to the scores. Definitely look through your credit report take note of the good obviously and then look for the negative and accurate information that we can take care of for you.
So that's one of the things that I like to do whenever I talk to my clients is talk about both how we how they can make the good better and hopefully we can make the negative and accurate information go away so we can get everything cleaned up and you know a nice little bow and mortgage ready a lot sooner than they thought to buy that home. Absolutely.
So what I'm hearing from you is content is key. Yeah really. Content is at the content on your credit report is the most important. And if you get that under control the score whether vantage or if I go is gonna take care of itself.
Absolutely it will. So we do the. We take care of the bad. They take care of the good.
Everything just works out for the good. Absolutely.
So if there was something that you heard today that you'd like a little bit more information on or if you would like to know how to maximize your score or even just analyze the content that's on your credit report please contact the person that shared this video with you and they'll be happy to go over your options. Darrell thank you so much for joining us. Absolutely. Folks until next time.
I am live with Tom Adelman. He is our lead attorney here at credit loss center and you've been here since just about opening 2009 right. That's correct. Perfect. And so Tom tell us a little bit about your legal team.
Well we've got four attorneys all together and we've got almost up to eight or nine paralegals now and we're in a little bit of a specialty area here in the consumer rights law is what we do. And by consumer rights people always even get that confused a little bit. All that means is we assist consumers who are having problems either with their finances their credit score or even as simple as debt collector harassment.
OK. Perfect. Perfect so we're going to talk about a couple of areas of that today and answer a few questions right now that we've gotten. The first area is really just investigating the credit reports and the errors because that's where we find them.
Tremendous right now unfortunately your credit report errors are prolific. It's there's some studies saying one in five some studies say one in eight people have errors on their credit report and those errors can keep you from getting their home loan you need the auto loan or even paying more for insurance or any other basic financial vehicle you purchase. So what we do is we go back and we investigate with the credit reporting bureaus to make sure the information on the clients report is accurate if it is accurate. We ask them to either fix it and or remove it if they feel to do so. Then we institute a federal lawsuit against them. Oh really. And the best part about those is obviously it's helping get that issue corrected the consumers a lot of times by the time they get to us they've tried to do it themselves a number of times have been unsuccessful. So what we were able to do is get in there with the power of an attorney and the law firm make sure that these items are corrected part of that under that particular federal statute. Actually attorneys fees are paid for by the opposing side. So our clients will have to pay us anything.
I think it was really a mistake and cost a client sometimes hundreds if not thousands of dollars in interest and that's what people fail to recognize even a half percentage point or people in the industry get this half percentage point or three quarters of a percentage on a 30 year mortgage is going to be a significant amount of money. Sure. And that little old charge off that shouldn't be on there or even someone else's information that they called emerged mixed file or merge file on your report can be just very detrimental.
So let's talk a little bit about all that's in collections you mentioned. So let's talk a little bit about those old debts and issues there.
You bet. Have said as a firm we get a quite a few of these as well. What will happen is an old debt you may think is gone or you haven't paid on or even don't remember. Also in pop up and the reason and with a lawsuit and the reason pop up as a debt buyer has thought that from the original creditor maybe the original bank would be one of the major banks or a major credit card company. They'll write off your debt and eventually it'll be charged off. And then out to be bought and buyout out to be bought is debt collecting companies will buy that for a percentage or even pennies on the dollar and they'll turn around to file a lawsuit against you. So we do we jump in there and determine either if that's something that we think we can help the client settle the account and get it to where it's not on their credit report or defend them on the lawsuit in court and try to resolve the matter completely. By winning and how we do that it's just like I kind of described it to being a clue they have to build provide when they got the debt and how it has gotten to the point it is and that they can properly see it because a debt collector is not the credit card company.
So there is a big discrepancy in there in how it gets to court and the original quickly there about that negotiation that is a piece of what we do here and sometimes I have clients that alas can't negotiate at my. But with attorneys and more a little more effective I would say I would totally agree with that statement.
