My credit cards are paid off so that’s not a problem… or is it?

My credit cards are paid off so that’s not a problem… or is it?

My credit cards are paid off so that’s not a problem… or is it?

As a credit expert I always get clients telling me exactly what their credit issues are. Now for a small portion of them who do not have many issues a portion of them are correct. After all if you’re currently a 680 credit score then you may only have one or two issues that are hurting you.

However many times there are many other factors affecting their score so I will always tell them what you look at is most likely not what I am going to be looking at.

This is a huge advantage when you have been doing this for over 12 years and have analyzed over 16,000 credit reports in that time frame. Dissecting them, analyzing how the underwriting process behind the scenes looks at them and approves or denies them.

All of this behind the scenes underwriting reviewing is all for your benefit to help you achieve your goals for you and your family.

Many times I have clients that have made recent late payments on their credit cards or car loans, mortgage etc.. (basically recent late payments).
And then if it was a credit card for example which majority of the time it is, they tell me I don’t have to worry about it as its been paid off so it’s no longer a problem.

This is where the education portion of my program begins and I start explaining to them it does not matter that the car is paid off and it is a problem. Explaining the issue to them during the conversation as why it is an issue they will understand it but many times the information leaves them once the conversation is over.

So what I like to do is create a visual picture as most people are visual so painting a picture helps them retain the information for the future.
Think of your credit score in the same way as a crystal ball “works”. The concept is to predict the future. So if a credit score operates along the same lines then a recent late payment gives the lender an indication there may be a financial problem as they are looking at lending you money in the hopes of you paying it on time for the next few years or even the next 30 years if it’s a mortgage.

It’s a math equation, granted a very complicated one but still a math equation. So if you were delinquent in making an arranged payment on time they have no clue if that was a one-time slip up of a foreshadowing of future issues.

They see it two different ways, the first is there is some financial challenges you are going through which of course would give anyone pause on lending you money or lending you money at a low interest rate as those loans are for people who don’t make late payments.

The 2nd you are not going to like a may even take it personally but you can’t argue with a mathematical equation so it’s looked at as if your financially incapable of paying your own bills on-time. Another way it can be called is you’re financially incompetent (at least at this time).

An excuse I hear people say is they never got a bill. The answer which I try to say with a good deal of tact is the credit scoring system reads it as:
“But you know you owe that bank money and that you make payments every month so why didn’t you call them”. It’s not their responsibility to remind you of your financial obligations.

Is it harsh? Yes it is, Realistic in how the world works, yes it is also. What you need to understand is these banks do not know you, they look at how past bills are paid in order to identify if you will pay future bills on time.

I also get people saying they have had excellent credit for 10 even 30 years. And then I have to inform them “that’s great and I will guess that if you even needed to get something during that time you benefited from that great score but you do not have that score now and then lender thinks there could be a future issue now that you did not pay something”.

The hardest thing in credit repair is removing late payments or what is nicknamed “slow pays”, ESPECIALLY when it’s on a current open account as it’s very easy to prove.

So many times I have heard clients tell them that other credit repair companies said it’s not a problem at all so they signed up and paid them money only to later find out months later they were lied to.

UNDERSTAND, when it comes to your credit report and your credit score when it relates to qualifying for a loan and even when credit repair is added to the mix that even if you paid the credit card (for example) down or off does not mean the problem has been fixed.

The RECORD of you not paying that bill on time for that particular month is marked in your credit report and depending on how recent it is will reflect as to how damaging it is to your credit score.

The older it is, the less it affects your credit score as how you pay your bills today counts a lot more than how you paid them 5 years ago.
I hope this helps to increase your credit knowledge when it comes to how the credit system works and the issue with this situation in relationship to credit repair.

But if the late payment is an honest mistake on the banks part while you may get incredibly frustrated to how little help you get to rectify the late payment on your credit if that’s the only issue then the credit repair company should only charge you a small fee after going through a series of questions to create an investigation on the matter.

