Wednesday, November 14, 2012
credit web-sites oh my!!
RED PHOENIX NATION!!!
It has been a while since I've last posted, life in the world of credit has been keeping me busy. Time for credit pulling web sites and my spin on them! I have chatted it up about this before, but it never seems to sink in. I'm going to give you my take and refresh my faithful about what they are and how or why to use them.
First things first! REMEMBER, THERE ARE 3 MAJOR CREDIT BUREAUS!!! There are thousands of credit bureaus, but for lending purposes we deal with the BIG 3! Experian, Equifax, a.k.a CSC and Trans Union. I bring this up because most people I talk to only pull one bureau because they have to pay for the other two bureaus. That doesn't do a whole lot of good. FACT!!!! NOT ALL CREDITORS, COLLECTION AGENCIES OR PUBLIC RECORDS REPORT TO ALL THREE BUREAUS. If you pull one and think you're all fine and dandy then wonder what the heck happened when you tried to get a loan, its because lenders PULL ALL THREE BUREAUS! REPEAT, LENDERS PULL ALL THREE BUREAUS! Further more, if your purpose is to simply see your score because you want to buy a house or finance a car you need to know what you FICO SCORE IS. www.myfico.com is your resource for it. Buck up and pay for it friends. You buy beer, wine and latte's buy your credit report its $20.
All those web sites that advertise every where you look are owned by one of the big three with the exception of www.myfico.com and from what I can tell credit karma. There might be more, but I honestly don't waste my time searching the web for all these sites. I have a handful I use and I use them for different reasons. WHY USE THEM IF THE SCORE ISN'T WHAT I NEED? Here is one reason: Typically you can get all three bureaus on a combined report and the information is typically accurate and they are inexpensive. I use them for that purpose, not score. I want the information, I want to see who is reporting to each bureau and to look for public records. (judgments, bankruptcy and tax liens) I want the information on one report and I want it cheap, so that's why I use it. I can usually estimate the FICO score off of this information, but I've looked at thousands and thousands of credit reports. That is why I use them and only for that purpose.
If I feel someone is getting close to what they need to qualify for a mortgage I ALWAYS USE www.myfico.com If that is you, and you are wondering about your score and how close you are to getting a mortgage that is where you go.
Lastly, you can also monitor your credit by using FICO's site. However, its not as elaborate as one of the other guys. Meaning you typically can't pull multiple fresh reports each month like you can using one of the other sites.
I'll leave you with this my friends. Decide why your looking and what your intentions are when pulling your credit. Score, info or both? FICO does give you a credit report with your score but its separated onto different reports.
Need help, have questions I'm always around....
john@redphoenixco.com
www.redphoenixco.com
Wednesday, August 29, 2012
The INQUIRIES affect!
RPC Nation!!! Hope everyone is fantastic weird today! If you've been through challenges and you've been here before, then you know fantastic weird fits!!!
Chatting it up about inquiries today, its simple to me but confusing to many. So let's get after it!
Hard and soft inquiries exist in our world of credit, and they each are used for different things. Let's rock the soft inquiries in the break down!
Soft inquires have NO IMPACT on your credit! A soft credit pull can and is used for different things and are confusing to many people out there. Anytime you go to one of those credit web-sites, (the guys that sing the songs ect.) and pull your credit, it is a soft pull. Pull it everyday if you want, doesn't hurt one bit. All the cell phone, utility and cable companies also pull your credit. Again a soft pull, typically they pull to make sure you're already not in collection with them. Meaning, if you owe Sprint $200 and want another phone from them, they won't give it to you until its paid. Who else may do a soft pull is your insurance agent. Your premium is partly based on your credit, meaning bad credit will increase your rate. Perspective employers have been pulling credit as well, the debate of discrimination goes on about that one. For the time being, lots of them are pulling credit to eliminate candidates. Collection agencies will also do a soft pull, why? Mostly because you had your credit ran some where some how and you had to give updated information. They do a soft pull to find you! That's your soft credit pulls, or soft inquiries which do not affect your credit.
Hard inquiries or hard credit pull break down!
