July 24th, 2008
You pay plenty for medical insurance and you count on it to pay your medical bills so you don’t have to worry about them should you get hurt or become ill. Once you’ve covered the co-pay you should be home free.
And you should. But unfortunately that’s not the way it works.
All it takes is for a data entry person to code your claim incorrectly, and your insurer will disallow the claim. In other words, the bills won’t be paid.
Unfortunately, the people doing data entry are generally minimum wage workers who are only “putting in their time” and don’t really care if they make errors, as long as they can get through the day and go home. It really doesn’t concern them if your insurer disallows the claim – or if the doctor or hospital ever gets paid.
So, what happens? There you are, doing your best to recover from illness or injury, and these bills keep arriving. The medical field is notorious for sending garbled bills that require some kind of degree to decipher – and they send them in little spurts, so it’s difficult to see if they’re all different, or duplicates. It’s even hard to figure out if you actually got the treatments they’ve itemized, because they have strange names and codes.
So you set them aside, assuming that eventually all the bills will find their way to your insurance company and will be paid.
Then, after several months or even a couple of years, you begin getting collection letters – and you realize that your credit score is in the basement because of bills you assumed had been paid.
Here’s what to do:
• Get the medical claim number from the collection company
• Call your insurance provider and discuss what the problem was
• Get something in writing from the collections company to delete collection from all 3 credit bureaus after you’ve verified there was a code entered incorrectly.
• Once you receive this letter, mail it via certified mail, along with a dispute letter, to each of the credit reporting agencies listed below. Then be patient, because it takes about 30 days to delete misinformation.
• After 60 days, pull your credit report to make sure all 3 credit reporting agencies have removed the collections.
It’s true that certain lenders disregard medical collections – just as some disregard collections from health clubs because of their unethical practices. However, some creditors will look only at the overall score – and those medical collections will definitely lower your FICO score.
The three major credit reporting agencies:
Equifax
P.O. Box 740256
Atlanta, GA 30374
Experian
NCAC
P.O. Box 9595
Allen, TX 75013
Trans Union
P.O. Box 2000
Chester, PA 19022-2000
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July 23rd, 2008
What is “It?”
Identity theft. It happens every single day, and you could easily be its next victim. Now that almost all of our personal information is somewhere on line, talented hackers can learn almost anything they might want to know, about anyone.
Just a few months ago the Veteran’s Administration announced that thousands of names had been compromised due to carelessness on the part of one employee.
It seems crazy to want someone else’s identity, but these thieves have some pretty strong reasons for doing it – almost all of them having to do with money.
With your identity, the thieves can drain your bank account, use your credit cards, and even open new credit card accounts in your name – so the bills will be reported in your name, not theirs. Some of them steal multiple identities, so they can make a big haul and then disappear.
Think about it – Using your identity, they can check “their” credit, identify accounts you aren’t using, send a change of address to them, and request new credit cards. You wouldn’t even know a charge had been made, because the bill would be going to a bogus address. And since you weren’t using the account, you wouldn’t miss the bill.
These people are without conscience – they don’t care what kind of havoc they wreak in your life. They don’t care if they leave you destitute, destroy your credit, and leave you in legal entanglements for the next few years.
So what to do?
One precaution is to freeze your credit report, but that isn’t a practical solution for everyone. The next best thing is to keep a constant watch on your credit report, so you can know right away if someone is trying to obtain credit using your name.
You can do this by checking your credit report regularly, watching for new account activity, address changes, collection accounts, credit increases or inquiries, etc. It’s a tedious job, and one you must perform regularly, because early detection is the key to stopping a financial loss before it becomes devastating.
The more convenient alternative is to sign up for a monitoring service. But even then, be careful. Check to see that the service you choose monitors all 3 of the major credit reporting companies, and that they do it frequently enough to nip trouble in the bud. Some even provide identity theft insurance – to protect you in the event that they make a mistake and overlook the early warning signs of a thief.
As with all services, some are better than others, and some are downright scams. Ask questions, read the fine print, and then choose a company to set your mind at rest. Not only will you be able to get on with your own life, a good credit report monitoring service will get you in the right direction. This is one of those do-it-yourself projects that’s better left to the experts.
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July 23rd, 2008
When you think of needing a good credit score, the first thing that comes to mind is buying a home. Next is buying a car, and third is probably the ability to get a credit card.
