A 10-Step Take Action Plan: Part Five - Decide & Act: Dispute, Negotiate or Wait

Now it’s time to take action. This means taking the steps to get the items on your list updated, corrected, or removed. There is a book written by Linda Ferrari, a national credit expert, titled The Big Score - Getting It & Keeping It. And although I am going to give you some great information below, I highly recommend that you consider reading this book if you are facing serious credit challenges. Throughout The Big Score, you will receive access to tools, tips, information and even legal references that will help you successfully dispute and negotiate with the credit bureaus and creditors; however, for the purposes of this part of the series, I will outline the basics.

You have three choices:

Dispute

If your decision is to dispute an item, you must be ready to commit and follow through. Here are some basic tips to get you started:

1. Send a letter to the credit bureaus giving them a detailed explanation of what you are requesting. Attach copies of any supporting documentation that you have (i.e. statements proving your correct credit card limits and proof of payments). Send letters certified, and, to avoid delay in their replies, always attach proof of social security and proof of address right from the beginning.
2. Wait 35 days (allowing 5 days for mail time.) If the bureaus do not respond within 35 days, send a formal complaint letter reminding them that per Section 611 of the Fair Credit Reporting Act they are required to respond within 30 days from the date they received your initial dispute. Also remind them that per Section 616 & 617 of the same Act they are liable for damages, including punitive, and that if necessary you will seek legal representation. Attach your original dispute letter and proof of delivery to the complaint.
3. Just because the credit bureau has determined an item “investigated” does not mean the results are accurate. If you are 100% sure that your claim is true and accurate, and the bureau responds stating that the creditor has verified the information and the item will not be removed or updated, you must request a reinvestigation under Section 611 of the Fair Credit Reporting Act. I highly recommend that you do so within 5 days of receiving the results of their investigation. You can repeat this process as many times as you want, however, after three to four attempts, I would consider moving onto the next step.

If the credit bureau continues to stand its ground on not updating or correcting inaccurate items on your credit report, here are some additional tips:

• Attaching copies of lawsuit verdicts that show how consumers have prevailed against the bureaus can help you convince the credit bureaus to make the necessary changes to your reports. It lets them know that you are well aware of your consumer rights. There are several references to successful lawsuits online wherein consumers who have sued the credit bureaus and creditors with punitive damages have been awarded hundreds of thousands of dollars and even millions.
• Look for other consumer stories on the web. There are many credit repair blogs in which consumers share their strategies. Be careful not to take advice as blind trust, but instead, look for helpful hints that pertain to your situation.
• File a complaint with the Federal Trade Commission Consumer Response Center. You may be able to have your case added to a class action lawsuit against the bureau that is reporting the inaccurate information. You can access the FTC Complaint Wizard at http://www.ftc.gov/bcp/index.shtml, or you can mail a complaint letter to the following address:

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580

Negotiate

If your decision is to negotiate on an item, the most important advice I can give you about negotiating is to do your research before entering into negotiations with a creditor or collection agency.

Here are some other great resources to help you get to know the ins and outs of the credit counseling and debt negotiation industry:

• National Foundation for Credit Counseling
• Association of Independent Consumer Credit Counseling Agencies
• The Federal Trade Commission
• National Consumer Law Center
• Consumer Federation of America’s Report: Credit Counseling in Crisis
• National Consumer Law Centers Report: The ABC’s of Credit Counseling

Here are the basics to debt negotiation:

1. Lay your debts out on paper.
2. Validate collection and charge-off debt with the creditor or collection agency.
3. Verify the Statute of Limitations and 7-year reporting period.
4. Figure out how much you can realistically afford to pay.
5. Call the creditors to discuss your options or negotiate.
6. Get the agreement in writing, and then follow through with the payment plan as agreed.

The key to successful debt relief negotiation is to establish clear goals before you start, and be persistent. Many times you may have to contact the creditors or collection agencies several times before reaching an agreement. Be professional even when they are not. Do not let your emotions get the best of you. Be polite, calm, and cool.

I am a true believer in trying to do it on your own if you have the time because no one will have your back like you will. It does not take a specific degree to get the job done. However, there is a clear precedent set years ago by the credit counseling and debt negotiation industry that makes creditors very reluctant to deal directly with consumers. But a precedent is not a law, and if you do your research, and work hard enough, you can definitely do it on your own.

Two important things to remember:

1. Negotiate with confidence that you will win. By doing your research, you will gain the knowledge you must have to successfully negotiate derogatory debts. Knowledge is power, and once the collection agency or creditor realizes that you have done your research, not only will you limit their response options, but they will realize immediately that you are not a pushover. The tactics that they would normally use on a consumer who doesn’t know their rights, will now be useless to them, and they will be more apt to agree to your terms.
2. Get everything in writing. Words mean NOTHING when it comes to agreements with collection agencies or creditors and the terms they agree to on the telephone.

On the other hand, if you don’t have the time or emotional energy to face creditors and collection agencies head-on, you do have options. My best advice is to do as much research and cost comparison as you can before you hire a company to help. Make sure you do the math on the plans they propose. In other words, make sure that at the end of the day, the payment plans, or fees make sense.

Here’s a real life success story from Linda Ferrari’s book, The Big Score - Getting It & Keeping It - to help motivate you to take on your creditors.

Real Life Success Story: David

Debt Negotiation can create real life miracles. In fact, just a few months ago, I received a call from a client I’ll call David. David was in a situation in which he found himself a heartbeat away from throwing his hands up and walking away from everything. He had a failing business that had been in the red for more than two years, a home for which he now owed more than its value, four credit card accounts that were maxed out to the tune of $ 210,000, and a collapsed emotional and physical threshold.

