CEO Paul Oster speaks with Lauren Simonetti on Fox Business discussing why 1in 4 credit scores are said to be wrong. Fox Business is seen in 50-million homes nationwide:
http://video.foxnews.com/v/2165338221001/consumer-alert-report-shows-1-in-4-credit-scores-are-wrong/
Better Qualified CEO Paul Oster appears on nationally seen EBRU-TV with Bryan Jenkins on the problems within the credit reporting agency.
Better Qualified CEO Paul Oster appears on Fresh Outlook to join the conversation about Bernanke’s plan to reduce bond buying.
CEO Paul Oster is featured on ‘Varney and Company’ on Fox Business discussing the importance on good credit and the proposed changes in the credit reporting industry. Fox Business is seen in 50-million homes nationwide:
By Paul Oster / NEW YORK DAILY NEWS
Tuesday, August 6, 2013, 10:12 AM
The Money Pros are standing by to take your questions
Q. My child is going off to college this fall and she will be taking out a student loan. Should I co-sign on the loan?
A. Yes, you should co-sign, but only after you understand the full repercussions.
With the cost of tuition going up every year, the use of student loans has also gone up. Student loan delinquency just surpassed credit card delinquency for the first time ever.
That makes co-signing a student loan a very difficult decision. Parents need to understand that by co-signing, they are ultimately responsible to pay back the entire debt.
Often parents don’t realize that a student loan is a very real debt. The name “student loan” makes it sound like it is a friendly loan. It is not a friendly loan at all.
Parents should know that a student loan is not dischargeable under bankruptcy law. You can have your mortgage, car loan, and credit cards all forgiven if you filed bankruptcy, but you would still be responsible to pay back your student loans.
You should assume that if you co-sign, you will be paying the entire monthly payment. Here are some of my recommendations:
*Don’t borrow more than you need.
*Have an emergency fund to cover six months’ worth of payments.
*If your child earns income as a student, make sure a small portion of that pay goes into that emergency fund.
Perhaps the most important tip I would give parents relates to who should be making the payments. While your child is the official borrower, I would encourage you to be the one sending checks to the lender. In turn, your child should be paying you.
Why? Parents need to monitor and control loan payments to protect their own credit profile.
Unfortunately, we have seen the devastating effects that missed student loan payments can have on parents’ credit scores. Most of the time parents are not even aware that there has been a missed payment until they apply for a loan themselves.
At that point, it’s far too late and the damage to the credit score has been done. A one-time, 30-day delinquency can drop credit scores by as much as 100 points.
Student loans have become a necessary evil in today’s world. A student loan can have a dramatic effect on the credit and monthly budget of parents and their children.
Often it is a young person’s first encounter with a credit obligation. It needs to be carefully considered.
Paul Oster is a credit expert and owner of Better Qualified in Eatontown, NJ.
By Laura Gunderson, The Oregonian
A jury Friday awarded an Oregon woman $18.6 million after she spent two years unsuccessfully trying to get Equifax Information Services to fix major mistakes on her credit report.
The judgement, likely to be appealed, appears to be one of the largest awarded to a consumer in a case against one of the nation’s major credit bureaus.
Julie Miller of Marion County, who was awarded $18.4 million in punitive and $180,000 in compensatory damages, contacted Equifax eight times between 2009 and 2011 in an effort to correct inaccuracies, including erroneous accounts and collection attempts, as well as a wrong Social Security number and birthday. Yet over and over, the lawsuit alleged, the Atlanta-based company failed to correct its mistakes.
“There was damage to her reputation, a breach of her privacy and the lost opportunity to seek credit,” said Justin Baxter, the Portland attorney who teamed on the case with his father and law partner, Michael Baxter. “She has a brother who is disabled and who can’t get credit on his own and she wasn’t able to help him.”
Tim Klein, an Equifax spokesman, said Friday that he didn’t have any details about the decision from the Oregon Federal District Court. He declined to comment about the specifics of the case.
A Federal Trade Commission study earlier this year of 1,001 consumers who reviewed 2,968 of their credit reports found 21 percent contained errors. The survey, which is required as part of a 2003 law, found that 5 percent of the errors represented issues that would lead consumers to be denied credit.
A 2012 investigation by the Columbus (Ohio) Dispatch newspaper reviewed nearly 30, 000 consumer complaints filed with the Federal Trade Commission and attorneys general in 24 states about unresolved errors made by the largest consumer credit agencies — Equifax, Experian and TransUnion. The newspaper found that with complaints about errors, consumers reported it had taken many months to fix even the most basic mistakes.
Miller first discovered a problem when she was denied credit by a bank in early December 2009. She alerted Equifax and filled out multiple forms faxed by the credit agency seeking updated information.