It’s true, a good score will help you in all those areas. Not only will it make you eligible for a home, a car, or a new credit card, it will mean that you will be granted a lower interest rate than someone with poor credit. Your buying power will be larger, because less of your money will be drained off to pay interest.
Just think, if you borrow $30,000 for a new car and pay just 1% more interest than your neighbor, you’ll spend an extra $300 per year – $25 per month that you could be using for other things – just on interest. If you pay 2% more, that’s an extra $50 per month. Of course, the lender will probably let you stretch your payments over more years, so your payment might be the same as your neighbors, but you’ll pay it for an extra one, two, or three years.
That doesn’t sound like fun at all, does it?
But that’s not all. Your credit score could mean the difference between having and not having a cell phone, or satellite TV service. It could also mean the difference between an affordable insurance rate and one that makes you want to sell your home and your car just to avoid the premiums.
Not buying a house? Prospective landlords also check credit before deciding if they’ll rent to you. After all, if you’ve got good credit you’re more apt to pay your rent on time. When your credit report shows late payments or defaults, they’ll form the opinion that you don’t care much about paying your bills. So naturally they’ll choose a tenant with good credit over a tenant with bad or even marginal credit.
But that’s still not all. Professional employers check credit before hiring employees. When your credit is good it indicates trustworthiness and responsibility. When it’s poor, the prospective employer suspects that you’re disorganized, irresponsible with money, and just might not be conscientious in caring for the company’s best interests.
This practice is especially prevalent in employment fields tied to financial practices – banks, accounting firms, and treasuries.
The first step you need to take is to learn about your current score. Get a free credit report from an online provider, read it carefully to make sure it has no errors, and then begin working to make it as good as you possibly can.
About the Author: Mike Clover is the owner of http://www.creditscorequick.com/. CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness
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July 23rd, 2008
Getting denied for a mortgage can be humiliating but there is life afterwards. If your credit score is too low because of the current restrictions in the lending industry, I can tell you what you need to do. In this article I will give some tips in regards to better preparing yourself for a mortgage when you credit report may not look too good. With FHA being the most attractive loan in this market, here are some key points lenders are looking for.
• 580 middle credit score
• 12 months clean credit report history
• No foreclosures during the last 3 years
• No Chapter 7 bankruptcies during the last 2 years.
• Must have 2 year work history
• Must have provable income with either two years w2’s or two years tax returns with provable income on Schedule C of tax return.
• Must meet max FHA loan limits in your area. Go here.
• Underwriters look at 24 month credit report history with most infuses on the last 12 months. So make sure your credit report does not look like you have had total disregard for your obligations.
• Good 12 month rental history
• 3 lines of good credit reporting on your credit report for the last 12 months. Alternate lines of credit will work. Example: Letter stating you have been on time with any of your utility bills, car insurance, internet bill, etc…….. for the last 12 months as well.
• Save at least 3% of the amount of house you are buying.
These are some key points to getting a FHA mortgage loan in today’s market. If you credit scores are low, here are some key tips to increase your credit score.
• Make sure you have at least 3 lines of credit reporting on your credit report. These lines of credit should be at least 2 credit cards, and maybe a car note.
• Keep your credit balances below 30% of allowed credit limit
• Don’t be late on anything
• Remove any information that has expired, or is inaccurate.
If you follow this simple process you will be buying a house before you know it. If you don’t know what is on your free credit score report find out today !
About the Author: Mike Clover is the owner of http://www.creditscorequick.com/. CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness
Posted in fha mortgage loans, free credit score reports | 1 Comment »
July 23rd, 2008
With identity theft becoming the biggest crime ever, identity thieves have figured who that the young and elderly are easy targets. These two types are easy victims because they typically are not checking there credit and they are not buying anything credit. With this going on it only makes sense to check your child or elderly family members credit reports often.
You have to remember the identity thieves are getting smarter and smarter with whom to go after. After all this is their profession. Current statistics show that less than 33% of the US population checks their credit report, and when they do there may be some unexpected surprises.
With all the banks going out of business banking will never be the same. No one wants to repeat what is currently taking place. So with your credit worthiness being very important, the last thing you want is love one dealing with is bad credit because of identity theft. I would allocate at least 30.00 per quarter to check you child’s or parents credit reports. You can also check their credit report once a year at www.annualcreditreport.com, just be advised you don’t get your fico scores there. You will need to pay for them. So if you want to know there credit scores with each credit bureaus, you may consider a website that offers a 3-1 credit report with all 3 credit scores.