We sat down and took a look at his debt, to see what we could do to salvage his credit and his life. The first question I asked David is how much cash he could gather to help settle his debts. He estimated that he could raise about $ 100,000 to settle $ 210,000 in credit card debt, and bring his mortgage current.

David had always been on top of the game. He usually had a lot of money, and he was strong. Because I knew this, I worked with David teaching him how to debt negotiate. At first he was reluctant, because the accounts were still open and in good standing. “There is no way that these banks are going to accept this offer from me, especially when I am still current on the accounts,” David argued. “I have no idea what to say, or what to ask for. I want you to handle this for me.”

I explained to David that original creditors do not like dealing with third parties. More so, to have a third-party call on behalf of his open accounts that were in good standing would immediately create a defensive situation. If anyone other than David made that first call, the chances of reaching a settlement amount on his accounts before they charged off would be very slim. So we wrote his hardship letter and mailed it to the creditors, and I coached David through the do’s and don’ts of negotiating on the telephone. Within one week, he had successfully negotiated three of the accounts for 40%. He told me that he was honest and professional. I had advised him to not threaten bankruptcy straight out, but to make it clear that he did not foresee being able to pull himself out of his financial situation. I also suggested that he offer to send them proof of his hardship. Proof that his company had been in the red and that he was not pulling enough income to cover his debts, and proof that his mortgage was in default. Once David finished negotiating with the first creditor successfully, the remaining creditors were much easier to face. He now knew it was possible to do something that he had believed could not be done. He saved many thousands of dollars in commission fees to a debt negotiation company and he immediately reduced his debt by more than $ 60,000.

The accounts were reported to the credit bureaus as “Paid For Less Than Full Balance,” which is negative, but less negative than a Charge Off or Collection with a balance that is open to lawsuit. Plus when the balances went down to zero, his score went up in the Amounts Owed factor because his debt to limit ratio on those accounts was at $ 0.

Wait

Two of the most misunderstood aspects of credit reporting are: Statute of Limitations and the 7-Year Reporting Period. It is important to understand both when deciding whether you should wait for the derogatory information to fall off of your report, or not. Most consumers don’t realize that there are two expiration dates when it comes to negative credit accounts. In most instances, charged off debt expires sometimes 3-4 years before the 7-year reporting period is up. What you need to take into consideration:

• If the statute of limitations has expired on a debt, then you are no longer legally liable to pay that debt. You cannot be sued and your wages cannot be garnished. However, the item can still remain on your credit report for the 7-Year Reporting Period and you may be denied credit due to an open derogatory balance on your credit reports. Statutes vary by type of debt and by state. Call me if you have a question about your state.
• Once the 7-Year Reporting Period runs, you can have that item removed from your credit report altogether. There are exceptions to the 7-Year Reporting Period for some public records, but in most instances, when that 7-Year Reporting Period expires, you are free and clear.

It’s a personal decision. If you are a year from the 7-Year Reporting Period and you cannot afford to pay the debt, then wait it out. However, if you are able to pay the derogatory AND negotiate a deletion, you can arrange to have the item removed earlier and get on with your financial goals. Remember, knowledge is key to successful negotiations.

It’s a personal decision. If you are a year from the 7-Year Reporting Period and you cannot afford to pay the debt, then wait it out. However, an open collection debt with a balance may stop you from successful loan transaction. If you are able to pay the derogatory AND negotiate a deletion, you can arrange to have the item removed earlier and get on with your financial goals. Remember, knowledge is key to successful negotiations.

In Part Six, you’re going to learn about how important your mix of credit is to your credit scores. You will receive some great tips on How To Get Your Mix In Check. Be sure to keep an eye out for this important information.

A 10-Step Take Action Plan: Part Four - Creating Your Take Action Plan Checklist

Let’s use the Home Inspection Analogy. When you want to sell your home, you hire an inspector. They make a detailed “fix it list” of the items in need of repair. The theory is that the more items completed on this list, the more you will maximize the value of your home. It’s the same with credit. Your goal is to go through your credit reports with a fine-tooth comb, make a list of the items that are negatively impacting your scores, and know that the more items you check off your list the better chance you have of maximizing your credit scores in the shortest period of time.

When most people look at their credit reports, they focus on repairing the negative items. It is critically important for you to remember that negative payment history only makes up 35% of your scores. There is another 65% of your scores that has nothing to do with negative payment history but still brings down the scores. It is essential that you make sure that all of your good credit is being reported and being reported accurately.

Create A Spreadsheet

Before making your TAP Checklist, you will want to create a workable spreadsheet that will organize the data and action plan in a way that will give you instant indication of what action needs to be taken. At minimum, your spreadsheet should include the following columns:

• Item Type (i.e. collection, late pay, wrong name, tax lien)
• Dispute Reason
• Account Status (open or closed)
• Original Creditor Name & Account #
• Collection Agency/Court Name and Account or Case #
• Open Date
• Date of Last Delinquency or Date Paid
• A column to list the Statute of Limitations
• A column to list the 7-Year Reporting Date
• Amount Due
• Limit
• Balance
• Action (Dispute, Negotiate, Wait)
• First Dispute/VOD Letter Date
• Reinvestigation Letter Date
• Formal No Response Complaint Date
• Letter of Intent to Sue Date

Make Your TAP Checklist

One of the columns in your spreadsheet will be the dispute reason. To help you get started, here’s a list of 30 of the most common dispute reasons. If any of these apply to the information being reported on your credit reports, you should consider the item negative and add that item to your TAP checklist:

