Removing Public Records from your credit report

A few months ago, someone commented that I was wrong about a particular fact about foreclosure proceedings.  I said that they didn’t appear on your credit file if the foreclosure never closed  and the commenter argued that I was incorrect.  It turns out I was wrong — sort of.  Sometimes a foreclosure proceeding is reported as soon as the proceedings start and that’s what appears on your file.   You can dispute this by doing the normal credit report dispute process — right away.

Public access records will indicate any civil and or criminal litigation. As the bank started proceedings, it was set on the court calendar for hearing, assigned a case number which opens a record file under your name regardless of the out come, verdict or settlement prior to the hearing.

The natural way to dispute this is via the credit report dispute process.    Here are other things you can think about, which will help fortify your chances of getting the item removed from your credit report.

Getting the record dismissed.

Go to your county courthouse and get a copy of your cases dismissal. If one was not filed by your old mortgage company, get them to file it. (They are obligated to dismiss the case after they’ve received payment).  If you get the case dismissed, then you have a high probability that when you file a dispute, the bank will have have to verify that the case has been dismissed.

Getting the record sealed

You are eligible to have your records sealed only if:

• You were not charged
• The case against you was completely dismissed
• You were acquitted of all charges
• FYI, no criminal justice information involving a conviction may be sealed

You may want to enlist a lawyer with any of this, but often times you can do this on your own.

Post from: Video Credit Score

Removing Public Records From Your Credit File

I saw Matt Cheney’s post on this subject and felt compelled to offer up my own thoughts to those looking to climb out of debt. This TED video from Alain de Botton addresses the definition of success.  Here are some of his highlights.

• One reason the notion of success is fractured is that we are surrounded by snobs.  Job snobbery is the biggest issue.
• We are not materialistic,  we don’t want the goods, we want the rewards of those goods.
• Never before has the expectation been so high and we believe that anyone can achieve everything they want.
• Envy is the issue.  We don’t envy people we don’t relate to, but we do envy the people close to us.
• Self helps books.  Two kinds. 1.  You can do it  2.  Coping with low self esteem.
• Another reason is meritocracy.  It’s a great concept, yes, but it’s unachievable.  Beautiful idea,  but, you also believe that people who arrive at the bottom deserve to be at the bottom and this is crushing.  This leads to more suicides.  They own their success, but they own their failures.
• Relief:  meritocracy is insane, an impossible dream.  Too many random factors like illness bring people down who should succeed.  Don’t judge people for their success.
• Newspapers only report the failures.
• One alternative.  Tragedy is an art form to show how people fail and this makes people feel better.
• In modern society, we don’t have something we worship, so we worship ourselves.  One alternative is to worship nature.
• You can’t be successful at everything.
• Our ideas for success aren’t our own.  Don’t give up on the notion of success.  Just make the ideas for success our own.

My takeaways.

• Write down your own version of success.
• Evaluate the material good relationships you have, do they give you the rewards?
• Stop letting expectations rise too high
• Understand that a meritocracy is not perfect, nor should it be.
• Find a way to be grateful each and every day.

Post from: Video Credit Score

Success: One Definition

Steps to Take When Your Wallet Has Been Lost or Stolen

It used to be simple. What did you do when you lost your wallet?

1. Go to the DMV to get a new license
2. Cancel all your credit cards.

The advent of more identity theft has led to a new approach when it comes to losing your wallet.  Now, it’s a good idea to do more than just cancel your credit cards.  So here’s a more complete list.

1. Call your credit card companies.  Go to Gethuman.com to get the phone numbers of your credit card companies to call them and have your cards canceled.
2. Go to the DMV to get a new license.  Report your old one as stolen not lost.  I had an issue several years ago where I reported one as lost.  Somehow, someone found my license and tried to use it to get into a bar (they were underage).  So even if your sure yours is lost, I’d still tell them it’s stolen, unless you lost it down a sewer or on Mt. Everest.
3. Contact any of the credit bureaus to get them to place a 90-day fraud alert on your account.  This fraud alert makes it really hard for someone else to open an account under your name.  I had a fraud alert set on my account a couple of years ago when I went to apply for a new cell phone service.  I could get the service, but the automatic credit check has some new security measures.  I needed to get on the phone with the rep and give all kinds of correct security question answers to prove I was real.  They know a real fraudster just cuts that call short.
4. It’s not a bad idea to use credit monitoring for a few months just to make sure everything is on the up and up.  I like Score Watch from myFICO.  It’s a bit cheaper than others and has some nice bells and whistles. Plus, you can cancel at anytime.
5. Once a few months have passed, if nothing bad has happened to your credit account, you have a high probability of being safe.  ID thieves like to move fast, as they know the value of an ID erodes over time.