In addition to requesting the changes, Miller had asked several times for copies of her credit report, the lawsuit alleged. Credit bureaus are required by law to provide reports to consumers for free annually and after that, for a small fee. On numerous occasions, Equifax failed to respond to Miller’s requests.
Miller had found similar problems in her reports with other credit bureaus. However, Baxter said, those companies had corrected their mistakes.
The issue wasn’t a result of identify theft, Baxter said. Instead, the information from another “Julie Miller” had simply been placed in the plaintiff’s record by mistake. In at least one case, the lawsuit alleged, the plaintiff’s private financial information was sent to companies inquiring about the other Julie Miller.
Since 2008, Oregon consumers have filed hundreds of complaints about credit bureaus with the state’s Attorney General. Those complaints include 108 against Equifax, 113 against Experian and 70 against TransUnion.
Please follow Laura Gunderson; twitter.com/lgunderson
By Kathy Weyer
When you apply for credit, the lender will pull up information held by three credit bureaus. This information is tied to your social security number. Whatever credit you’ve had in the past reflects how a lender will view you today.
The three credit bureaus are Equifax, TransUnion and Experian. If you are late or default on a loan, the credit bureau(s) are notified and your credit report is dinged.
You can get a free copy of your credit report from all three agencies at www.annualcreditreport.com, though they will not include your FICO scores. The Fair Isaac Corporation, now known as FICO, uses a proprietary formula to compute this. Catherine Allen from M Financial Planning Services, Inc. of Marlton says it’s well worth the $30 or $40 to get the three FICO scores along with your credit reports to track your credit standing.
When you get your reports, look at every line item and every column. “Be aware of the fact that you may see false, inaccurate or negative information furnished to the three credit bureaus. At least 70% of those reports are incorrect,” says Paul Oster of Better Qualified, LLC, specializing in business and consumer credit services in Eatontown, New Jersey.
You can correct the reports on your own, but it’s a Herculean task. Nonetheless, our experts tell you how:
1. Really look at the credit reports. “Every consumer has the right to have every piece of information verified and validated by the creditors,” says Oster. “The amount of trade lines and the information they contain can be overwhelming, and it’s going to get even more so. Software packages are now being put in place to start taking credit information from utility companies in the near future.” In other words, our routine financial doings are under the microscope more and more.
2. Identify negative and false or inaccurate information and get aggressive in correcting it through the credit agencies. Write to the credit bureau and dispute the erroneous report. “You have a right to include a 100-word statement to the credit bureau to tell your side of the story. Be very precise and try to write less than 100 words. It’s their job to investigate. If it’s fixable, that’s in your favor,” Allen says.
3. If that doesn’t produce results, contact the Federal Trade Commission and/or the newly-established Consumer Financial Protection Bureau. Both agencies protect the consumer, but are different in approaches. (See sidebar for info on how to reach both.)
4. “If you know you’ve handled a particular debt well, make sure it’s reflected on the credit report,” Oster warns. “You want that positive payment history to show up, because 15% of your credit score is a reflection of your payment history.”
As stated earlier, credit is issued on your social security number. But what happens if you have joint accounts, as most married people do? “Make sure you establish your own credit,” says Catherine Allen. “Have credit cards in your own name, perhaps even a separate checking and/or savings account. The most important thing is to establish your own credit rating.
“Obviously on large ticket items you may have to apply in two names in order to qualify, but if you can, keep all credit issues separate, including checking and savings accounts. This is especially important for women.”
Divorce, identity theft, co-signing for someone else, overspending, a natural disaster, health issues, medical bills, unemployment…all these can cause financial hardships that don’t allow you to fulfill your financial obligations and impact your credit. So what can you do?
“First off,” says bankruptcy attorney Michael Katz of Paul & Katz PC, “don’t stick your head in the sand. Take an active role in correcting or amending the report.”
“If you find a negative item on your credit report that you know is incorrect, call the vendor and ask for help. They’d much rather get some money than go to court and/or end up writing off the debt, so they may work with you,” says Allen. “Plead your case politely. If the person on the other end of the phone won’t work with you, ask to speak to his or her supervisor. Get assertive.” She also advises to ask for the removal of late fees, which show up on your credit report, a flag of sorts to reviewers.
Keep Fighting
An investigative report originally broadcast on February 10, 2013 on CBS’ 60 Minutes indicated that 20% of people attempting to correct errors on their credit report were unsuccessful and ran into severe difficulties in their attempts to make corrections. An eight-year government study documents at least 40 million mistakes, 20 million of them significant, meaning, if not corrected, the consumer’s ability to enjoy the good credit they had worked hard to get and maintain is in jeopardy.
In response to the report, Oster says, “The bureaus are actually circling their wagons and showing some signs of complete disregard (to the 60 Minutes report).” Oster and his company are proactively engaging the credit bureaus through the court system; they just filed their fourth lawsuit in Federal Court and are building a class-action suit.