Want to learn more about how the world of credit works? Contact me today and get my book in full blown color. No nonsense direct answers and easy to understand.

How the “Real world of credit” works:
wayne@waynethecreditguy.com

And of course if you need some credit work to increase your credit score then call me today to discuss!

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!

HOWEVER…

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 https://www.ftc.gov/enforcement/cases-proceedings/132-3091/credit-karma-inc .

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.

SO….

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.

###

SIDE BAR:

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 www.BN.com and get the electronic version on Barnes and Nobles website!

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

OR

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Car Dealer Ads “ Let us help you with your credit”

Car Dealer Ads “ Let us help you with your credit”

My name is Wayne Sanford, I am the owner of New Start Financial Corporation and have been in the credit industry now for over 11 years going on 12 years soon.

I have analyzed over 16,000 credit reports and a large majority of them are for people trying to purchase or refinance their homes.

Prior to the meltdown one of my companies was approved by Dealer-track who provides the software platform for most large dealerships across the country, for the average consumer think of it like after you deal with the sales person and sales manager then go “in the back” to fill out the paperwork with the finance manager and get all the “extra coverage” presented to you to buy.

Now there is NOTHING wrong with that for both parties, the dealership makes more money and the consumer gets more valuable coverage if they want it to protect them from financial unforeseen incidents.

What I get a REAL kick out of is the advertisements some of them use to make it look like they are doing you a favor by saying they can help you with your credit and they created a separate division to help consumers with challenged credit or credit “with a few bumps on It”.

As with most advertisements if there is even a sliver of truth to it then advertising people literally make a molehill into a mountain.

What pops in my head is an old TV advertisements from some bank about use our bank not the others as we don’t change a fee for you to talk to the bank tellers as well as some other ridiculously made up fees.

While most of it was an outright lie, they made you think are you getting charged those types of fees and don’t know it? Answer—you’re not but their point was they don’t charge some fees that others do.

So let’s explore that same concept with car dealerships and other types in the same way, my personal opinion if they have to lie to you to get you in the door that’s strike one in my book, but it’s done all across the industry so for the small percentage of educated that read this let’s put a little more knowledge into your Christmas/holiday stocking.

REALITY Check # 1:

  • ALL dealerships have 95% of the same lenders.

Bank lenders have sales representatives whose job is to go to dealerships and say use our bank to sell your product, we will give you great rates and help you make more money and sell more cars.

The job of this sales representative for the bank is not to have them in one dealership but as many dealerships as possible. That does make sense, doesn’t it?

Car Loans are Securitized:

There are what are called in the industry “Bottom feeder” lenders, these are lenders that are willing to loan money for a car at a 480 credit score, if they are willing to put several thousand down for a down payment and charged them the state maximum of 24% interest.

I would almost call this a temporary loan as how long can the customer keep up a payment that is obviously crazy as just like with mortgages majority of the interest gets paid first before the principle ( approx. 70% of pmt is interest ).

So a $20,000 at 24% interest costs the customer $14,560 in interest and is approx. $575 a month. This does not count the few thousand that was given for a down payment.

At 10% interest? Payment is $425.00

The car lender will then repossess the car and sell it at auction and place a collection and possible lawsuit against the client and since very little was paid on due to all the interest paid in the beginning of the loan. Sounds like a good business but I personally don’t know how those people sleep at night ( the lenders not the dealerships).

Our Department/Program will help your credit:

If you know my blogs you know I have a tendency to deviate when I get a thought in my mind I feel you need to know (think of it as backstory).

ANY TIME an account goes on your credit and you make on time payments it will help your credit, that’s not rocket science. And don’t be deceived into thinking it is going to increase your credit score by 100 points.

And while I always say your credit report is like a thumbprint and everything is report specific so your credit score will increase but if it increases 5 points then all the advertisements about helping your credit they mentioned to you to get you in the doors was not a lie.