We're we have some pretty good success with that negotiation. The power of that is we're able to as it as the attorneys get in there and deal directly normally with opposing counsel the opposing attorney we're not dealing with a debt collector on the line or someone managing their accounts we're actually getting to the decision makers generally and that's what really gets us attorneys sometimes. And then since we do utilize the purposes of a trust account to have those client funds in that frankly the debt collector knows that are not writing them a check or doing a payment plan of eighty four dollars a month the next 36 months when they deal with us is done I say OK.
So that's why. That's very interesting so that collections are back creditors.
Are they out there is by far the most entertaining part of our job as the attorneys here what we get is significant amount of debt collector harassment and that can take a lot of forms that can take sending a letter to you or to your employer it can send could fall in calling your cell phone at all hours of the day or night contacting your parents or family or friends. There's certain ways that debt collectors can collect debts and the federal government mandates the procedures they're supposed to use if they fail to utilize those procedures then they are subject to a lawsuit. And as that's another federal guideline attorneys fees are paid for by the opposing side if we're successful in that as well. So that's another great we can help the consumer if they're getting harassed or they're getting something that just doesn't seem right. More than likely it is a violation of the Fair Debt Collection Practices Act.
So yeah the laws that are put into place that we leverage obvious right.
And that's the whole point. These laws are for consumers and there's just not many people consumers that know their true rights on this without sounding a at risk sound cheesy. We really do that we're a full service law firm who helps consumers with consumer related issues with its financing or incorrect items in the report or being sued by a debt collector or being harassed by debt collector. These are such common things that people have to deal with but yet there's not a whole lot of attorneys out there that have the resources or skill set to do it and that's something we take pride in credit Law Center as we know how to attack these items and how to protect consumers.
Right and that's really all we've seen here. Yeah. And so you have to kind of reiterate that it makes it makes it very specific and we're very intentional with what we do because we don't get all the attorneys we're at.
We're not running helping people with the worst and doing all that we are kind of a one trick pony and we do know how to do and I believe we do it very well.
Well guys Tom thank you so much for your time. We really appreciate that. And just a little tidbit of course kind of a legal minute if you would on how we are effective and why we do utilize the law to help consumers with their credit. And as you can see it's a lot more than just the credit report itself. Sometimes it does end up in the court courtrooms more times than not sometimes. So if you liked what you saw here or if you'd like to know more information about our services please contact the person that shared this video with you and they'll be happy to go over things. Tom thank you so much.
And folks until next time we'll see you soon.
Welcome to who is Credit Law Center. We are with one of our senior analyst Paige White.
Welcome. I'm glad to be here today.
Thank you. Thank you for taking some time. Paige is with us for about two and a half years now and has spoke with on board and helped hundreds of thousands of flyers at this point with their credit repair and meeting funding Wolf. Yes a blessing that I have. I love to help people. So we are going to take a few minutes and Paige is going to tell us a few things about what she's learned some misconceptions and just really stories about what to expect with credit repair. Absolutely. So let's get started. First of all what are some of the mistakes that you see consumers make either coming on board the process or throughout the process.
Well that's actually an excellent question because our goal is to ultimately educate our clients why we're doing credit repair. So one of the first things that we're going to do is teach our clients how to build a healthy credit profile. And so that's where some of the faith actually come from. OK. I would say one of the top ones is we will have our clients establish some credit and get a couple of credit cards or secured credit cards if that's what they need. The downfall is what happens is they get the credit. They haven't had credit cards before and then they go out and max them out. And so we do try to educate our clients to make sure they keep their credit card balances low but people get excited. They have a credit card they're going to use it for you know school supplies or a new outfit for their kids usually night for themselves. But what that does is it tells the algorithm what the credit bureaus to drop their score because it's an alert and the alert is going to tell them oh they're maxed out their card list run their score. So it actually will backfire for you to keep those balances low. Another one is going to be how shopping. I know people are super excited to go get their home and they should be. That's what they came for us. What most people did. So they're super excited but they're going to go out they're going to ask the realtor to show them around and they're going to find their dream house. What's going to happen is are not ready yet. You didn't get bad credit overnight so you're certainly not going to get good credit overnight either. Do you want to hold back on the house shopping until you're ready. But we'll get you there. I would also say late payments fortunately one late payment can drop your score as much as 100 points. Crazy.