Hard inquiries or a hard credit pull is what can affect your credit. On average you can expect a 3-5 point hit for a hard credit pull. Now you're thinking I just went to the car place and they pulled credit with 7 different banks! UGH!!!! No sweat, you can have multiple inquiries within a 30 day time period and it will only count as one pull against you. However, that doesn't mean you can shop for 14 different credit cards, apply for a mortgage and shop for cars all at one crack. That would be 3 pulls against you, it has to be in the same category when applying for credit. I tell people you have 14-20 days for multiple inquiries instead of 30 days. why? Its a bit easier to think about what you did in the last two weeks than the last 30 days. How can having multiple hard credit pulls affect you besides lowering your score? When a creditor or home loan lender reviews your credit, they will look to see what you've been up to. Having multiple pulls can get you declined even if your score qualifies, they factor that into risk. From and underwriters view: "If I'm thinking about approving your loan, but I can see you're going multiple places to get credit that may create a challenge on paying this loan back."
How long do these hang around and play a factor into score? I say two years, so do a lot of other experts. SO JOHN! People have been pulling my credit with out my authorization, what can be done!?!?! You can get them removed, contact the bureaus and tell them it was an authorized credit pull. You may also want to contact the financial institution that performed the pull for a couple of reasons. What if it was pulled and it wasn't you? What if the bank has a banker that isn't that great and thinks, I'll just keep checking every few months to see if they can now qualify?!? Doing the damage!!! I try to keep it brief so I don't glaze your eye balls over. I've looked at well over 30,000 credit reports and breath credit, if you need me I'm always around...
john@redphoenixco.com
www.redphoenixco.com
Chatting it up about inquiries today, its simple to me but confusing to many. So let's get after it!
Hard and soft inquiries exist in our world of credit, and they each are used for different things. Let's rock the soft inquiries in the break down!
Soft inquires have NO IMPACT on your credit! A soft credit pull can and is used for different things and are confusing to many people out there. Anytime you go to one of those credit web-sites, (the guys that sing the songs ect.) and pull your credit, it is a soft pull. Pull it everyday if you want, doesn't hurt one bit. All the cell phone, utility and cable companies also pull your credit. Again a soft pull, typically they pull to make sure you're already not in collection with them. Meaning, if you owe Sprint $200 and want another phone from them, they won't give it to you until its paid. Who else may do a soft pull is your insurance agent. Your premium is partly based on your credit, meaning bad credit will increase your rate. Perspective employers have been pulling credit as well, the debate of discrimination goes on about that one. For the time being, lots of them are pulling credit to eliminate candidates. Collection agencies will also do a soft pull, why? Mostly because you had your credit ran some where some how and you had to give updated information. They do a soft pull to find you! That's your soft credit pulls, or soft inquiries which do not affect your credit.
Hard inquiries or hard credit pull break down!
Hard inquiries or a hard credit pull is what can affect your credit. On average you can expect a 3-5 point hit for a hard credit pull. Now you're thinking I just went to the car place and they pulled credit with 7 different banks! UGH!!!! No sweat, you can have multiple inquiries within a 30 day time period and it will only count as one pull against you. However, that doesn't mean you can shop for 14 different credit cards, apply for a mortgage and shop for cars all at one crack. That would be 3 pulls against you, it has to be in the same category when applying for credit. I tell people you have 14-20 days for multiple inquiries instead of 30 days. why? Its a bit easier to think about what you did in the last two weeks than the last 30 days. How can having multiple hard credit pulls affect you besides lowering your score? When a creditor or home loan lender reviews your credit, they will look to see what you've been up to. Having multiple pulls can get you declined even if your score qualifies, they factor that into risk. From and underwriters view: "If I'm thinking about approving your loan, but I can see you're going multiple places to get credit that may create a challenge on paying this loan back."
How long do these hang around and play a factor into score? I say two years, so do a lot of other experts. SO JOHN! People have been pulling my credit with out my authorization, what can be done!?!?! You can get them removed, contact the bureaus and tell them it was an authorized credit pull. You may also want to contact the financial institution that performed the pull for a couple of reasons. What if it was pulled and it wasn't you? What if the bank has a banker that isn't that great and thinks, I'll just keep checking every few months to see if they can now qualify?!? Doing the damage!!! I try to keep it brief so I don't glaze your eye balls over. I've looked at well over 30,000 credit reports and breath credit, if you need me I'm always around...
john@redphoenixco.com
www.redphoenixco.com
Friday, August 17, 2012
Control, or lack there of!