1. This account does not belong to me.
2. I was not 30, 60, 90 or 120 days late on this account.
3. This is a duplicate account.
4. I never authorized this account.
5. The balance on this account is incorrect.
6. There is no past due balance on this account.
7. You are not reporting a positive account on my credit report.
8. This account is closed with a $ 0 balance and has a positive history.
9. This account was closed by me, not the creditor.
10. You are not reporting the correct limit on my account.
11. This account was included in a bankruptcy and should have a $ 0 balance.
12. This account was paid.
13. The open date on this account is incorrect.
14. This account is still open.
15. I am only an authorized user on this account. Please remove it.
16. You are reporting my home equity line of credit as a revolving account.
17. I never authorized this inquiry.
18. This public record has been satisfied/released/dismissed/vacated.
19. You are listing the wrong file/released/satisfied date on this public record.
20. This account was charged off in (date). No late pays should be reported after that date.
21. The date of last activity on this account is incorrect.
22. This account never went into foreclosure/repossession.
23. The 7-year reporting period has expired on this account.
24. The statute of limitations on this account expired. You cannot report it or re-insert it.
25. You are reporting someone else’s information on my credit report that has the same name that I do.
26. You are reporting the wrong social security number, birth date, spouse’s name, phone number on my credit report.
27. You are reporting wrong/expired/misspelled addresses on my credit report.
28. You are reporting misspelled/wrong names on my credit report.
29. You are reporting outdated/wrong employment information on my credit report.
30. This student loan account has been deferred.

The key is to make three separate TAP spreadsheets, one for each credit bureau, and to write down EVERYTHING that needs attention. Then, you can decide which action should be taken - Dispute, Negotiate, or Wait. In Part Five, you will receive some great tips to help you decide which option would be best for your situation. Be sure to keep an eye out for this important information.

2003 Jeep Grand Cherokee Limited Review

If you are looking for an affordable, good quality Jeep Grand Cherokee, then this may the one. This Grand Cherokee comes with the 4.7 Liter V8 engine has about 105,000 miles on it.



The Drive

I’ve recently had the opportunity to put this 2003 Jeep Grand Cherokee Limited through two road tests. Let me start by saying that I was pleasantly surprised about how well this Grand Cherokee drove and performed. I found the seats and the driving to be comfortable…which is important to me. The ride was smooth and it handled as expected for a sport utility.

I put its acceleration and braking to tests. The acceleration was great and smooth and the braking responsive and without and shuttering.

The Exterior

I did an up-close walk-around of the vehicle and don’t see any apparent paint or body work on the vehicle. I did run a Vehicle History Report and it showed No Accidents and No Title Issues. What I did notice were a variety of small scratches and dings on the vehicle. This is to be expected on a vehicle with just over 100,000 miles. As a matter of fact, I see a lot of vehicle with half the miles that don’t look as nice as this Jeep.

The tires are in fair sheep and will probably need to be replaced within the next 10,000 miles.

The Interior

The interior overall is in good condition. Most interior wear on a vehicles is found on the drivers seat and that is the case with the Grand Cherokee as well. The driver seat is show some wear, but not that bad. The rest of the seats are in good condition as well as the dash and the carpet in the vehicle.

I notice no cigarette or any other funny smells in the vehicle. I’m pretty confident this vehicle has not been smoked in.

Mechanically

Mechanically the Jeep Grand Cherokee has passed the Virginia Vehicle Safety Inspection. The only thing we had to do was to replace a broken motor mount. I did notice that the hood supports are not working so those should be replaced.

Price

By comparing pricing from four different sources (Edmunds, Kelley Blue Book, NADA, Manheim), the AMV (Average Market Value) on this Jeep is $10,887.50. The Jeep is offered for sale at $9,999 for a savings of almost $900.

Final Thoughts

For a vehicle with a little over 100,000 miles on it, this Grand Cherokee is in very good condition mechanically and physically. Of course it is not perfect…no pre-owned vehicle is, but other than a few very minor and inexpensive to fix issues this Jeep should make a great vehicle for anyone looking for a nice, quality, affordable sport utility.

To schedule a showing and test drive, please call Chris at 434.566.0107 or e-mail me.

 

Funny Seen In The Movie Flywheel

The movie Flywheel was made by a church in Georgia. The quality is not Hollywood, but the movie is funny. My favorite seen is in this clip at 8:43. Check it out.

Really Nice! Dodge Ram 1500 Pickup Truck

Here is a REALLY nice Dodge Ram 1500.

 
It’s a Dodge Ram 1500 ST with a 3.7 liter V6 engine.

The first thing I did in checking out this truck was to walk around it and look up close to see if there was any apparent paint or body work on the truck. From what I can tell there is none. I did notice two small dings on the vehicles. One is on the tailgate and the other and hard to see one is on the lower part of the drivers side door.

Next I ran a Vehicle History Report and it came back clean showing no accidents or issues (remember don’t trust Carfax or AutoCheck to tell you if a vehicle has really been in accident).

Then I took it for a drive. This Dodge Ram drives really well. It comes equipped with a somewhat hard to find 6-speed manual transmission. Surprisingly the manual transmission shifted more like a car than a truck. Sometimes the clutches on trucks take a little more strength or effort to use, but not on this truck.

For a truck, the Dodge handled pretty well. Acceleration and braking are what you would expect with this type of vehicle.

The interior is in VERY GOOD condition. I did not notice any tares or significant stains on the seats and carpet.

The truck has passed a Virginia State Safety Inspection. Mechanically, we put new struts on the front end and the engine is strong.

