Student Loan Mail Scam

Student Loan Mail Scam

For this week’s blogs we are going to talk a little about Student loans and what to look out for. I like many Americans have student loans and will have them for many years to come.

Things to be discussed this week is to understand how some companies try to take your money because you’re afraid to call, others to take over the loan and make a lot of money off you over the years. And just the general things about student loans and how it affects your credit in more ways than one.

I recently received a letter in the mail talking about student loan consolidation and it was in pink and labeled “FINAL NOTICE”, and if I had issues about my loan. I didn’t of course since I know how they work and the details of it. BUT at the very bottom of the letter where disclosures have to be made in a font size I would classify as maybe 6 a font it stated basically that what they are doing you can do yourself all for FREE if you called the loan people and asked about your options that are available.

NOW… the issue with calling the student loan people is if you have read these blogs before talks about how little most customer service people care about their jobs and the amount of training they have or have not had. So understand they do not care about your story or situation, their job is to get money from you monthly when you call so be ready for them to want to get financial information from you asap. BUT remember, YOU DO NOT HAVE TOO, tell them you’re calling to discuss all potion on the table and later decide what is best for you (not them)

Back to the letter, So there are companies out there that charge hundreds of dollars to look at a list of maybe 3-5 different options concerning your student loans, then take some financial information from you and submit it on your behalf.

Think that was worth it? Awesome to hear you have that money to give to someone for some advice on a short list you could read yourself. Remember, they are YOUR student loans after all so it probably would make sense that you pay some attention to them to know what’s going on with them. Now it is totally normal for people to bury their heads in the sand and put things off time and time again but don’t be afraid, take a deep breath and call them. You are one of millions of millions in the same situation so it will be ok.

So the smartest thing for you to do is call your student loan people and have a pad and a pen ready to write things down or if your computer literate be on their company web page so they can direct you to where to go to get what you are looking for. If you never set up an account before, do that now and verify it so you can be logged in when you call them.

AGAIN, when you call their job is to get you to pay them TODAY!

NOW do not let that worry you or deter you, no one is holding a gun to your head.  So just simply tell them you are doing research first on the matter before you decide what option is best for you just like I mentioned before.

Once they go over the different options and you have the details of them and then ask the rep what option do you think is best for me if:


If your student loans are in good standing then simply ask them which option is best for you and your finances.

Option #2:

If you student loans are not in good standing (meaning delinquent or default) and ask them which option do THEY think is best for your finances AND your credit.



Thank them and tell them you will check back with them to get the ball rolling. THEN hang up and call back in an hour or so (even the next day and go through the same thing with another rep to see if they reach the same conclusion. That is really the only way to make sure which option is best suited specifically for you.

If your loans are in default or delinquent understand that calling them is like calling a collection company. They have monthly ”quotas/goals” they are supposed to meet and need to pull in dollars the moment you call.

They do not care if paying today continues to screw up your credit report and score.

AND GUESS WHAT?  If you start paying them today and you’re in default for an example it’s still reporting in a negative light on your credit the entire time.

IF the representatives say it will stop the negative information reporting on your credit then it will be NO PROBLEM to send you a letter saying that PRIOR to you making a payment.

Once you have any type of negative account or reporting think of it as NOW you’re in the system. And that means nothing but red tape and BS. Nothing anymore is simple and could take much longer than you expect to get out of it.


If you are trying to get an FHA loan and have student loans in default then you will fail what is called a CAIVIRS check which is a federal database of loans to the government as they guarantee the FHA loan so be aware of that and getting out of default could take almost a year.

As I always say credit is the cornerstone of the economy and your credit score is your financial good name. And credit repair is a necessity if you have had any life challenges and of course isn’t that why they call it life?

Being in this industry now for over 12 years and approaching 13 years which is hard for me to imagine sometimes and through those years I believe I have seen almost every scenario there is and sometimes a new one pops up but due to the nature of it I am of a way around it or at the very least know how to mitigate it to affect someone the least way possible.

Feel free to send me an email to (going to break it up for spam purposes)

Wayne @ wayne the credit   (of course no spaces when you use it)

Thanks and talk to you next week!