“The good news is, according to these statistics, 80% of disputes are corrected, so go ahead and follow the protocol, and make sure you take advantage of the free credit reports,” says Allen. However, if your dispute is not answered or you get a confirmation that the error is, in fact, correct (and you know it’s not), it may be time to call an attorney. Katz says, “People whose credit reports are incorrect often have no recourse but to file lawsuits to have the problems corrected and recover whatever damages the law allows. The cost of hiring an attorney should not deter anyone whose credit report is inaccurate, and that cost will probably be outweighed by the time that person would spend and the hassle and frustration that person would experience dealing directly with the credit reporting agency.”
Maintaining Good Credit
The magic FICO score, according to Oster, is 720. When you see advertisements for low rates on cars and credit cards, that offer is for people who have a FICO score of 720 or higher. If your score is lower, you will pay higher rates. He advises a couple of things to remember when you are thinking about your credit:
1. Never close out a credit card, no matter how mad you get or how high the rate. Pay it off, and then don’t use it. “One secret the credit bureaus don’t tell you is to get a higher number on your FICO score your outstanding debt needs to be under 30% of all available credit. So if you have a $1,000 credit line on a card you don’t use, keep it; it ups your total credit available amount and improves your ratio when comparing outstanding debt to total amount available,” he says.
Katz notes, however, that if you are going to maintain a credit card that you do not intend to use, “You may need to periodically make single charges to keep the account open, because some credit card companies close accounts that have zero balances and that have been dormant for a certain period of time. If you want to keep a credit card that you do not intend to use, then you should make a single purchase every year and pay off the balance immediately. You should also do that if you receive a notice telling you that your account will be closed due to inactivity unless you use the account again.”
2. Don’t look around for various deals and apply for credit more than once a year. Once you get financing for a new car, stop opening any other new accounts. Oster tells us, “There are statistics that show if a person applies for some kind of credit six times or more a year, they are more liable to file for bankruptcy.”
3. Don’t co-sign for anyone unless you have excellent credit and know the person intimately and are prepared to take on the debt yourself. Sign up on the creditor’s website to be able to track payment history and step in if you see it’s late. Remember, you’re protecting your own credit, not bailing someone out.
4. “You may see differing reports because some vendors will report to only one credit bureau, often different by 100 points or more,” Oster says. The credit reports are an expense to a business; they often don’t subscribe to more than one bureau, so follow all three of them diligently.
5. Use your bank’s automatic pay system to ensure you always pay on time. Schedule recurring payments to be made every month on the same date.
6. If you decide to hire a credit counseling agency, make sure it’s a legitimate one. According to the FTC website, when you hear a commercial for a credit repair service that says…
“We can remove bankruptcies, judgments, liens and bad loans from your credit file forever!”
“We can erase your bad credit—100% guaranteed.”
“Create a new credit identity—legally.”
…keep your guard up. “They’re very likely signs of a scam. Attorneys at the Federal Trade Commission—the nation’s consumer protection agency—say they’ve never seen a legitimate credit repair operation making these claims.”
7. Talk to your bank about credit protection, we suggest reaching out to the 5 star bank online to get all the details.
8. Keep as much credit as you can in your own name and protect your identity.
Bankruptcy: The Last Resort
“Sometimes bankruptcy is the best decision to get a fresh start, no matter how distasteful,” Katz says. “It’s the last resort. If your debt becomes significant, and you have seen a credit counselor and there is no realistic way to pay off the large debt, your last resort is to file for bankruptcy to discharge the debts and get a fresh start.”
Katz advises a couple of things to protect yourself:
1. Hire an attorney who specializes in bankruptcy. They know how to get exemptions, such as allowing you to keep your car.
2. When the bankruptcy petition is filed, the court appoints a bankruptcy trustee who will work with you. “Complete cooperation and an open door are vital to ensure the desired discharge of debts,” he says.
3. Keep getting those free annual credit reports. If the credit bureau comes back to you saying the negative report is correct, and you disagree, you have the right to file a statement that is recorded on the credit report stating your case. “Bill was paid, product was defective, judgment was satisfied, etc.” The mere fact that you took the time to attempt to correct it will sway future creditors.
Like your heart rate, your blood pressure and your sugar levels, the numbers reflected on your credit report need to be measured, recorded and adjusted as they move up and down the FICO credit line.