One of things I like about this truck is even though is a 2-wheel drive, it sits up like a 4-wheel drive truck. It also has a nice bed liner already in it.

I think this would make a nice truck for anyone looking to have a truck for full-time work or just for weekend projects around the house.

I checked the AMV (Average Market Value) on the truck by comparing prices from four sources: Kelley Blue Book, NADA, Edmunds and Manheim Auto Auctions and got $10,645 as an Average Market Value. The Dodge is offered for sale at $9,950.

To schedule a showing and test drive, please contact me at 434.566.0107 or e-mail me.

 
 

A 10-Step Take Action Plan: Part Three - Reading Your Credit Reports

Laws have made it easier for you to access your reports, but they haven’t made those reports easier to understand. Credit reports have come a long way since the first credit report appeared looking more like NASA code than someone’s credit history. The good news is, today’s credit reports are NOT rocket science.

There are hundreds of different credit report formats in use today. An explanation of each would not only make for a very boring read, but it would also be impossible for me to teach you in this report how to read each format. The good news is that you don’t have to know how to read every format to manage your credit. Once you learn the basics, you will be able to apply your knowledge to any credit report you lay your eyes on. Here are some helpful hints on what to look for as it relates to the format of each:

Equifax

Equifax mixes positive and negative trade lines. This makes Equifax’s report the most difficult to read. As a general rule, Equifax will list public records first, and most collections separately. However, sometimes collections are intermingled with other trade lines, so review every trade line carefully and thoroughly. Late pays are listed at the very bottom of each trade line under the section title “Account History with Status Codes.” Personal identification and demographic information is on the first page, and inquiries are listed in the back of the report.

Experian

Experian separates positive from negative all the time. As a general rule, Experian will list public records first, then all “Potentially Negative Items or Items For Further Review” followed by “Accounts In Good Standing.” Inquiries, and personal identification and demographic information are located in the back of the report.

TransUnion

TransUnion follows suit with Experian, by separating positive from negative accounts. As a general rule, TransUnion will list public records first, then all “Adverse Accounts,” followed by all “Satisfactory Accounts.” Personal identification and demographic information are on the first page, and inquiries are listed in the back of the report.

WORD OF CAUTION: When you dispute with a credit bureau, they will respond with a copy of your updated credit report. So if your action plan begins with an online version of your credit report, the version that you receive in response to your dispute will be different. Don’t be thrown off. The mailed version contains the same information, just laid out differently.

In Part Four, you will receive some great tips and information about how you can create an effective Take Action Plan Checklist. Be sure to keep an eye out for this important information.

Are You A Professional Looking For Invaluable Content Like This Article To Educate Your Clients & Referral Partners? Click Here!

2003 Mini Cooper Review

The 2003 Mini Cooper is a REAL fun car to drive. At the time of this review, this Mini has around 79,000 miles on it. Here are my thoughts and comments on this vehicle.

I don't recall ever driving a Mini before, so it was a treat to take one out and put it through the paces. This Mini handles easily and really well. It is peppy with plenty of performance coming out of it's 1.6L engine. 

Mechanically, the vehicle has passed Virginia State Inspection.

Body wise, the Vehicle History Report shows no accidents (but you should never trust Carfax or AutoCheck to tell you whether or not a vehicle has been in an accident). Upon my body panel review, I did find that part of the right rear bumper and probably part of the right rear quarter panel to be painted. Whatever damage there was must have been minor and the repair and paint work are done professionally. IT IS A NON ISSUE! And by the way, when was the last time a car salesman told you a vehicle had been painted when the Vehicle History Report was clean? Probably never...until now!

The Mini is priced at $10,999. Kelley Blue Book estimates the value to be $11,425 and NADA estimates the value to be $10,800.

To schedule a showing and test drive, please e-mail me or call me at 434.566.0107.

*Remember, there are about 7 million vehicles sold per year and about that many accidents are reported per year. The odds are, at some point in time a vehicle will have paint or body work done to it. 

Credit Myths That Put Your Score At Risk

It seems everywhere you look, some program or Web site offers credit fixes, offers and deals that make it seem so easy to consolidate debt or, worse, get “easy credit” to buy the things you need. They offer “free credit analysis”-many of which will most likely lead you down a path of credit destruction. Most of what is out there is just plain misinformation and contradicts the steps you are taking to improve and maintain your credit scores. The best defense against making a credit blunder is to better educate yourself about credit and ways to manage it.

Consumers and credit professionals wage the battle for credit education and improvement on several fronts. Initially, I want to help you become aware of the fact that credit scores and reports hold the key to all hopes of obtaining financial freedom, the best rates on home and auto loans, and of course, the American dream. I understand the system and I know how you can benefit from taking the smartest steps. If I do my job well for you, I will help educate you on the factors that make up your score, ways to navigate the system, and how to get good credit and keep it.

One of the ways I can help you avoid the traps of dangerous credit mistakes is to challenge 10 common credit card myths. Once you learn the truth behind these myths, you’ll be in a more knowledgeable position to distinguish between positive credit options and negative credit advice that can destroy your credit scores.

10 Credit Card Myths That Put Your Score At Risk

Myth #1: You Should Avoid Using Credit Cards - FALSE!

There are many finance experts out there that advise consumers to stop using their credit cards, pay off everything, and go to an all-cash plan. That may be a good way to get rid of debt, but it’s utter destruction to your credit score. Why? Because per Fair Isaac, the creator of the credit scoring system, there are 5 factors that make up your credit score, one of which is how you use and manage your credit card debt-a factor that makes up 30% of your score. That’s 255 points!