Credit repair is a service but it is also a bit of a skill as one would need to know all the inner workings of it and how lenders view that report and score. If a credit expert does not know this then how can they truly help the client and if you are the client are you not paying for that expert advice? Too help you navigate thru a system that media (paid by banks and credit bureaus) that makes it seem like all you have to do is click a button and things will be “fixed”.

If you think that then wow is all I can say, I recently was contacted by a client you found me on the internet and read some very nice reviews on me which I thought was nice but was screwed over by a company in the past and wasn’t sure about doing it again, she said her husband got a lot of negative information removed from her credit but she was still declined for a loan.

So I said to her well it’s like going to a dentist, if you don’t check out the dentist first and they are not good, whose fault was that for not checking them out and are you now going to stop going to the dentist?

I told her you need someone who specializes in mortgage credit to help you get into your home and obviously just deleting some negative information didn’t do the job so a decision needs to be made and I will not “sell you” on me, my credentials speak for themselves, if you want me to help I will be here for you now or a year from now if you decide to make that choice.

I do not push people into a decision as I believe we are all adults and can make their own decision without undue influence.

* Want to learn more about how the credit system works?

Buy my book for easy to understand concepts of how credit works and how lenders look at you just email me today at: wayne@waynethecreditguy.com

Debt Settlement Company Credit Associates flat out lies on commercials

Debt Settlement Company Credit Associates flat out lies on commercials

As we get older we seem to fall into certain patterns or habits, so for me every morning I wake up and as I get ready for work I have the morning news on. This somehow happened to me a few years ago, I think it’s automatic the moment you cross over the age of 40.

One of the consistent annoying commercials is one from the debt settlement company called “Credit Associates”. I always get amazed at how TV networks don’t get sued for airing what is flat out lie to the public.

They start almost from the beginning by saying “there is a secret the credit card companies don’t want you to know, if you have more than $5,000 worth of debt you have the right to settle that debt for a fraction of what you owe”.

NOTE/LIE # 1: there IS NO secret…..

NEWSFLASH for consumers reading this ANY book, commercial or Ad if you even see or hear the sales person saying they have a secret that banks don’t want you to know it is such a lie it’s crazy. Example, how can it be a secret if they are advertising to tell you?

It’s a gimmick trick to get you to call so they have a chance of selling you so don’t be a sucker.

Back to my point….

There is no law that says any debt over $5,000 gives you the right to settle on the debt based on what they say in their commercials.

$5,000.00 is probably their bottom line that they can charge before they can make any decent sort of profit that is worth their time and expense on the consumer while dragging out the process.

While I have no clue how they get away with lying like this what I can say is I actually got a solicitation call from them so I jumped up for joy and pressed “1” to talk to a representative.

My representative was named “John” he did not sound like anyone I know named John. I will point out and I said I was interested but I was super curious as is my nature and wanted to know what was “the secret” or law that allowed me to save thousands like their commercial said since I was never aware of or heard about.

Wouldn’t you know it but John didn’t seem to know what I was talking about and went into his script.

I kept interrupting him to say I want to know first what this law is first before seeing what his company can “do to help me”. He kept trying to read through the script and I said “ hey if this information is above your paygrade then that’s no big deal so put me on hold or transfer me to a supervisor so I can get the answer and then back to you to move forward”.

I was giving him EVERY option available to get me the answer (if there was one) and he would not or should I can could not answer the question. I then started saying “listen your company advertises this so why are you not prepared to answer this question which is in the first 10 seconds of your companies commercial or at least be able to transfer me to someone who can at least tell me the answer”?

As I had some time at the moment and justified however long I dragged this out for utilizing the time for this blog I must have been on the phone for at least 15-20 minutes.

Towards the end of him trying to push past my question and finishing his script and I said to “John” that if your incapable or unwilling to answer the simplest question on the 1st sentence of your companies commercial it’s obvious this company is a scam company so answer the question the next time you speak or I am hanging up the phone.