Now we've got a fact typically on that very day oh years is it more.
Well I mean that will stay on there throughout forever pretty much until the drop off point but it really affects you for two years. Wow. Yeah. So it's one of those things you definitely want to look out for never any late. But I would say the last thing would be car shopping. Your credit's getting bad or you might want to go get a new car. Maybe you're just in a position you definitely have to have a new car. Her car dealerships will run your credit through 10 to 15 companies in one visit. So let's say the three different dealerships you could have up to 45 and a day. So be very clear with the salesperson as well as the financial person. They're only allowed to run through one or two people and it's just keep yourself safe. So I would say those are probably the top mistakes that people see.
Awesome awesome. So misconceptions of credit repair are there a few out there of credit repair companies and what a client really is.
Yeah I mean I would I would definitely say there's misconceptions to us. There are some realistic concessions to others. OK what I mean by that is credit repair as an industry has a really bad word if you will. So in a couple of different aspects one aspect is that credit repair can be perceived as a rip off. You're spending money on something that the client could actually do themselves. OK. The reality is there are things that you can do yourself but at the end of the day I would say that the average playing has about a 20 percent success rate. The average credit repair company is about a 30 35 percent success rate. So we have about a 70 percent success rate. No kidding. Yeah. It's amazing what we can do for our clients is going to be higher on some things and lower in the other. But a month of board about 70 percent. So we love what we do. We are a law firm. That is definitely one of the bigger factors that separates us. Yeah. There are companies out there that have law in their name. They're not attorneys are attorneys actually fight on the client's behalf. We will be able to do things for our clients that other companies absolutely cannot do. OK. But the other aspect of what we do this separates this out from any other repair company is that we're paying for performance. Most of this credit repair companies out there are going to charge a monthly fee. They have absolutely no incentive to speed things up for you with the client.
Our incentive is that we don't get paid unless we get things off. We clearly want to do whatever we can in our power to make sure our client is taking care of. At the end of the day that's how we make money as a business. So we're certainly going to try to benefit everybody in the picture. So those are I would say that's one aspect of the misconception. The other one would be the fact that a lot of times people might look at a credit repair person and say that person's lazy. They don't actually deserve credit. Because they don't pay their bills on time. That's almost as far from the truth as possible. I would say 90 percent of our clients had like happen to them. I can look at some credit reports and actually pinpoint a time in their life that they had a struggle. I might say oh looks like in October 2014 you had a tough time and they will literally you know sometimes actually break down in tears and say Yeah actually my mom passed away or I lost my job when my kid was in the hospital. The thing is that life happens. Absolutely. These are circumstances and people get beat up by these numbers that dictate so much of our lives. But it is not who we are as people. And Christine I'm actually a perfect example of what I'd like happen. So I was a client with the credit Law Center prior to working here and I absolutely fell in love for what they were to do but for any of you out there that do know me you know that I have extremely high integrity and most of my life I've had more than one job at a time. Mostly two jobs.
Oh my God kids. This is my only job right now.
But but at the end of the day my credit scores were not indicative of who I was as a person or who I am and the person I am in 2007 we lost our house to foreclosure because our income was more than cut in half due the economy slide which many of you through. I lost my mom a year later and I lost my dad seven months after that. Oh my gosh. The year following my daughter was in the hospital for five weeks. She was diagnosed with a chronic disease so needless to say I didn't care too much about my.
Not on the forefront of your mind right.
I'm sure they had nothing to do with who I was or how hard of a work it was like happened. Life happens to all of us. It does. So if you're one of those people that has life happened to you. We're here not only to educate you but to put you back on track to help give you a hand up not. So I would think that probably two misconceptions will go to space.
Thank you so much for your time. I think that we win over some with some really good points here and is there anything else that you'd like to add.
Well I would just say that you know don't don't put your head in the sand. We're here to help people. That's what we love to do. Allow us to be able to do that for you.