In order to prove to the scoring system that you know how to manage revolving debt, you MUST have active credit card accounts. Use your cards every month, for groceries, gas, etc. and pay them off every month. If you do not have a credit card at this time and your scores are under 650, you should consider immediately applying for a secured credit card. If your scores are high enough (ask your bank what the score requirements are), you may want to consider going to your bank to apply for a card. Exception: Do not apply for credit of any type when you are about to enter into or have already entered into a loan transaction. New Credit temporarily brings down your score due to the debt and the new account.

Myth #2: Consolidating Debt Onto 1, Low-Interest Credit Card Will Increase Your Scores - FALSE!

Everyone gets the offers: “Dig yourself out of your financial hole with a balance transfer.” They tempt you with big checks, one with your name printed on it. “Take a vacation. Improve your home. Or, just consolidate your debt. These checks are yours to do whatever you want.” Sounds great, doesn’t it? And it would be great except for the fact that if you consolidate all of your debt onto one credit card, you will max out that card and your credit score will drop 80-100 points overnight! Oops, they forgot to tell you that, right! Per Fair Isaac, if you have a maxed-out balance reported on your credit card statement, you can lose 75+ points instantly, regardless of how good your credit history is. Do not consolidate your credit card debt onto one low interest card UNLESS if after transferring the debt the balance on the credit card you are transferring to is under 30% of the available limit.

Myth #3: It’s Okay If You Go Over Your Credit Card Limit Because The Credit Card Company Authorized the Purchase - FALSE!

Nothing is further from the truth. Don’t go over your credit card limits, even if it’s just by one dollar. Doing so deals you a double penalty and you could lose 80-120 points from your scores. Why? Going over your limit makes it appear that you cannot hold to a creditor’s agreement and that you are overextended. Something to note: even if you call your credit card company and they approve an additional $200 over the telephone, you still get penalized.

Myth #4: Closing Credit Card Accounts Will Help Your Score - FALSE!

Don’t close credit card accounts at all, with the exception of closing a joint account after a divorce. You will lose points in two factors when you close a credit card account, both in the Amounts Owed factor which is worth 30% of your credit score, and in the Length of Credit History Factor which is worth 15% of your credit score. (These 2 factors combine to make up nearly half of your credit score, so pay attention here.) The more available money you have that you are not using, the better your score, and once you close the account, you lose the available limit on that card. Also, a common misconception by consumers is they believe when you close a credit card account, any bad history on that account goes away. This is not the case. That history stays with you.

Myth #5: Becoming an Authorized User on Someone’s Credit Card Makes You Legally Responsible for the Account - FALSE!

It is true that any activity on these accounts, good or bad will show up on your credit report if you are an authorized user, but unless you are a JOINT owner or Co-Signer of the account, you are NOT legally responsible for terms of the agreement with the creditor, and you can have your name removed from the account at anytime. Keep in mind that if any negative history reported during the time your name was on the account, that history will remain, but no further negative history will be reported.

Myth #6: The Type of Credit Card Doesn’t Matter - FALSE!

The credit scoring system does not like third-party finance cards (i.e. department store cards, furniture store cards, etc.) Always try to stick with major credit cards (i.e. Visa, MasterCard, etc.)

Myth #7: Your Divorce Decree Protects Your Credit Score - FALSE!

Even if your divorce decree stipulates that your ex-spouse is financially responsible for debt that is held in both your names, you remain financially liable for that debt until it is paid in full. Both of you entered into a binding contract with the creditor. If your ex-spouse is named as the responsible party for a jointly held debt, and you cannot afford to pay off the account and close it immediately, then you should monitor the account closely to make sure it is being paid on time. Otherwise, negative payment history information will appear on your credit report, and could drop your score by up to 75+ points overnight. Keep in mind that it is against the law for a creditor to remove a late pay without documented proof that it was their error. One late pay can affect your score for many years.

Myth #8: Marrying Someone Who Has Poor Credit Will Hurt Your Credit Score - FALSE!

Although getting married generally means that you’ll be combining finances, your credit reports won’t be combined. If you open a joint account, the credit information will show up on both reports, but your (or your spouse’s) past negative credit history won’t be reflected on the other person’s credit report unless you add your spouse as an authorized user to an account that has a negative history.

Myth #9: Making Arrangements to Pay a Charged-Off Credit Card Account Will Help Improve Your Score - FALSE!

If you have an old charged off credit card debt and you make payment on it, or make a written or oral promise to pay it, you will renew the 7 year credit reporting statute from that date. The best path to take in this instance is to debt negotiate. Offer the creditor .30 - .40 cents on the dollar as payment in full in exchange for a deletion letter from the creditor.

Myth #10: Those Pre-Approved Credit Card Offers Do Not Hurt Your Score - FALSE!

Just because credit is offered to you, does not mean that you should accept it. When you receive one of those pre-approved credit card letters in the mail, your credit report has not been pulled yet, so you are NOT approved for the account. Once you pick up the phone to call the creditor, they will pull your report and you will be penalized immediately for the hard inquiry (10% of your score.) It is best to avoid these types of special offer credit cards (including Department Store offers of “Open an account today to save 15% off of your purchase.” The scoring system frowns upon 3rd party finance cards.

In Conclusion

The bottom line about misinformation? It’s always going to be out there, and many empty promises presented are tempting-but if something seems too good to be true, it probably is.