* Paul Oster, Better Qualified, LLC
~ Catherine Allen, CFP, M. Financial Planning Services
+ Michael Katz of Paul & Katz PC
From the Federal Trade Commission:
DIY Credit Repair
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself#fraud
From the Consumer Financial Protection Bureau:
File a complaint about your credit report:
https://help.consumerfinance.gov/app/creditreporting/ask
The 3 Credit Bureaus:
Experian
PO Box 2002
Allen, TX 75013
888-397-3742
www.experian.com
Equifax
PO Box 740256
Atlanta, GA 30374
800-685-1111
www.equifax.com
TransUnion
PO Box 2000
Chester, PA 19022
800-888-4213
www.transunion.com
Our 3 Experts:
Catherine Allen, Certified Financial PlannerTM
M Financial Planning Services, Marlton
Catherine.Allen@lpl.com
Catherine Allen is offering Girlfriendz readers a free customized checklist if you contact her and mention this article. Checklists are for those getting married or getting divorced, for those who’ve lost a spouse, or even for those just getting started.
Michael A. Katz
Law Offices of Paul & Katz, PC, Voorhees
www.paulandkatzlaw.com
Michael Katz is offering Girlfriendz readers a free consultation if you contact him and mention this article.
Paul Oster
Better Qualified, LLC, Eatontown
www.betterqualified.com
Paul Oster is offering Girlfriendz readers a free consultation, analysis and kit to repair bad credit if you contact him and mention this article.
Join us May 15th 5:30- 8:30 pm at the NYAMB networking event in East Meadow, NY. Better Qualified will sponsoring FREE professional headshots that day. This is your chance to update your social media, your website, your marketing and your business card or email signature if you use a photo there. Please don’t miss out on a great networking opportunity.
Pre-Registration is required by May 10. Sign up at www.nyamb.org
CEO Paul Oster speaks at New York Association of Mortgage Brokers 20th Annual Wholesale Conference discussing the importance on good credit and the proposed changes in the credit reporting industry & why the credit reporting agencies are considering using utility bills for credit scoring.
Are you getting ready to apply for a mortgage? Predict your monthly mortgage payment with just a few pieces of information using mortgage calculators. Have you obtained a recent copy of your credit report to check for inaccuracies? If not, you might be surprised by what you find. And if you’re still a student and are looking forward for procuring a student loan, then do so with care, for Private student loan forgiveness is a hard thing to come by.
A February 2013 study from the Federal Trade Commission (FTC) found that:
So what exactly is a credit report and how does it differ from my credit score? A credit report is a person’s documented debtor history. It includes every credit card, student loan, charge card, mortgage or auto loan or lease for which you’ve ever been named as a signer or co-signer. Details include starting amounts owed and current balances; monthly payment history for individual accounts; including any record of delinquency. Credit reports also include information regarding known places of residence and employment; judgments and tax liens assessed by courts; and any public record of bankruptcy, so for some people is better to try other mortgage options and get help from this mortgage business in North Perth.
A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information obtained from credit bureaus. For purposes of a mortgage application, the three credit scores used by mortgage lenders are the Equifax Beacon; the TransUnion Empirca; and, the Experian FICO.
Under the Fair Credit Reporting Act (FCRA), All consumers are entitled to one free disclosure (i.e. credit report) every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. Consumers who have had their application for credit, insurance or employment denied because of “poor credit” may apply for additional free credit reports.
certain persons may request a free credit report anytime, with no limit. This includes unemployed persons; persons looking for work within the next 60 days; and, individuals receiving government welfare assistance.
For further information, please either visit www.ftc.gov/credit or review A Summary of Your Rights Under the Fair Credit Reporting Act.
How to Fight Credit Report Errors and Inaccuracies
All consumers should review their credit reports on a regular basis to identify any inaccuracies and should report any errors as soon as possible to the credit bureau. It is very important to clearly indicate the error (i.e. highlight the inaccuracy in yellow); make notes in the margins; and to include any supporting documentation that will substantiate your claim. Finally, you must submit your request to the credit bureau in writing and should send your correspondence with delivery confirmation (ideally requiring the name and signature of the person who received your letter).
Abraham Lincoln was quoted as saying: “He who represents himself has a fool for a client”. Sometimes it’s best to let the experts in a particular field such as credit repair and restoration take on the fight with the credit bureaus for you. Companies such as Better Qualified have been representing consumers for years with amazing results.
Better Qualified has developed a program that will help you restore your credit and save money. Unlike other competitors, the Company takes a personal approach to the credit restoration process and work with its clients every step of the way. This consultative method ensures that clients receive the best results. The Company’s clients complete the program knowing how to maintain good credit long after their term with Better Qualified ends.
Better Qualified CEO, Paul Oster was recently featured on ‘Varney and Company’ on Fox Business discussing the importance on good credit and the proposed changes in the credit reporting industry. Fox Business is seen in 50-million homes nationwide.
Better Qualified has been creating quite a stir recently in the credit repair marketplace and has several other videos featured on the website.
Legal Bistro is an online community where consumers with legal needs are able to post their cases anonymously. The service is 100% free for consumers. Lawyers use the site to find new clients. Our motto is When Lawyers Compete, You Win!