All right. So thank you all for joining us once again. I hope you pull something out or if you're out there just wondering if there is help or if there is something that you can do to fix that past that now you know that there is an answer. Please. If you weren't asked additional questions or just want to review contact the person that shared the video with you and they'll be happy to go through that with you. So until my find thank you so much for joining us. And we'll see you soo
We have a couple of different options. We all know about Credit Karma. Many do Credit Karma is a free site. The downfall to it is that it only provides two of the three credit bureaus or credit reporting agencies right.
So you're locking that third. Right. I personally use Credit Karma and I thought that you know being able to get all three of my first because obviously when you loans typically take three into consideration. So we need to know that. So but it's a good guide and it's a free guide again.
The other option is Annual Credit Report dot com. So Annual Credit Report dot com you can go on and get all three once a year for free. It's then it gives you very explicit details about each post and what's going on with those accounts. Now if you've already used your freebie there's some discounted rates out there. There's a site called Free Credit hub HQ. These Amboy dot com. And there you can click and you can get all three of your port your reports for one dollar and that will give you some details. They will also give you those scores as we spoke about. So give you a guide there.
And that is certainly a good option for consumers. So one dollar on that and it's free credit hub. Dot com.
Fines up to 40 million Americans have mistakes on their credit reports last night on 60 Minutes Steve Kroft investigated the scope of the problem and why little is being done to fix the errors.
Ohio Attorney General Mike DeWine has opened his own investigation into the credit reporting industry which for years has blamed mistakes on banks and merchants that provide them with bad information. But DeWine argues the fault lies with the industry for what he says are clear violations of the Fair Credit Reporting Act.
That these companies have a legal responsibility to make sure that the information is accurate.
The federal law says that if you believe that there is a mistake you can go to them and they have an obligation to do a reasonable investigation. They're not doing a reasonable investigation. They're doing an investigation at all.
Every day to one's office fields calls from desperate constituents who can't get the credit reporting agencies to answer their questions or correct mistakes on their report like paid bills listed as delinquent closed accounts listed as open in bad debts that belong to other people with similar names or Social Security numbers.
The problem is not that they make mistakes if they won't fix the mistakes it literally is like this guy behind the curtain in The Wizard of Oz. You really don't know what he's doing. It really is a secret operation that is so hard to crack.
Eight million people a year filed disputes about their credit report which usually requires a visit to the Experian Trans Union or Equifax Web sites. They're primarily designed to sell you premium products not resolve a dispute which is what I was trying to do. There is a toll free number you can call which is likely to connect you to someone on a faraway continent.
Thank you for calling me okay. Where are you located. India. India.
Regardless of where they are or who you talk to they won't be much help.
So really you can't do anything for me. I've just been talking you for 15 minutes. I mean the only thing you can do is to tell me to fill it out online. Yes Mr. Kraft. OK. Thank you.
Besides the toll free number they also give you a post office box address where you can send a letter and documents supporting your claim. In each case it's extremely unlikely that anyone with the authority to resolve your dispute will ever actually see it.
And 60 Minutes tried unsuccessfully to get a comment from the three credit reporting agencies. A spokesman for their lobbying group provided a statement citing an industry sponsored survey it showed ninety five percent of its customers were satisfied with the dispute process
They're not we live in an age where much of what goes on in our daily lives is monitored collected and sold to interested parties are driving records our medical history our internet traffic and most importantly our credit information. A mistake on your credit report can cost you money. It can increase the interest you pay on your loans prevent you from getting a mortgage or buying a car. Landing a job or getting a security clearance. It's not uncommon. A new government study to be released tomorrow indicates as many as 40 million Americans have a mistake on their credit report. Twenty million have significant mistakes and our own investigation of the credit reporting industry shows that those mistakes can be nearly impossible to get removed from your record.
This story will continue in a moment.
Consumer credit reporting is a four billion dollar a year industry dominated by three large companies. Experian Trans Union. And Equifax.
They keep files on 200 million Americans in traffic in our financial reputations. They make their money gathering information from people we do business with in selling it to banks merchants insurance companies and employers and they use it to make judgments about our credit worthiness and reliability.
But now the reliability of the industry is being questioned in an eight year Federal Trade Commission study to be released tomorrow. John Liebowitz is the chairman.