A 10-Step Take Action Plan: Part Two - Getting Your Credit Reports

Today, you have access to your credit information all day and every day. This is wonderful news. Consumers now have the opportunity to quickly correct and maintain credit reports. It is mission- critical for consumers to seize that advantage by assuming responsibility. Lenders, employers, and vendors judge you based on your credit reports and scores, and they know that we are capable of doing so. The days of excuses are in the rearview mirror.

You can get started by acquiring a copy of your credit reports from each of the three major bureaus. It is important to get reports from each of the three - not just one. The bureaus do not share data, so you need to get a full accounting of everything that is being reported.

You options are as follows:

OPTION 1: Free Credit Reports

By law, each of the nationwide consumer reporting companies, Equifax, Experian, and Trans Union, must provide a free copy of your credit report, at your request, once every 12 months. To read more about this, a good source is the Federal Trade Commission’s Consumer Alert that you can download at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt156.pdf.

You can access this program in one of three ways:

• Go to http://www.annualcreditreport.com; or
• Call 1-877-322-8228; or
• Complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can download the form with instructions at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt156.pdf.

WARNING: I understand that during financial hardship, free credit reports are very tempting; however, I must warn you that these reports are very difficult to read.

This program does not offer free credit scores. It is highly recommend that if you decide to take advantage of this program that you order your scores at the same time. The fee is usually around $7.95 per bureau.

A Warning About Imposter Websites

Only http://www.annualcreditreport.com is authorized to provide the free annual credit report mandated by law. Other websites make claims for free credit reports, free credit scores, or free credit monitoring, but they are not affiliated with the program, and they are likely trying to sell you something.

OPTION 2: Third-Party On-Line Vendor Reports

There are many websites that offer credit reports and scores to consumers (i.e. freecreditreport.com, truecredit.com, etc.). They offer multiple ways to get your reports. You can make a one-time purchase, or join a monthly program. You can get all three reports and one credit score, all three reports and three credit scores, or one report and one credit score. In all cases, the data is taken from all three credit bureaus, and the scores are calculated by applying very general criteria that is not specific to any one use. Here is the problem with third-party credit report vendors — the scores generated by these companies are not realistic to the lending industry. For instance, many third-party vendors use a score range between 501-990, but the scores used by 90% of the lenders and creditors across the nation are classic FICO scores that range from 300 to 850. So whenever joining an on-line credit watch program, you want to be sure to choose a program that uses a score range as close to the classic fico as possible.

Here are a couple of resources that use a score range that is very close to the FICO range of 300-850. Both of these companies offer memberships that give you access to your updated credit reports and scores as often as you would like, and pulling your reports from these companies do NOT cause a hard inquiry to your scores.

• Credit Keeper - Take advantage of CreditKeeper for the first 30 days at no cost. After that, CreditKeeper is only $ 9.99 per month, until you decide to cancel. This is an Internet-only offer, so you will need to sign up on-line.
• Privacy Guard - Now, you can try PrivacyGuard with the first 30 days for just $ 1. After that, Privacy Guard is $ 16.99 per month until you decide to cancel.

OPTION 3: Reports From the Major Credit Bureaus

The reports that you receive directly from the three credit bureaus are easy to read. More importantly, going straight to the source of the data will ensure that you have the most complete information being reported about you. This includes your credit accounts, your credit history, and your personal and demographic information.

But there are a few things to consider with this option. Experian and Trans Union’s Consumer site, truecredit.com, no longer offer FICO scores to consumers. As mentioned above, FICO is the scoring range used by 90% of the lenders in this nation. Point is, that if you purchase a credit score directly from Experian or Trans Union’s truecredit.com, the score will be misleading and will not be realistic from a lender or creditor’s point of view.

What Can You Do?

1. Here’s the good news, Trans Union still offer’s FICO range scores through their website at www.transunioncs.com. This is the only site where you should purchase your actual Trans Union report and Trans Union score.
2. As far as Experian, as of February 2009, consumers do not have access to their FICO score based on Experian data at all. So our advice is when using this option of going direct to the bureaus, you should only purchase your Experian credit report (NOT SCORE). The best gauge to determine what your Experian FICO score would be is to compare the information on your Experian Credit Report to your Equifax and Trans Union reports. However, if you feel that you MUST have your Experian score, then we suggest that you go onto the next option.

Here is the information you need to purchase your reports from the bureaus directly:

• Equifax Single Report and Score - Score Power - Cost: $ 15.95 (800) 685-1111
• Experian Single Credit Report - Cost $ 10.00 (888) 397-3742
• Trans Union Single Credit Report and Score - Cost $ 14.95 (800) 916-8800

WARNING: When you log onto each site, they will try to up sell you with many different products, including credit watch programs or 3-in-1 credit reports and scores for three times the price. Make sure that you only purchase the credit report and score from that bureau as outlined above.

If you have been denied credit or insurance within the last 60 days, if you are disabled, unemployed, or on welfare, you may be entitled to a free copy of your credit report. If this is the case, send a written request to each credit bureau.

In Conclusion

Remember that every feat, small or large, deserves appreciation. One point can save you thousands of dollars; and one point can make the difference of whether or not you have access to funds to send your kids to college. Get your credit reports and scores TODAY!

In Part Three you will learn some great tips about how to read your credit reports and scores. Be sure to keep an eye out for this important information.

Are You Credit Ready

In an economy riddled with increased expenses and stringent credit standards, the businesses and households that will successfully navigate through the period of economic recovery will do so because their credit scores will get them access to credit and cash, empowering them to forge ahead and capture opportunity while those around them fold.

Great fortunes are made in times of great peril. Like no other time in the last 80 years, those with great credit will have the opportunity to capitalize on opportunity for long-term success.