Shocking result of what happen next? I hung up the phone.

What most of these companies do is basically take advantage of your unwillingness to talk to your creditors. The collectors can be jerks and some are nice. Once a bill has gone past the 120 day mark creditors are open to ‘re-discuss” the original terms of the agreement. Now of course to get to that mark your credit score is destroyed and you may be a candidate for credit repair but maybe not as your credit report is file specific. Think of the term different strokes for different folks.

Without any knowledge whatsoever you should be able to get them to give you a minimum of 20-30% discount off of the current debt owed. An experienced person in this industry can go much lower, I have gotten an average when helping clients with this issue anywhere from a 70-90% savings.

Quick story to end this blog, had a client ask me to look at what their in-laws got themselves into and said sure will be happy to give my opinion. It was a debt settlement program, they had several credit cards and they were paying $375 a month into a “pot” so to speak and when the funds grew large enough they would go in , settle one account and so on.

The issue was in all of the fine print and there was a lot of it but on the page with the fees etc it was CLEARLY marked that this “company” was charging “$221.00 a month” to take their money as their fees that they have not performed and would not perform until these particular clients had at least $1,000 to settle debt # 1.

So they were only saving approx. $154 a month towards settling their bills. They were in shock but I said I didn’t understand why they were as this was clearly printed and they said the person didn’t tell them that and they didn’t look at the paperwork and only signed where he said they needed to sign.

I then said, you mean the “Sales person”??

They got silent really quick, and I gave them advice on what to do but said they have no recourse as they signed the papers and the fees were clearly marked.

You can do this yourself and save some money if you want to or if you choose to hire someone make sure you get some solid numbers and make sure you’re getting some good savings. I had a guy who owe $127,000 in unsecured debt and got everything settled for less than $40,000 which included my fees so he saved over $80,000.

That was one heck of a job and time consuming but normally do not deal with something that large typically.

Moral of this story, READ what you sign and NEVER make an impulse buy/decision. If your being constantly called about your decision then it seems they NEED your money, go with the person who makes you feel comfortable, has a background that can be validated by outside parties and follows up with you when YOU ASK THEM TOO.

* Want to learn more about how the credit system works?

Or

Have questions about your credit where you may need my help?

Or

Buy my book for easy to understand concepts of how the credit system works and how lenders look at you.

email me today at: wayne@waynethecreditguy.com

Shopping for credit repair on Craigslist???

Shopping for credit repair on Craigslist???

So I was actually on craigslist looking to see if there was anyone that installed artificial grass (I have 4 large dogs) it popped into my head and I just did a quick search for credit repair.

WOW! Was I in for a shock, the absolute BS that was being advertised on this section blew my mind away so that got me thinking about another educational blog on credit repair services. I hope this help all that read this, even you other credit repair companies that try to educate you and not get screwed.

I even spent some time looking at their websites, at least the ones that actually HAD a website all I could really do is shake my head I WILL NOT mention any company names as that’s just wrong and unprofessional.

First thing is first… there is no “QUICK , FAST “ credit repair, the reality is you did some damage to your credit file and it will take some time to get yourself back up to where you once were and while creditors or debt collectors have special access to report items on a consumer credit report if you challenge ANYTHING the law allows 30 days for them to investigate or correct. I say this as I have seen some ads saying corrected in 5 days, consumers cannot do that. If they are using a trick to say it’s called a rapid rescore only loan officers have access to this program.

NOW, when an investigation is sent out to the credit bureaus the timeline for response is 45 days.

As of the writing of this blog just in the DWF (Dallas Fort Worth) area there were 1637 posting for credit repair just under the services section, so I can only imagine how many across the country there are in each city/town and as I type this I keep clicking on another one and shocked at all the illegal statements being made.