If someone has misused your Social Security number or other personal information to create credit problems for you, Social Security cannot resolve these issues.  You should contact the Federal Trade Commission (FTC) at www.ftc.gov/bcp/edu/microsites/idtheft. Or, you can call 1-877-IDTHEFT (1-877-438-4338); TTY 1-866-653-4261.

Plus, if you are reading this and haven’t had your wallet stolen, take out your SSN card right now and put it in a safe place.

original photo source: flickr – moff

Post from: Video Credit Score

Lost Your Wallet? Here’s What to Do First

This ad is a funny satire, especially if you are familiar with the FreeCreditReport.com ads. But, I’m going to tell you why this may not be a good use of our tax dollars–in its intent.

First, it’s never a good idea to change behavior by copying another company’s advertising idea. This is why ads like Verizon’s “There’s a Map for that” or Droid’s “iDon’t” are tricky and often miss the mark. Many people won’t remember who the ad is for, or worse, they might assume that it is the Apple ad “There’s an App for that”. At least in their executions, they have a different look and feel and only the audio is similar.  By the way, the easy test for success is if this Verizon ad and/or the Droid ad is still running three months from now.  If it isn’t, I’d assume the reason for pulling them off the air is lack of efficacy.

With the AnnualCreditReport.com ad,  we have an ad that mirrors the original ad FreeCreditReport.com ad almost exactly. While most of the industry people [I mean us bloggers too] think this is great — for the mass consumer, this may only reinforce the original brand FreeCreditReport.com ad.

I have to ask the readers, have you ever seen an ad campaign where the parody ad got the higher brand awareness? I’m trying to think of one.  It’s challenging, because if the ad is worth a parody, it’s already a really sticky idea.

If the FTC wanted to avoid confusion with FreeCreditReport.com, it should have named the URL and product for AnnualCreditReport.com something else. Forget about the FTC for a minute. What I still can’t believe is that the other 2 credit bureaus with TrueCredit.com and Equifax.com websites, allowed a website name so close to their main competitors. Wouldn’t CreditReportOncePerYear.com would have been better from a competitive standpoint?  After all, this name sounds nothing like the other category sites, so there would have been less confusion.

This brings me to a bigger issue. Even if the FTC comes up with the best ad execution possible, it simply lacks the media budget to spend on getting this message seen and heard. FreeCreditReport.com is probably working with an annual marketing budget in excess of $100 MM.  This means that their jingle [or jingles] are rattling around in our heads, not instead of the FTC’s catchy lyrics.  The FTC isn’t going to put these videos on TV and instead hopes they go viral online.  Either way, I wouldn’t bet on a government agency to win a marketing war.

So, is the FTC campaign a failure?  No, incidentally, I think the FTC has a major victory in this.  By creating a landing page for these videos at http://www.ftc.gov/freereports, they have secured a second top spot in the Google search for “free credit report”.  The FTC now controls the #1, #3 and #4 listings.  That’s a big win, especially because  having a .gov domain probably draws an even higher click through rate than the .com domains.  Plus, they have a video thumbnail which drives even more of a clickthrough rate.

Sometimes you can miss the target and still get a victory.  The FTC’s goal for more usage of AnnualCreditReport.com might just happen.

Post from: Video Credit Score

FTC ad parodies FCR.com ad – a Hit and a Miss

Secret Credit Scores Could Be Making Your Task More Challenging

Here’s the picture: You walk into a car dealer with your credit score and you say, “Hey, I’ve got a 750 credit score”.  Your goal: you want the best rate.  Right away, it can start to get a little confusing. First, the car dealer may ask you if you have a FICO credit score, if the answer is no, then you may be thinking you need to get your FICO score so you can have an apples to apples discussion.  Personally, I’ve seen a 50+ point difference in my TU FICO and TU non-FICO score. Then, you need to ask which FICO score you need.   Remember, there are three FICO credit scores used from the three bureaus of Experian, Trans Union and Equifax. Car dealers typically use just one of the scores [yes, mortgage lenders use all three because the transaction is bigger and the defaults hurt more].

But, does the confusion end there? Sadly no. The auto dealer is likely using something called the “FICO Auto Industry Option”. This is a scoring model that has been tweaked for risk specifically for auto loans. This might make sense to you, depending on where you sit in this great debate. Auto lenders want to assess risk for auto loans, so they want to tweak a general credit score model to be more predictive in auto loan situations. Credit card companies do the same thing in their credit score models. They have a bankcard score which gives more weight to how a user handle credit cards vs. say auto loans.

So, why all the secrecy? I’m not sure it’s meant to be so secretive, but rather this arose out of a need to predict risk better. Opponents of the use of credit scores for employment will argue that employment isn’t even a factor in credit scoring, so why use these scores at all — it’s not like they can be weighted for employment? Proponents say they still predict risk better than nothing. Still, the scores are secretive and secrecy is usually not so good for the user.