Cell Phone Contracts vs. You = You Lose

Cell Phone Contracts vs. You = You Lose

This week’s blog we are going to talk about what you really sign when you sign a cell phone “agreement”.

I say that as if you have noticed most if not all TV ads say they no longer have “contracts”.

So, first thing is first….

All TV ads are basically lies, or you could say, they omit many important things that would give you the full story and if you knew everything you probably would not go to that company at all. When I do a seminar and it consists of mostly college kids who have come of age (18 yrs old) I tell them you are now legally allowed to get screwed by companies whose name you put on any “agreement”.

Let’s first discuss the B.S statement of “we no longer have contracts”. Obviously a lie, as they say you will take the full price of a phone and divide it into 24 months’ worth of payments where you do not have the option to make the “monthly phone payments longer for you”.

AND, if you do not complete this and leave to go to another company you are charged a “cancellation fee”.

That sound like a “contract” to you? It should because that what a cancellation fee is used for, screwing you over to make extra money (in my opinion).

Don’t pay the fee? It then goes to a collection company who reports it on your credit file and can damage you credit report anywhere from 60-90 points.

Now that we have made that “GOTCHA” to open your eyes to this sneaky tactic clear let’s go into the next one.

“ADD Additional Lines/Family Plan”:

Have more than one person in your family? Add several family members and save money!

UNLESS you have to cancel the service then EVERY added line counts as one service so you are penalized for the following:

  • The rest of your monthly fee owed on your phone (average cost $700).
  • The cancellation fee of an average cost $275-350.00 (PER LINE).
  • Your typical final bill (most people do not pay at average $100.00)

OVERALL money owed per line $ $700-1,000.00  PER LINE!!!!

See how quickly that can add up if you have a few lines as the original plan  you had for saving money by switching?

Now imagine how angry and frustrating it would be to be told by some lender that the cell phone bill collection(which could be from $1,000-$4,000) is hurting your credit score enough for you to possibly not getting the home you want for your family or just yourself and a future family.

MORAL of the story: DON’T CANCEL the “NOT A CONTRACT” until the new cell phones you purchased are paid off!

YOU WILL ONLY LOSE this battle….

TIP:  GET THE INSURANCE on the new phone, at an average of $10 per phone it’s a better deal and protects you for when you do break the phone.

The GOTCHA you don’t think about:

You “Help” your friend or family member get a phone or you add them to your cell phone plan.

When you sign your name to “help someone get a phone” you are signing a contract that obligates you to everything we have spoken about so far.

It does not matter if you never had any of the service you signed your name to. It in fact is absolutely meaningless if you had no relationship with that cell phone company other than helping that family member (for example).

What does matter is by signing that agreement and piece of paper you said to that lender/cell phone company, if this person does not pay the bill I WILL!

The same thing for adding your friend or family member to your cell phone plan. Remember it is YOUR CELL PHONE ACCOUNT. Which means the responsibility is yours and yours alone.

This is the same way you have a credit card that is yours and you add someone as an “authorized user”, this allows that person to use your credit card as if it was theirs but have no responsibility to the credit card company. That credit card company gave the card to you and for you to use as you see fit, any mistakes in judgement or use of it is your responsibility. If that party over uses it, while you have the right to sue the party who used it to pay you back for what they spent if that was your agreement. The credit card company has to claim against that person as you gave permission for them to use is and thus it is your financial responsibility.

The final gotcha:

“Switch now and don’t worry about cancellation fees. We will pay them for you”!!

Sound familiar? You should it’s on a ton of commercials, I have heard this story so many times it crazy and its mostly from consumers who have in their eyes already been screwed over since it’s on their credit report.

This is how it works, YOU cancel the old contract, and YOU get the final bill including phone charge fees, cancellation fees and the last month’s bill. THEN you send a copy of that to the new company who said they would pay for it and they will send you a pre-paid debit card in a month or so.

Can’t pay all of that in one shot or at all? Not the new carriers issue….

Is that someone you want to be a customer of? I wouldn’t. Did the sales person not tell you that? Did you ever hear the phase it’s not what is said but it is what you sign.

The sales person there makes commission, would you have signed up if they said this is how it really works so let’s get you signed up. I would not sign up after hearing the truth.

Just like my book The Real World of credit, this is how the Real World works.