Here's what we found some pretty troubling information. One out of five Americans. Has an error on their credit report and one out of 10 has an error on their credit report. That might lower their credit score. I'm trying to think of another industry where a 20 percent error rate would be acceptable. That's a pretty high error rate. It's a pretty high error rate. I think the more we look at this and the more the American people know about this the matter they're gonna get.
Ohio Attorney General Mike DeWine has opened his own investigation into the credit reporting industry which for years is blamed mistakes on banks and merchants that provide them with bad information. But the one argues the fault lies with the industry for what he says are clear violations of the Fair Credit Reporting Act.
That these companies have a legal responsibility to make sure that the information is accurate.
The federal law says that if you believe that there is a mistake you can go to them and they have an obligation to do a reasonable investigation. They're not doing a reasonable investigation. They're not doing an investigation at all.
Every day Duane's office fields calls from desperate constituents who can't get the credit reporting agencies to answer their questions or correct mistakes on their report like paid bills listed as delinquent closed accounts listed as open in bad debts that belong to other people with similar names or Social Security numbers.
The problem is not that they make mistakes if they won't fix the mistakes it literally is like this guy behind the curtain in The Wizard of Oz. You really don't know what he's doing. It really is a secret operation that is so hard to crack.
8 million people a year filed disputes about their credit report which usually requires a visit to the Experian Trans Union or Equifax Web sites. They're primarily designed to sell you premium products not resolve a dispute which is what I was trying to do. There's a toll free number you can call which is likely to connect you to someone on a faraway continent.
Thank you for calling me. Okay. Where are you located. India. India.
But regardless of where they are or who you talk to they won't be much help.
So really you can't do anything for me. I've just been talking to you for 15 minutes. I mean the only thing you can do is to tell me to fill it out online. Yes Mr. Crump. OK thank you.
Besides the toll free number they also give you a post office box address where you can send a letter and documents supporting your claim. In each case it's extremely unlikely that anyone with the authority to resolve your dispute will ever actually see it.
Ask Sandra Cortez a Californian accountant whose credit report confused her with an international drug trafficker. It took her five years to get it fixed or David Smith the retired Army officer whose credit report listed a bankruptcy that wasn't his and triggered a foreclosure proceeding against his house in South Carolina. He's still dealing with the fallout.
Where Judy Thomas a trauma nurse with a horror story worthy of Hitchcock or Kafka.
There's nobody to go to there's nobody. You just keep making phone calls and you just keep writing disputes and you keep sending them your Social Security number and they don't care.
Thomas who manages two medical centers near Cleveland says it all began in 1999 when she went shopping for a new dress and applied for a store credit card to get a 15 percent discount.
She was denied was that the first time you'd ever been denied. Chris very first time ever.
Ever ever. But certainly not the last. It became a regular occurrence. The personal credit reports she got from Experian TransUnion and Equifax were all clean and without blemish.
Yet she kept getting rejected and couldn't find out why I would get a consumer report and it would look fine. I would go to the bank and they would tell me oh now you have all this debt but no one would tell me what was on there.
They wouldn't tell you what the debt was and they wouldn't give you a copy of the report that they had.
You know it took Judy Thomas several years to discover what almost no one knows that the credit reports the agency send to you are different than the ones they sell to banks merchants and mortgage brokers.
And she only found that out when a loan officer left her file on his desk and walked out of the room. And what wouldn't you see.
I saw debt from Utah Medical Center I saw debt from that nursery and clinic in Utah. I saw collections.
For Judith Kendall Judith Kendall not Judy Thomas. Correct. What's going through your mind. What the hell's he doing on my credit report. The hell is her dad doing on my credit report. You think this would be very simple to get straightened out. You would think. Yeah. You would think. This is my Judy Thomas vs. Judith Kendall file.
Instead it became a six year battle with credit agencies requiring box loads of correspondence to try and prove that she was Judy Thomas not Judith Kendall. All to no avail.
He said a lot of time invested in this. How important are these documents. It's my life.
There are logs of daily phone calls to dispute centers. Hundreds of letters to Experian Equifax and TransUnion even correspondence from Judith Kendall's creditors in Utah acknowledging that the debts on her credit report aren't hers.