How Can You Be One of the Winners?  By making sure that you are Credit Ready at all times.

A 10-Step Credit Improvement Take Action Plan (TAP)

The information provided in this Ten-Part Series contains a 10-Step Action Plan that you can start putting into action right now.  Here are the steps, plain and simple:

1. Set Your Score Goal
2. Get Your Credit Reports
3. Read Your Credit Reports
4. Make Your TAP Checklist
5. Decide & Act: Dispute, Negotiate or Wait
6. Get Your Mix In Check
7. Manage Your Debt Strategically
8. Don’t Fall Through The Cracks
9. What If You Don’t Have Credit
10. Commit to a Maintenance Plan

This plan will help you or your business strengthen your credit reports and scores — regardless of where you are right now.

• If you have excellent credit, this series will help you ensure that it stays that way.
• If you have good credit, this series will help you improve it.
• If you have fair to poor credit, this series will help you improve your credit scores and ensure that you avoid the extremely painful adjustments that await those who take no action.

Step 1:  Set Your Score Goal

The first step toward the success of any plan is to define your goals. Goals can be both short-term and long-term. Here are some examples of why consumers may want to start taking action on improving their credit scores NOW:

1. To make the most of your current credit rating;
2. To purchase a new home, auto, or send your kids to college;
3. To refinance your existing home or auto loan;
4. To lower interest rates on all of your accounts so that you can save more money for retirement; and
5. To be in a position of financial freedom at all times—being able to walk into a mortgage lender, auto lender, or bank and not ever having to worry about being denied credit. I call this Credit Ability.

These are great reasons, but they all have one thing in common; they all require strong credit scores. So although these reasons create a good start, setting the ultimate score goal is the best way to succeed. I make sure that my clients have all of the information they need to be realistic in setting their goal score, and once they plant that number in their minds, there is little that can stand in the way of their success. For the purpose of this series, your ultimate score goal should be nothing less than a 750.

Once you know your score goal, write it down and put it in a place where you will see it every day—the bathroom mirror, the refrigerator, or your computer monitor. This positive reinforcement will keep you motivated.

Be realistic about the amount of time it will take to reach your goals. If you have credit challenges such as collections, charge-offs and public records, then allow at least 6-12 months to start seeing substantial improvement in your credit scores. However, if your credit challenges are basic, which includes general clean-up, credit card balance issues, or not enough credit, then you need at least 3-6 months.

Either way, remember that every feat, small or large, deserves appreciation. One point can save you thousands of dollars; and one point can make the difference of whether or not you have access to funds to send your kids to college. Set your goal score TODAY!

In Part Two, I will be talking about your options of getting access to your credit reports and scores.  Be sure to keep an eye out for this important information.

Why You Should Buy A Used Car Instead Of A New One

I hate losing money. I hate getting ripped off and being had. That is why I don't buy a new car.
Why buy new when you can buy used and save a lot of money?

In most cases, buying new is a foolish choice to make. You can buy quality used/pre-owned vehicles for 25-75% less than a new vehicle. Yes it is a little harder and you have to do more due diligence, but it is worth it. There's no reason why you can't find a good quality vehicle with up to 100,000 miles on it and be able to keep for another 100-200,000 miles.

Example, my last two cars:

• 1993 Acura Legend bought in 2000 with 98,000 miles on it. That car new was around $33,000, I paid just over $10,000. It now has 245,000 on it. I've never done nothing more than routine maintenance. The same maintenance you would have to eventually do on a new car.The car has been great. Only recently have I had a major issue...a blown head gasket...caused by excessive over heating...caused by a faulty thermostat...that should've been replaced earlier...cost on thermostat? Less than $30...cost to install it? About $60. Now I will purchase a used replacement engine from Japan that only has 30,000-50,000 miles on it (about $1500) and have it replace (about $1,500 in labor). Yes it will cost me about $2,500-3,000 to replace the engine, but that is a lot cheaper than buying a new car.
• 1987 Acura Legend bought in 1995 with 111,000 miles on it. That car new was over $25,000. I paid $3,700 for it. I never did anything out of the norm on that car either. I drove it till 285,000 miles. It started having some faulty issue with stalling while driving. I couldn't get anyone to figure it out. I ended up selling it to a mechanic. He took it home and had it fixed in a day.

So in the past 15 years, I've owned two cars and have spent about $14,000 on them combined. I've driven them for a combined 323,000 miles. That equals about .04 cents per mile to drive. Now compare that to buying say a new like vehicle for $25,000 (in reality much higher) and only driving it for 100,000 miles (or less, like most people). That cost equals .25 cents per mile...OR SIX TIMES HIGHER!

Vehicle Quality Reviews

This is my Vehicle Quality Review that I do on each vehicle and then share it with my clients.

How To Safely and Profitably Sell Your Car

1. If your state requires vehicle inspections, get a new/current one done. Some people like to know that the car has passed a state inspection.
2. Change the oil.
3. Clean the car really, really well inside and out, under the seats, all the nooks and crannies, shine the tires, wax the car, etc. A good first impression does help.
4. Advertise it on Craigslist and consider AutoTrader. The trouble with AutoTrader is, it is dominated by dealers. **Note: If you do Craigslist, be sure to post it to at least the localities within a hundred miles from you. That is what I like least about Craigslist is you can't do a radius search (not that I figure out anyway). But there is a service called SearchTempest.com that allows people to search Craigslist by zip code radius search.