So I hope this gave you some insight as to how something as simple as “changing cell phone companies” without paying attention can cause more problems than you realize.

Want to learn more about how the credit system works? Go buy my book online at here at : Barnes and Noble The Real World of Credit


Or contact me directly for a full blown color copy to truly grasp the real world of credit.

And of course have a question on credit for yourself? Contact me directly at:




What you need to know about Credit Karma

What you need to know about Credit Karma

The commercials are everywhere, GET YOUR FREE CREDIT SCORE!

Constant media commercials telling you to check your credit for free!


Did you ever hear the phrase, nothing in life is free or you get what you pay for?

As you’re mostly likely an adult over the age of 18 years old, I assume the answer is yes. So then the question is why would a company offer to give you the consumer a free credit score?

A quick little back history on credit karma that many of you probably do not know is they were sued a few years back by the federal trade commission which is why all of their tons and tons of commercials which seemed EVERYWHERE suddenly disappeared. They were sued due to glitches in their online app to keep consumers personal information secured and safe. This is of course a general explanation, if you want to read everything on it just google it or click this link from the federal trade commission .

As the lawsuit was settled approximately about 2 years ago or less the commercials came back with a vengeance and everywhere, some actually twice an hour on some TV shows.


Why give something for free when everywhere else you have to pay for it?

It’s simple actually if you think about it, they SELL YOUR PERSONAL INFORMATION that you give to them in exchange for it.

Now of course this is my opinion and there is really no way to prove this as credit karma is a privately owned company. BUT let’s put some financially incentive logic behind my theory/opinion.

They get all of your updated personal information including of course your phone number and address. Collection agencies and banks that you owe money too can now sell that updated new information to those companies.

Think of the concept like a bank, ever wonder why they try to get you to open a checking account, savings account, money market account and other products?

The more products you have with them the harder it is and the more effort you have to expend if you decide to leave them as now there are many products you have to switch over.

That’s why the free credit score is offered. To entice you to help get you to sell their other products and get even more information on you to sell.

In addition any product you happen to partake in or buy they are financially compensated. So it’s kind of like how lending tree used to work (or still does as I have not paid attention to them in a while). They advertised apply with them and then sold those leads to mortgage banks and lenders; typically they sell the same number too many lenders. I know as I did this over a decade ago and got called about 17 times and even up to six months later.

Another reason…..

What they don’t tell you and you can’t seem to find ANYWHERE on their website until you are a member is they do not use the FICO scoring model they use the credit bureaus own created scoring model Vantage Score. This was created awhile back and the credit bureaus went to court with Fair Isaac and company over this and won.

Think there is a possibility that the credit bureaus may be offering the information for free to them or at an incredibly discounted price in order to push their scoring model? You would be naïve to think that is not somehow in the master plan.

Vantage score has undergone many changes since it started as initially in my opinion the credit bureaus were so arrogant as they thought they were going to change the scoring model system which originally was 500-990 (vantage score 1.0).

That backfired as it confused everyone when they tried using it so I’m not sure what made them think the way they did but fast forward approximately 7 years and they are at Vantage Score 3.0 which is the same as FICO scoring 300-850.

BUT the basics of how that score is calculated is different than FICO scores and just like with FICO scores each industry FICO scores will be different which can lead to even more confusion when people think they have scores that get get them approved

NOW, Experian for whatever reason chosen does not work with them however Equifax and Transunion does.



The credit bureaus collect data, that’s all they do, when a lender comes to them they have specific information they want and assign a number to it. So what’s important to a mortgage lender may not be as important to a car lender or credit card lender so that’s just one little reason why credit scores are different.

This was just a little public service announcement to give you some clarification in case you were ever wondering why you see so many credit karma ads and wondered why you take those scores to other lenders and they tell you something different.

As I tell everyone, I will tell you the truth of your situation whether you like it or now and if your credit file has the potential to improve to the goal you are trying to reach I will tell you that and discuss how it can be possible so call me now!

Of course as a disclaimer everything I am saying in this blog is mostly my educated credit opinion from being in the credit industry for over 12 years. This is my experience in dealing with this company and some of my research.    =)

Want to learn more about how credit actually works and how lenders view you? Buy my book “The Real World of Credit” on my website www.waynethecreditguy or go to and get the electronic version on Barnes and Nobles website!