Now let me state everything they say on these things I will make the official disclaimer that I do not know if they can do it but my almost 12 years of experience says most of these claims are a joke or a flat out lie.

But what I do identify is some of them who claim anywhere from 15 year’s experience to 30 years of “credit repair experience” can’t seem to understand the basic laws (both state and federal) of our industry in the contracts they provide.

So I can then pose these questions to you:

If they don’t know the simple laws of their own industry now how comfortable to do feel giving them all your information and paying them your hard earned money?

CPN’s otherwise known as Credit Privacy Number, is flat out illegal (federal crime) for you to use to obtain new credit. No gray area, anyone saying otherwise is lying.

Here are a few “questions” you may want to pose if you decide to call these companies:

Q- With all of the years and years of experience you have why do you not have any 3rd party credentials to validate your company?

  • Enjoy the backtracking double talk you will get on this one.

Q- You keep using the word “legally” like we fix your credit with legal credit repair. Can you explain to me what is illegal credit repair and how do you define your “legal credit repair compared to the “illegal credit repair” your comparing yourself to?

SIDE NOTE:

As I write this I keep glancing over so this may be a long blog, one just said “LICENSED BY THE ATTORNEY GENERAL”. I’m seriously thinking about sending this over to my contact at the AG’s office for CSO’ now but it is a Friday.

Sorry! I will try to focus, but I hope you are learning and enjoying this week’s blog.

Another one says they are “Pro’s” but they can’t seem to spell correctly, not just one word but several, WOW! Hey guys, it’s a 2 paragraph ad and it’s called spell check!

For the companies that “SELL TRADELINES:

Q- FICO changed the scoring model for when you are added as a “Authorized User” this is called piggybacking. FICO changed it back in 07-08 after a news article about paid trade-lines so why are you charging so much when they changed how much it can help me?

WE can JUMP YOUR CREDIT IN 5 DAYS!

Here is a possible answer first, when a “dispute” is logged on your credit report the negative account is not calculated into the score so your credit score “jumps up”.

Think of this as a false positive, if this is how they get you to call them then that is a very deceptive method in my opinion.

Q- But when the dispute is on the report my score jumps up while that is disputed, once its removed, doesn’t the score drop again?

The answers is yes, but see how they explain that after they realize you can’t be double talked about what they advertise to get people to sign up with them.

GUARANTEED!

If they tell you their services are guaranteed, then ask for a copy of the contract to review. In the”fine print” it usually says that any item they remove is worth anywhere from $50-150 per item, NOT ACCOUNT but item. So if your name is spelled wrong four times. That’s worth between $200 – $600 according to the contract you signed.

The devil is in the details, so buyer beware.

Ok, so that’s enough for now as I could literally go on for hours. Here is the reality:

  • Your credit can’t be fixed “quickly so don’t fall for the scam, it needs time to heal.
  • Don’t believe what the SALES PERSON is telling you, do some research on the company, if there isn’t any then that’s what we call a clue.
  • ANY credentials they brag or claim can it be verified?
  • New SS #’s or CPN’s are ILLEGAL
  • If they have been around this industry for 15-20 years why is there very little about you online?

My overall opinion of companies that advertise on craigslist as you can see is very low, if I had to say why is it done then one opinion can be these are companies who look to steal your money and not do anything to help you, another one is maybe they actually do what to help but are incredibly under qualified and truly do not know how to help someone.

And a final one is how good can you be when you do not know the simple rules/laws that you have to operate under?

And if your one of these company owners that are reading this no issues, call me and I will be happy to tell you what is legally required according to federal and state law on your credit agreements so at least that part of your business is legal.

* Want to learn more about how the credit system works? Take it from someone who has real experience fixing someone’s credit (even as current as today as I review all investigations that leave my office).

I’m basically obsessed with credit and how it works as well as what these companies do to consumers.

Buy my book for easy to understand concepts of how credit works and how lenders look at you just email me today at: wayne@waynethecreditguy.com