Welcome Red Phoenix Nation!!!
From time to time I leave the credit stuff alone and like to chat about things we go through. I've been listening to many people and there stories of disaster, lack of control and our friend fear. Friends, right off the get go I need to remind you of one important and often overlooked thing. Although your situation is unique to you, you are not alone. I have helped and chatted with 1,000's of people. I'm telling you! REALLY, you are NOT ALONE!! I'm not going to play counselor, but I will tell you with absolute NO FEAR. I myself have filed bankruptcy, lost a few business's because of one thing or another, divorced with kids, lost a house to foreclosure and had a car or two or three repossessed on me. I might be missing a thing or two but I think you're getting it.
The feeling of being more lost than you ever have been sets in. You are overwhelmed with emotion, confusion and an absolute depression with a blend of pure anxiety sets in. You have lost what most of us don't ever think about: CONTROL!!! You can't even begin to figure out how to get it back, you have advice pouring in from everyone. Now your head is filled with your problems, people telling you what to do, bill collectors call, your boss hates you right now because you can't focus and all you want to do is SCREAM!!! OMG right!?!?! IT CAN'T GET ANY WORSE, BUT YET IT KEEPS GETTING WORSE!!! ARRRRRRRRRR!!!!
Might sound a little familiar in a scary kind of way, that's because I'm chatting about me, you and many others like us. I'm the Phoenix, an indestructible spirit! I take pride in that, a lot of pride. I focused on the positive in my life, anything that was positive. Talking about simply having a leaky air mattress in a windowless room in me gramps basement. I was very grateful for having it. I took control back, taking on one thing at a time and starting to work on anything I could. Improving my spirit, mind and body and did it little by little. Those little things will make the biggest difference. What happened next is I decided to have self belief again. I honestly started to believe and still do that I can do anything. I feel it and believe it, I never waiver. I have many gifts in my life, you my friends are one of those great gifts. All the negative things I have been through and had happen to me; gifts. I didn't almost die physically but mentally I was on life support. I sit here typing away almost four years later running a business again, driving a nice car, living where I want to and spending time with family and friends. Some of you are stronger than I was, and that is AWESOME!
Lastly my friends, smile. Smile and grin, life has hurdles and if we can put a smile on our face while we overcome adversity, then we are truly significant! Be great friends! If you need me, I'm always around...
john@redphoenixco.com
www.redphoenixco.com
From time to time I leave the credit stuff alone and like to chat about things we go through. I've been listening to many people and there stories of disaster, lack of control and our friend fear. Friends, right off the get go I need to remind you of one important and often overlooked thing. Although your situation is unique to you, you are not alone. I have helped and chatted with 1,000's of people. I'm telling you! REALLY, you are NOT ALONE!! I'm not going to play counselor, but I will tell you with absolute NO FEAR. I myself have filed bankruptcy, lost a few business's because of one thing or another, divorced with kids, lost a house to foreclosure and had a car or two or three repossessed on me. I might be missing a thing or two but I think you're getting it.
The feeling of being more lost than you ever have been sets in. You are overwhelmed with emotion, confusion and an absolute depression with a blend of pure anxiety sets in. You have lost what most of us don't ever think about: CONTROL!!! You can't even begin to figure out how to get it back, you have advice pouring in from everyone. Now your head is filled with your problems, people telling you what to do, bill collectors call, your boss hates you right now because you can't focus and all you want to do is SCREAM!!! OMG right!?!?! IT CAN'T GET ANY WORSE, BUT YET IT KEEPS GETTING WORSE!!! ARRRRRRRRRR!!!!