WANT a HARD COPY in full color? Just contact me below to get one!


Get a copy of your credit report and contact Wayne to review today at:


How do I have a Zero Credit Score?!?

There are many times I come across adults (40 years +) and they have a Zero Credit Score. Many people do not understand why they would have that as a score, so let’s explore that topic and identify the several ways you can have a zero credit score.

The 1st is simple! You just turn 18 years old and now you can obtain credit but you basically have a blank file/report. You can’t have any score if there is no data in the calculations, correct?

Part B of the 1st is you are older but have never actually ever utilized credit. I come across this in situation from a lot of ethnic cultures that are not originally from the United States. So you can be 40 years old and never utilize credit which would attribute to the reason why you have a zero credit score.

The 2nd is you have nothing on your credit report but negative information. This could be even if you never utilized credit in the past but have had medical bills or if you have cable or utilities and missed the last payment or had a cell phone contract. It does not have to be just a credit card, auto loan or mortgage.

The 3rd and final reason you can have a zero credit score is the negative information greatly outweighs the little positive credit you may have. This true especially if you have a “heavy” file that means you have a lot of negative accounts in your credit file.

NOTE: Majority of the time the dollar amount on the negative accounts are a non-factor it is the timeline of the negative account which is most prevalent to the amount of points its affecting the credit file.

A credit report that is considered a “light” file is when there are very few accounts within the credit report thus the accounts good or bad will greatly enhanced to the effect it has on the credit score.

So now you know there are actually 3 difference scenarios where a consumer can have a zero credit score. I hope you found this information helpful and check back for more!

Want to learn more about how credit actually works and how lenders view you? Buy my book “The Real World of Credit” on my website www.waynethecreditguy or go to and get the electronic version on Barnes and Nobles website!

New FICO score model helps with Medical… Or does it?

New FICO score model helps with Medical… Or does it?

FICO newest scoring model FICO 9.0 has changed its credit-scoring model by putting less focus on medical debts and will give consumers a break on their score IF they’ve settled with a collections agency.

It sounds like FINALLY, the newest credit scoring model helps the little guy, the American consumer. HOWEVER… it’s unlikely to change credit scores for most people anytime soon.

The new model touts paid medical bills are scored as neutral. Note the word PAID, which means if you are settling an account if the letter you get (IN ADVANCE) does not say the account will be marked PAID IN FULL then it will count against you.

For consumers reading this I write a lot of these blogs to help educate you when either thinking about fixing your credit on your own or assessing if you believe I am a reliable and solid company to work with to help achieve your financial goal.

It has recently come to my attention that some other credit repair companies have been reading these to help educate themselves on credit so after hearing this and deciding it is not my job to educate other companies who go around stating they are credit specialists I am going to explain several things on each topic and blog but not go into the major detail on certain aspects of the topics.


The limits of these collections are $100 as mentioned by FICO. While many times there are medical bills on consumer credit numbering in the thousands many, many times there are what seems to be a ton of “little” bills ranging from $3 to 75. So paying these pesky little annoying bills seems like the perfect way to help your credit.

People cannot help getting sick and the medical business (yes I said business not industry) is littered with incompetency. Don’t believe me? If you have a few medical bills try going to the place where you had the services ( if the debt is a little old) and then ask for the manager and see what they can do to take the debt back from the collector so you can pay them directly (warning if you have long hair be prepared to pull it out).

So at face value this looks like a plus for consumers but here is the analogy that will make the reality of this stick. What good is the model if the banks/lenders/analysts do not use the model?

The financial industry is loath to change and while the previous scoring model came out a few years ago a majority of the lenders have not utilized it and only a few have recently started to.

PLUS… if the lender does not feel the new model represents the true picture of a consumer’s financial wellbeing and stability, why would they use it?

And if you are trying to buy a home then do not expect when the news articles hits that FICO 9 is now available and consumers are expecting to see an approximate 25 point increase in score, be prepared to be disappointed.


Want to learn more about how credit actually works and how lenders view you? Buy my book “The Real World of Credit” on my website www.waynethecreditguy or go to and get the electronic version on Barnes and Nobles website!