When advertising do the following:

1. Check to see what others are asking for theirs.
2. Put up several exterior photos, picture of the engine, trunk, and several interior photos including a picture of the odometer.
3. Explain clearly the basics of the car (year, make, model, miles, color)
4. Explain the condition of the exterior and interior (make note of any defects, but don't overemphasize)
5. If the car has been in an accident or had any body work, explain what happened and how long ago.
6. If the car has had any major repair (trans, engine, etc.) explain and give time frame.
7. Note any recent repairs and/or service work that has been done. If you have service records make that known.
8. Above all, be perfectly honest about the car

When someone is interested in your car:

1. If you are a woman, I would have a husband, father, brother, significant male be there when showing the car
2. Get a full name and number prior to giving them your address or where you will meet them. If you meet them somewhere other than your home, have another person follow along in another car.
3. When they arrive, ask them to show you their drivers license...make sure it is valid and current before letting them drive your car. Take down the address.
4. Going on a test drive with them is a gut call. I don't usually do it. I think most people prefer to go by themselves. Some may want you to come along, if they do and they look trustworthy, then make that call.
5. For $1700, I would do cash only and give them a receipt. If someone pays by money order or certified check they are generally good. You can always go cash it or deposit it right then and there.
6. If the buyer wants to take the car to a professional service place/mechanic to have them check it out, by all means let them. Find out which service shop and what time YOU should take the car by to have the shop check it out. If they want to take it to their "mechanic friend", then that is another gut call. If I trust them, I would probably do it. I would just want to know when, where, who, and how long for.

After they agree to buy the car, you need to deal with the tags on the car. You have several options:

1. You can let them go with the tags on the car and ask them to mail them back. I would not do that, but that's me.
2. If they are somewhat local, you can drive the car to their home, take the tags off and have someone bring you back or follow along to bring you back.
3. They can run down to DMV with the title and get new tags and then come back.
4. You can take the tags off and have them haul it/tow it away.

 

Forbes: Worst Made Cars On The Road

Here's an article from Forbes Magazine about what they say are the Worst-Made cars on the road.

Articles like this can be helpful, but you sometimes have to take them with a grain of salt. The surprise vehicle on there to me was the Ford F-250.

Here's the article.

Die-hard drivers: 200,000 miles and up

Yes, you can keep a car up to 200,000 miles and beyond. I am a firm believer in expecting to get at least 300,000 miles out of a car. To most people that seems far fetched, but it is not.

I personally don't typically buy a car till it has around 100,000 miles on it. And except for one vehicle, I've never had any issues. Let me share my tips with you.

1. To start, you need to buy a good quality used vehicle. I usually buy either Acura's, Honda's or Toyota's. Of course there are other good quality vehicles on the market.
2. When I buy a car, truck or van I check it out. I take for more than just a "test drive." I like to drive it for 50-100 miles. This gives me time to find out if I really enjoy driving the car, am I comfortable in the vehicle and are there any apparent issues that I am noticing.
3. I may or may not take a car to a mechanic. Because I'm in the industry, that does give me an advantage, but I am no mechanic, so if I feel the need, I will take it to a mechanic and have them check it out.
4. I also get up close and personal to the car. I check the paint work by looking for overspray, "orange peel," and other signals that the vehicle has been painted. I look for any apparent body work as well. Now you might be surprised, but in my experience I would say that somewhere between 25-50% of vehicles on the road have some sort of paint and/or body work. In most cases it is not a big deal. Let me point out something that you must understand. You can not trust CARFAX or AutoCheck to tell whether or not a vehicle has been in an accident. I do suggest you get a CARFAX or AutoCheck report, but I urge you not to trust it when it comes to telling if the car has been in accident. The fact is, CARFAX and AutoCheck don't know about most of the accidents that vehicles are in. Plus their data is not always current. Keep posted because we plan on holding a consumer seminar and workshop on how to tell if a car has been in an accident.
5. When I own a car, I seek to take good care of it by changing the oil every 3,000 miles and keeping the fluids filled, the filters replaces when needed and taking care of basic maintenance when needed. I don't take my car to the new car dealer for service. WAY TOO MUCH MONEY. I find a good local mechanic to take my car to. Here in Charlottesville, I have been very please with Airport Auto Center on Airport Road. I also highly recommend a mobile mechanic. He is an ASE Certified Technician that comes to you. If you would like his number, please e-mail me.

Our family currently has two vehicles. A 2003 Honda Odyssey with almost 100,000 miles on it. The only odd issue I've had was power window issue some time ago and just recently one of the rear windows is not functioning properly. These are minor repairs. I also have a 1993 Acura Legend with almost 250,000 miles on it. It was running great, until I had a couple overheating issues. Now I have a blown head gasket. My solution? I will get a "Take-Out" engine and have it put in. A "Take-Out" engine is an engine that comes from Japan and was taken out of the same vehicle at around 30-50,000 miles. Because Japan has very high emissions standards, vehicle owners are required to replace their engine every 30-50,000 miles.

So I can buy a Take-Out engine for around $1,500 and have it put in for $500-1,000. Bottom line, I get a relatively unused engine for $2,500. THERE'S NO WAY I COULD BUY ANOTHER USED VEHICLE OF SAME QUALITY FOR THAT MONEY!

I hate wasting money or getting ripped off. And just about every time you buy a new car, you are getting ripped off. Ripped off, because of the depreciation, not because they charged you too much. So buy a quality pre-owned car before you buy a new one. It is a wiser financial decision!

This article from CNNMoney shows some people with high mileage cars.

For more information, keep posted or contact me here.

Airport Auto Exchange sells used, pre-owned cars, trucks and vans in Charlottesville, Virginia to a diverse clientele. Call or stop by.