Might sound a little familiar in a scary kind of way, that's because I'm chatting about me, you and many others like us. I'm the Phoenix, an indestructible spirit! I take pride in that, a lot of pride. I focused on the positive in my life, anything that was positive. Talking about simply having a leaky air mattress in a windowless room in me gramps basement. I was very grateful for having it. I took control back, taking on one thing at a time and starting to work on anything I could. Improving my spirit, mind and body and did it little by little. Those little things will make the biggest difference. What happened next is I decided to have self belief again. I honestly started to believe and still do that I can do anything. I feel it and believe it, I never waiver. I have many gifts in my life, you my friends are one of those great gifts. All the negative things I have been through and had happen to me; gifts. I didn't almost die physically but mentally I was on life support. I sit here typing away almost four years later running a business again, driving a nice car, living where I want to and spending time with family and friends. Some of you are stronger than I was, and that is AWESOME!
Lastly my friends, smile. Smile and grin, life has hurdles and if we can put a smile on our face while we overcome adversity, then we are truly significant! Be great friends! If you need me, I'm always around...
john@redphoenixco.com
www.redphoenixco.com
Friday, July 20, 2012
What's old debt and medical collections!!
Red Phoenix Nation!!! We are growing! More people are reading and following, I love it and I thank you all very much!
Let's get right to the deal today!!! I have people tell me that debt is old, so what is considered old debt? Two-three-four years may be old in your eyes and to most, however it is not old to your creditor. I must remind everyone that old debt doesn't just go away and a lot of those items WILL stay on your credit for 7 years. Then comes the question of: it was with Bank Of America then sold to a collection agency. That can get complex and can depend on dating of the debt, specific dating. We do have a statute of limitations, however I'm not an attorney. If you have debt that you believe is approaching the 5-6 year mark, I would HIGHLY recommend a couple of things to you. ONE: Find out from the collection agency exactly what they are collecting on. Essentially ask them for proof of the debt. For example you can ask them for the original contract and a summary of charges, their license for your state, ect. It may not even belong to you so it is important to find out. If the debt does belong to you its not a bad thing to try and settle. However, if you're having trouble getting answers from them and they become threatening, contact a consumer rights attorney. Often times they will consult with you at no charge and at least let you know your rights.
BOTTOM LINE: GOOGLE ALL YOU WANT! There is no cookie cutter answer, EVERYONE has unique circumstances and you can get burned if you play lawyer so don't be afraid to call one. You're not going to get a bill for a 5-10 minute phone call.
MEDICAL COLLECTIONS!!!! YAY!!! So much, so much medical collections!! Your credit gets pulled and you have medical collections, but it doesn't say who its from. The account reads collection, medical: NP PROVIDER or NA. Some may say that's easy to get deleted! They don't have the creditor!! yay!! WRONG! The reason why the creditor isn't given in most cases is because of HIPAA privacy laws. Can't be giving medical information to third parties, but the bureaus know exactly who it is. So then what? Pay? but pay who?!?! Most know what it is, but if you don't you need to right the bureaus and ask for the contact information of the creditor who owns the account. They will release it directly to you, then it may ring some bells for you.
Here is how medical collections happen in a lot of cases. You go see the Dr. pay your co-pay then you get something that says this is not a bill. It is a simple summary of what the clinic is submitting to the insurance company. That can happen a few times, months go by then you get a bill for anything not covered. By that time, you probably starting throwing them away or not paying attention to them. THEN COLLECTION!!! Happens easy and happens over $28, see it every day. There is help! Don't think you're alone and don't think there is no hope. I put a summery of my story right on my site. Check out if your interested, www.redphoenixco.com
if you need help or have questions, just ask. I'm always around....
john@redphoenixco.com
Let's get right to the deal today!!! I have people tell me that debt is old, so what is considered old debt? Two-three-four years may be old in your eyes and to most, however it is not old to your creditor. I must remind everyone that old debt doesn't just go away and a lot of those items WILL stay on your credit for 7 years. Then comes the question of: it was with Bank Of America then sold to a collection agency. That can get complex and can depend on dating of the debt, specific dating. We do have a statute of limitations, however I'm not an attorney. If you have debt that you believe is approaching the 5-6 year mark, I would HIGHLY recommend a couple of things to you. ONE: Find out from the collection agency exactly what they are collecting on. Essentially ask them for proof of the debt. For example you can ask them for the original contract and a summary of charges, their license for your state, ect. It may not even belong to you so it is important to find out. If the debt does belong to you its not a bad thing to try and settle. However, if you're having trouble getting answers from them and they become threatening, contact a consumer rights attorney. Often times they will consult with you at no charge and at least let you know your rights.