Having scenarios where users are confused usually leads to consumer harm. Sorry, but I have to believe that someone who is barely knowledgeable about credit scores might fall prey to savvy auto lender who knows how to twist the situation in their favor.

What should you do about running into a secret score?

1. Walk in armed with as much ammo as you can get. That means that while their be a secret score in play, you are still better off knowing something about your credit and the rates that should equate to this.
2. Get your FICO scores. Sorry, but a Vantage Score is just one more step removed. Credit Karma? Good for insights, but when you are ready to do battle, you want to best closest cousin score available to you and that’s going to be your FICO score.
3. Know that the secret score is probably not that far off. Don’t get your confidence don’t that their might be an important swing in the numbers.
4. If the difference between your FICO score and the industry-specific score does imply a different credit interest rate, don’t panic.  Often times, car dealers use different scoring models, so it’s worth it to check another auto lender to see if they have a different rate.  Reminder: you don’t have to get your auto loan via the dealer!!!  You have other options like your bank or credit union. One of these scores might be more aligned to the FICO score you have.

Post from: Video Credit Score

Secret Credit Scores

MetaCritic, one of my favorite non-credit web sites, scores several reviews of Capitalism: A Love Story  and gives it a 60 out of 100.  Harry Potter and the Half Blood Prince scored a 78, to give you a sense of the grading.  The Rolling Stone loved it with a score of 88.  But, the New York Post was less kind, warranting a score of 25.  Most reviewers seemed to find some good and some bad in the film.  Many reviewers were left feeling…meh.

Personally, I find the movie trailer a bit confusing.  I guess I’m lost with the title to start with.  Don’t get me wrong.  I want to see the movie and understand what he has to say about the credit industry, if anything. I love the Mooresian tactic of interviewing/taunting security guards as much as anyone.

But, I wonder whether or not he will shed any new light on the subject of how to fix a system that most will agree has flaws.  Perhaps, I read too many political and finance blogs, but even the trailer seems a little tired to me.  I’m tired of hearing about AIG, I’m tired of hearing about Goldman Sachs.  I’m tired of criticism without suggestions for how to really repair what ails our system.

So, I’m left with a dilemma.  Should I pay the $10.50 to go this first run, or should I wait to see it on Netflix.

Post from: Video Credit Score

Michael Moore Takes on the Money Machine

Instead of posting a video of my own, I think a link to Prince’s hit song Controversy could best summarize the issue when it comes to insurance risk and credit scores.

First a definition: Insurance scores are a credit based scoring model that is tweaked for the insurance industry.

Myths: Credit-based insurance scores are not based on race or income.  Also, in some states, a policyholder cannot be denied insurance based on a credit-based insurance score.

The issue around insurance scores is that credit history — something not related to one’s driving history — seems to be a correlated determining factor in insurance risk. Critics would argue that this is like correlating “making the bed each morning” to insurance rates.   So let’s follow “making the bed” as an argument.

What if there was a way to track who made their beds each day and the data was matched up with some other data like insurance incidents.  Let’s say the data showed that people who make the beds have fewer accidents.  Should that data be used to set insurance rates?

Do you claim it’s unfair that teenagers have higher insurance rates?  After all, their frequency of incidents is much higher than older adults.  How about gender rate differences?  I have paid more than my wife for car insurance even though my record is equally squeaky clean. Is this okay? Frankly, my anger subsides when I see actuarial tables for this data.  Men are more likely to get in accidents, therefore I must be grouped with them.

What about correlations to race. From a purely mathematical standpoint, shouldn’t every factor be used?  Perhaps not.  But why?  Well, one problem with this approach is that it keeps a group on a vicious circle.  Teenagers can grow out of being teenagers, but we never grow out of our race/color.  What what about gender based pricing?  That’s probably not fair too, in my opinion.

Note: these are not behavior examples.  They are examples of things that people can’t change. I guess a sex change is possible, but what a headline that would make if someone did it just to get better insurance rates.

Now ask yourself if you agree that behavior factors for health care insurance, like smoking,  should be figured in someone’s health care costs.  For those of you who argue that smoking is a cause of bad health, but a non-made bed is not causal of more driving accidents, I have to ask if cause is the right issue.   Remember, if you wipe these factors out, rates go up for a lot of people as some average rate has to be used.

Insurance analysts are simply looking for correlations.  They don’t know that being a teenager proves that you are going to be a bad driver, they are only quoting correlations.  The data points out that there is a correlation between credit behavior and insurance risk.  The question as to why they are correlated goes unanswered and ultimately isn’t relevant.  The industry just cares that they have found a tool to predict risk.  They don’t care about the cause, or fixing it, that’s not their business.

Where will this end?  Will transparency move to such a point to charge more for insurance if I send out too many emails or text messages.  Higher insurance for GPS proof that my phone was used while moving in a car…[although how can they know if I'm driving or not?].