I would get letters back from these companies saying this in fact is not you.
You still couldn't get it off your credit report.
No I've sent copies to the credit bureaus and they and they would come back as mine verified verified. I also hired a local attorney to try and straighten it out. We had everything certified that this is Judy Thomas. This is where I live. I've never gone by the name of Kendall. I've never even been to Utah. Let alone owing a cable company in Utah.
And what happened. Nothing. Nothing. Nothing. What kind of problems this cause for you.
I couldn't I couldn't I couldn't refinance I couldn't take advantage of the interest rates. I couldn't get in. I couldn't get a car. I couldn't. I couldn't co-sign for my children's student loans. And I'd worked hard for my credit. I was.
And these people were taking it away from me.
Finally Judy Thomas took the only recourse available to her. She sued Equifax and TransUnion in federal court. And after a year long battle the credit reporting agencies settled for an undisclosed sum and promised to clean up her file.
Did you think it was going to take a federal lawsuit.
Heck no. They said it just takes a human being going wow this isn't Judith kinda let me fix this. That's all they ever do.
But as we discovered that almost never happens.
If you challenge a credit report and mail your information to a post office box in the United States. The dispute will likely be investigated in India or the Philippines or South America. We travel 5000 miles to the Chilean capital of Santiago where we tracked down three former Experian employees.
Carolina Herrera Rodolfo Carrasco and Enzo Valdivia were all dispute agents and experience national consumer assistance center.
Although they say they weren't able to offer consumers much assistance if somebody had a problem with their with their credit report they would send out the complaint and it would end up with you. Yeah. Oh yeah. So how many of these did you have to do a day. Ninety nine. Yeah. Did you consider yourself investigators. No not at all. Did you have any way to investigate these claims. No. You can call the person you can't pick up the phone and call out no. Geoff phones no. No. Could you email them. No. Did you have the authority to say wait a minute after looking at somebodies file and say that you know this is a somebody made a mistake. This person doesn't have this money. We didn't have the power.
All they did was read the disputes and reduced them to a two digit code like never late or not mine. It was then sent with a two or three line summary and no documentation.
Back to the bank or department store that furnished the original information.
If there was a difference of opinion between the creditor and the person who was filing the complaint. How was it usually resolved in favor of the creditor. Yeah. Yeah. The creditor was always always right. Mostly we took for granted the word of the bank. If the bank fed a guy owns a hundred dollars so it is.
None of us have ever interviewed anybody. And to me from experience and we've got a federal court ordering them to bring these people forward.
And we're still waiting. Much of what's known about the inner workings of the consumer credit agency has come out of lawsuits filed by Len Bennett and Sylvia Goldsmith who have subpoenaed company records and deposed employees and executives they say under the current system there is no way for people like Judy Thomas to get their problems solved.
So all these people who take the time to meticulously document a case that the bill isn't theirs or the bill has been paid.
That is never seen by anybody.
It's not seen by anyone who considers it in determining whether or not information will be removed from a credit report. It's not forwarded on to the person who has the complaint with you know it is never forwarded on never forwarded on to the creditor.
We can get a jury verdict for a million dollars that's chump change to some of these bureaus. They would rather pay a verdict in a million dollars than to actually go in and change the policies and procedures that they have because that's much more expensive to them.
I can say this without qualification to dispute procedures used by the credit reporting agencies uniformly used completely fail to comply with the Fair Credit Reporting Act. Courts have found that the Federal Trade Commission has found that it's not even a close call.
Ohio Attorney General Mike DeWine agreed.
I think the industry is a mess and I think the impact that has on on real people is just unconscionable. You think they're breaking the law. I think they're breaking the law. There is no doubt in my mind they are breaking the law.
We wanted to talk to Equifax Transunion and Experian. But like most consumers we were unsuccessful. The agencies referred us to the spokesman for their lobbying group in Washington. He too declined our request for an on camera interview but did provide a written statement citing an industry sponsored survey that showed ninety five percent of its customers were satisfied with the dispute process.
The industry maintains it's in compliance with federal law go to 60 Minutes Overtime dot com to find out what you can do. If you think there's a mistake on your credit report.