BOTTOM LINE: GOOGLE ALL YOU WANT! There is no cookie cutter answer, EVERYONE has unique circumstances and you can get burned if you play lawyer so don't be afraid to call one. You're not going to get a bill for a 5-10 minute phone call.
MEDICAL COLLECTIONS!!!! YAY!!! So much, so much medical collections!! Your credit gets pulled and you have medical collections, but it doesn't say who its from. The account reads collection, medical: NP PROVIDER or NA. Some may say that's easy to get deleted! They don't have the creditor!! yay!! WRONG! The reason why the creditor isn't given in most cases is because of HIPAA privacy laws. Can't be giving medical information to third parties, but the bureaus know exactly who it is. So then what? Pay? but pay who?!?! Most know what it is, but if you don't you need to right the bureaus and ask for the contact information of the creditor who owns the account. They will release it directly to you, then it may ring some bells for you.
Here is how medical collections happen in a lot of cases. You go see the Dr. pay your co-pay then you get something that says this is not a bill. It is a simple summary of what the clinic is submitting to the insurance company. That can happen a few times, months go by then you get a bill for anything not covered. By that time, you probably starting throwing them away or not paying attention to them. THEN COLLECTION!!! Happens easy and happens over $28, see it every day. There is help! Don't think you're alone and don't think there is no hope. I put a summery of my story right on my site. Check out if your interested, www.redphoenixco.com
if you need help or have questions, just ask. I'm always around....
john@redphoenixco.com
Tuesday, June 5, 2012
The credit dispute myth!!!
Greetings Red Phoenix World!!! Hope everyone is great and ready for some myth busting factoids about disputing items on your credit!
Have you ever talked to your work buddy, friend, neighbor or whoever about how to get things removed off your credit? Maybe you were embarrassed so you thought Google will tell me, Google knows everything!!! I applaud you for searching and looking for answers and working towards improving your credit. Most times, you will be told to "dispute" mistakes, even the bureaus tell you to do that! My friends, that's all fine and dandy however here is how that breaks down on your credit in simple terms.
A. If you're disputing items on your credit that actually belong to you that's no good. It is called perjury. You don't need to lie about anything when it comes to the bureaus. If you dispute and an item gets deleted odds are it can go back on.
B. When you dispute something without having supporting documents it does you no good. The bureaus will simply add a "consumer statement" underneath that account and say the have met FCRA Guidelines.
What does that mean to you? It means if you have any accounts in dispute with the bureaus you will not close your loan, PERIOD!! I will say that again, if you have any accounts that are in dispute you can NOT CLOSE YOUR HOME LOAN!!!!
It also means if you get items deleted using the dispute method, then they go back on, then Fannie Mae or Freddie Mac audits your loan and uh oh!?!?! Could make some trouble for you, just saying...
So what the H E double hockey sticks to do!?!?!? It would be a book to break it all down, (book coming soon, shameless plug) We have something called the Fair Credit Reporting Act, or what I call the FCRA. It protects us and allows us to make certain requests to the bureaus. www.ftc.gov is your best place to find it. Simply put, you need to know or at least part of it to make anything happen on your credit.
The point of all this dispute talk is to WARN my Red Phoenix Nation about the potential pit falls of trying to fix your own credit. Not saying you shouldn't try on your own if you want to, but don't make the dispute mistake. Its common that people try and do it online as well, you have to wright directly to the bureaus. Online "disputes" are just that, DISPUTES!!!
There are ways to fix your credit, but it has to be done the correct way. I can't give you all my insights, but I can tell you its not easy, you have to be persistent and patient. If you do check out the FCRA on www.ftc.gov you might also want to check out the Fair Debt Collections Practices Act and Fair Credit Billing Act. Those are helpful in this arena as well. However if you feel overwhelmed and can't get it done or just don't want to, you can always reach out to me. I'm always around...
john@redphoenixco.com
www.redphoenixco.com like me on Facebook would ya!?!?!?! I would appreciate it!