One thing is for sure.  Behavioral correlations are not new and they aren’t going away.  Regulators might be able to block something like credit scores for use in setting insurance rates, but I suspect the insurance companies would simply go to banks to inquire about transaction behaviors and try to correlate that to driving records. If that gets blocked, they will look for something else to help provide insights into our risk profiles.

In conclusion, I think we should just all listen to our parents and make our beds every day, just in case.

photo credit: blog.vegas.com

Post from: Video Credit Score

Insurance Scores based on Credit

This might sound a little crazy.  But, I can tell you that becoming a parent certainly lowered my credit score.  Sure, we’ve heard of all kinds of things that can lower your credit score.  In fact, this may be the most myth filled topic in the last 10 years [acai berry is pretty close though].  I feel I tell at least one person each week not to close down open credit cards as it hurts your score, but many people feel its counter intuitive and they do it anyway.

Here’s the story on becoming a parent.  When you have a baby, even if you have great insurance, you are likely to incur some costs.  In our case, our boy was delivered via c-section [although I'm not sure how that even impacted the cost].  All I know is that we got a bill for about $2500 [the total cost was probably similar to a year of college at Harvard].  We — the lovers of reward points — put that charge on our American Express card.  Great right?

Well, my credit score went down by 8 points.  Why?  The stated reason is an increase in my balance to over $3000.  So, could I have done anything to avoid this point drop?  Yes. Here’s a list

• Paid with a check.  That way there’s no sudden bump in credit card expenses
• Recognize that the time after you have a baby is really busy and you will likely be late on bills or not be paying quite as quickly.
• Pay your credit card bill the same day you pay the medical bill.

What I wish I had done is this final bullet point.  Many of you know that I like to pay my credit card bills off every 2 weeks for the purpose of keeping my rolling balance lower.  This keeps my credit card utilization ratio higher and thus my credit score in great shape – over 760.

Why pay your credit card every two weeks?  You get paid every two weeks.  It’s a good habit that rewards your credit score.

Now, I’ll probably get these 8 points back by getting back to my every 2 weeks strategy.  I would expect to see my score head back up in the next two months.  But, I’ll be more careful, the next time we have a baby, and yes, I hope and expect there will be a next time.

Post from: Video Credit Score

Having a Baby Lowers Credit Score

BrightScope is providing 401K research free to consumers and was featured on TechCrunch earlier today.  The company has a scoring system for company 401K plans which should provide transparency into employees how their plan stacks up.  Not only is this a great tool for job hunters, but it’s also a great tool for employees who can march down to the executive floor and ask why their plan isn’t performing much better.

Here’s a few examples:

• L.L. Bean has a 401K Score of 36
• J & J Snack Foods has a 401K Score of 47
• IAC/InterActiceCorp has a 401K Score of 54

The company also provides insights into what this score means.  Check this out for GE:

For the average 401k participant, the 7 point difference betweenthe GE plan’s BrightScope Rating (78) and the top rated plan (85) could equate to:

• 5 additional years of work
• Up to $366,800 in lost retirement savings

Still, that’s way better than the 17 years longer I’d have to work at LL Bean to catch the industry leader in their category.

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BrightScope, Transparency Creates 401K Savings

• Bad news:  higher rates on purchases, cash advances, balances with a penalty rate due to late payments and of course, higher late fees.
• Good news:  no fee for going over the credit limit.

What a puzzle this is.  They tell me that I’m going to have higher rates, but there is no clear place where I can see what all the new rates are.  That is until I flip the page over.  Now, I have to admit it, I missed reading this page the first 5 times I looked at this.

Meanwhile,  I’ve been a user of auto-pay for a couple of years.  I’ve never been late, but I don’t take this personally.  These are global changes that everyone has to be on the look out for.  I don’t believe that the government should set prices, so I have to be okay with these changes.  But, disclosure is another issue.  This would be like getting a tuition increase notice without them telling you what the increase is.  Disclosure is the key.

So, let’s look at the back page….

Er…. no wonder I missed it the first time.  As if the language isn’t confusing to begin with [the prime plus...blah, blah, blah] this page also doesn’t let us know what the fees used to be.   That doesn’t really give me enough information does it?  Maybe late fees were $35 and now they are $39….seems fair.  Or maybe late fees were $3 and now they are $39….  hmmm maybe I should shop around for a new card.  I could spend hours trying to dig this information out.  Which, I will never do.  Without clear front page information, a consumer can’t make an educated choice.

Credit card reform changes that went into effect today :

Credit card companies must provide 45 days notice before making significant changes in their agreements with customers. Consumers can also reject the changes, triggering an option to wind down their balances over 5 years.

Lenders are prohibited from charging late fees on bills not mailed 21 days in advance of a payment due date, it used to be 14 days notice.

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AmEx Under the Wire, Today the Law Changes