Have you ever talked to your work buddy, friend, neighbor or whoever about how to get things removed off your credit? Maybe you were embarrassed so you thought Google will tell me, Google knows everything!!! I applaud you for searching and looking for answers and working towards improving your credit. Most times, you will be told to "dispute" mistakes, even the bureaus tell you to do that! My friends, that's all fine and dandy however here is how that breaks down on your credit in simple terms.
A. If you're disputing items on your credit that actually belong to you that's no good. It is called perjury. You don't need to lie about anything when it comes to the bureaus. If you dispute and an item gets deleted odds are it can go back on.
B. When you dispute something without having supporting documents it does you no good. The bureaus will simply add a "consumer statement" underneath that account and say the have met FCRA Guidelines.
What does that mean to you? It means if you have any accounts in dispute with the bureaus you will not close your loan, PERIOD!! I will say that again, if you have any accounts that are in dispute you can NOT CLOSE YOUR HOME LOAN!!!!
It also means if you get items deleted using the dispute method, then they go back on, then Fannie Mae or Freddie Mac audits your loan and uh oh!?!?! Could make some trouble for you, just saying...
So what the H E double hockey sticks to do!?!?!? It would be a book to break it all down, (book coming soon, shameless plug) We have something called the Fair Credit Reporting Act, or what I call the FCRA. It protects us and allows us to make certain requests to the bureaus. www.ftc.gov is your best place to find it. Simply put, you need to know or at least part of it to make anything happen on your credit.
The point of all this dispute talk is to WARN my Red Phoenix Nation about the potential pit falls of trying to fix your own credit. Not saying you shouldn't try on your own if you want to, but don't make the dispute mistake. Its common that people try and do it online as well, you have to wright directly to the bureaus. Online "disputes" are just that, DISPUTES!!!
There are ways to fix your credit, but it has to be done the correct way. I can't give you all my insights, but I can tell you its not easy, you have to be persistent and patient. If you do check out the FCRA on www.ftc.gov you might also want to check out the Fair Debt Collections Practices Act and Fair Credit Billing Act. Those are helpful in this arena as well. However if you feel overwhelmed and can't get it done or just don't want to, you can always reach out to me. I'm always around...
john@redphoenixco.com
www.redphoenixco.com like me on Facebook would ya!?!?!?! I would appreciate it!
Monday, May 21, 2012
credit web-sites your scores and more!
Red Phoenix Nation, I hope when your eyes come upon my little blog you're doing well! Today, I'm chatting about all those web-sites that get blasted in your face about your credit. Who are they, what scoring system do they use and why do they seem wrong?!?!
All the sites are owned by one bureau or the other, that is first. I haven't found a site yet that isn't owned by a bureau with the exception of myfico.com I don't spend my days looking for them though, I'm not saying they don't exist.
I need to remind you that the bureaus are private record keeping companies that are for profit, big profit. That doesn't mean we have to dislike them, but we need to know how to use them. The scoring system that the bureaus use is called Vantage Scoring. I won't break down the method but it is very different then that of FICO or Fair Isaac Corporation. The Vantage Score was created to compete with our friends at FICO. The are selling you on a system that has little relevance to world of lending. That doesn't mean those web-sites don't offer purpose. If you're into monitoring your accounts and credit activity they often times can be of use.
If you're looking to monitor your credit and what lenders are using for score, then you need to head to www.myfico.com FICO is our friend, or at least mine! FICO is what 90% of banks and lenders use to evaluate risk. HENCE the confusion for people when they pull their score online then only to find out their scores are much lower when they talk to their lender.
The bureaus want to compete against FICO, they also want to make money. If they can sell you on their site and take your money on a monthly basis they've succeeded. They've also lured you into a false sense of security about your scores. Misleading? it depends on how you look at it and for what purpose you are using a bureau owned site.
What I don't like about those sites besides having to explain this topic daily?!?! Is their credit education piece. I'm not saying its wrong, but I'm not saying its correct. It is based on the Vantage System and that is so different than FICO. If you wanted the differences explained, well sorry it would be a chapter. My goal today was to inform you a few differences about the two and that there are two different scoring systems. I could go on and on but as I think of this topic more and more I might really go off. If you need me, please contact me anytime! I'm always around...
john@redphoenixco.com
www.redphoenixco.com
All the sites are owned by one bureau or the other, that is first. I haven't found a site yet that isn't owned by a bureau with the exception of myfico.com I don't spend my days looking for them though, I'm not saying they don't exist.
I need to remind you that the bureaus are private record keeping companies that are for profit, big profit. That doesn't mean we have to dislike them, but we need to know how to use them. The scoring system that the bureaus use is called Vantage Scoring. I won't break down the method but it is very different then that of FICO or Fair Isaac Corporation. The Vantage Score was created to compete with our friends at FICO. The are selling you on a system that has little relevance to world of lending. That doesn't mean those web-sites don't offer purpose. If you're into monitoring your accounts and credit activity they often times can be of use.
If you're looking to monitor your credit and what lenders are using for score, then you need to head to www.myfico.com FICO is our friend, or at least mine! FICO is what 90% of banks and lenders use to evaluate risk. HENCE the confusion for people when they pull their score online then only to find out their scores are much lower when they talk to their lender.
The bureaus want to compete against FICO, they also want to make money. If they can sell you on their site and take your money on a monthly basis they've succeeded. They've also lured you into a false sense of security about your scores. Misleading? it depends on how you look at it and for what purpose you are using a bureau owned site.
What I don't like about those sites besides having to explain this topic daily?!?! Is their credit education piece. I'm not saying its wrong, but I'm not saying its correct. It is based on the Vantage System and that is so different than FICO. If you wanted the differences explained, well sorry it would be a chapter. My goal today was to inform you a few differences about the two and that there are two different scoring systems. I could go on and on but as I think of this topic more and more I might really go off. If you need me, please contact me anytime! I'm always around...
john@redphoenixco.com
www.redphoenixco.com
Friday, April 27, 2012
Student Loans, what about them?
Red Phoenix Nation!!! Hello all my readers and fans of the blog! I'm chatting about a hot topic in the country today and that would be student loans! When it comes to student loan giants Sallie Mae, US Department of Education or in our part of the country Great Lake Higher Education it seems people run into problems.
I like to caution people when they have multiple loans and think they have them consolidated. Odds are you're making one or two payments into your lender even if you have multiple little loans because they are now "consolidated." If you pull your credit you may notice all of the loans report individually but it doesn't concern you, YET! You run into a tough time or just make a mistake and pay it late. What you don't realize is you didn't just go late on one loan. All of your loans that you have with your student loan lender will now be reported late. What that means is if you have 1 payment for 5 student loans, you just took a late payment on all 5 student loans. That has been my experience when working with clients and their student loans. You have to be very careful and very sure of exactly how your student loans work. Often times when you call into your lender they aren't even 100% positive of exactly how it works or reports. Reason being is they haven't been given the information that executives have put into practice.
What happens next is they don't penalize you with a 30 day late payment, they hit you with a 90 day late payment which hurts your credit a lot more significantly that taking a 30 day late. Imagine thinking you have just taken a 30 day late on what you thought was one loan, turns into taking a 90 day late on 5 different accounts. It doesn't happen all the time, but it happens enough that I have to chat about it. Point blank, I see it every day and often multiple times a day.
How can the report a 90 day late when it was only a 30 day late? It's a practice called "client capturing" and they are not suppose to be able to do it. Student loan default rates are among the highest in the country. They can't take your degree away but they can prevent you from obtaining more credit by penalizing you as severely as possible. This is what gives me reason to believe why they don't consolidate loans on a credit report.
How do you know, what can be done??? CHECK YOUR CREDIT REPORTS WITH ALL THREE CREDIT BUREAUS! Review your credit carefully! If you have a 90 day late with your student loan lender and its on multiple accounts, you need to call them. It is also a fun fact if you have 9-12 months of consecutive on time payments you can get the late payments removed. We do it all the time. There is a lot more I could go into about student loans, but my little blog may start to bore you. If you have specific questions or want to know more please feel free to contact me. I'm always around...
john@redphoenixco.com
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