Having this piece of mind is really worth it. There are lots of skeptical people out there about his whole matter. They don’t do anything until it’s too late. If you are still not convinced check the FTC website. They discuss it everywhere since this problem is on epidemic proportions.
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July 23rd, 2008
Q:
Hello,
I have run into credit problems during the last 2 years. Once the economy in the real estate industry went bad, I had to let all my credit cards go. My credit report is ruined now along with my once good credit score. I have starting settling on all my credit cards which everyone has been eager to do. What I need to do now is re-establish my credit again since everything went to collection. What credit card do you recommend I apply for? Can I even get a credit card with my credit scores the way they are now?
Bob Lutz
A:
Hi Bob,
Sorry to hear about the real estate affecting your credit report. You are not the only one that has felt the affects of what has gone on in Real Estate. Since you are settling on your debt currently your credit score will eventually go up. Make sure that you get letters from these creditors stating that you have settled on all your debts. I just thought I would mention this. In order to get a credit card, you will more than likely need to apply for a secured credit card it does not sound like Credit Card Company will extend un-secured credit to you for while with all the recent credit card collections. Go here and select the Orchard Bank credit card. This is a low fee secured credit card. Also under the creditscorequick.com/reward_cards site there is a button for bad credit credit cards. You might also select one more within that link. You really need a couple new cards to get your credit in the right direction again.
CreditScoreQuick.com
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July 22nd, 2008
You know that the best plan is to protect your credit and keep your credit score high from the start of your financial life, but perhaps it’s too late for that. Perhaps your credit is already in sad shape, and you’re trying to come up with a good plan to repair it.
You can do it yourself, but you may be thinking that it will be faster and easier if you let an expert do it – an expert such as a Credit Repair Company. You may be right, simply because they know the process. But before you choose one, you should realize that not all such companies are honest. So talk to a few and ask questions before you choose.
The first red flag that should send you running the other direction is a promise to remove all negative information from your credit file. This cannot be done, and anyone who promises to do it is telling an outright lie.
What they, or you, actually can do is remove any inaccurate information found on your credit report. The first step, of course, is to get a copy of that credit report and read it thoroughly. Then each credit reporting company must be contacted with a formal request to re investigate and correct the mistakes.
Another red flag is a request for money up front. The Credit Repair Organizations Act says that Credit Repair Organizations are not allowed to ask you for any money until everything they promised has been done. In other words, they only get paid for results, not promises.
Some unethical Credit Repair Companies will actually advise you not to contact the reporting agencies themselves. This is a scare tactic designed to push you into using their service, and is completely unethical.
Before you begin interviewing Credit Repair Companies, familiarize yourself with the Credit Repair Organizations Act. Until you do, here’s a brief rundown on what those companies must do:
· Provide you with payment terms for their services
· Inform you of all fees and a final total amount due
· Give you a detailed description in writing of everything they plan to do
· Give you a timeline in which the process will be completed
· Provide all guarantees in writing
· Provide their company name and address in the Contract.
· Provide you with a copy of the Consumer Credit file Rights Under State and Federal Law
· Wait 3 days after you have signed a contract before working on your credit – during which time you may cancel the contract, owing nothing.
Before you sign that contract, read it thoroughly and make sure you understand and agree to each of its provisions. Only then should you take the next step.
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July 22nd, 2008
Your lender rattles off the term as if everyone knew exactly what FICO meant. But most of us don’t even know what the letters stand for.
The first part is simple: The Fair Isaac Corporation. Sounds mysterious, doesn’t it? What the heck is a Fair Isaac? Nothing. It just happens to be the names of the men who started the company.
In 1956, engineer Bill fair and Mathematician Earl Isaac joined forces to create what was originally a consulting and decision management service. Then in 1981 they devised a system for scoring the amount of risk associated with making certain loans and investments, and the FICO score was born.
The score is generated by statistically analyzing an individual’s credit history. Among other things, this scoring system takes into account:
· Bill paying history
· Debt to income ratio
· Debt to available credit ratio
· Length of time a person has had and used credit
· Existence of bank accounts
· Number of recent credit inquiries
Each factor in your financial makeup is given a “weight” toward your final score, which is a calculated risk factor, based on the past performance of others whose financial history is similar to yours. Through this score, lenders are shown the statistical likelihood that you will pay your debts. Then they determine under what conditions and at what rate of interest they will lend to you.
If your score is 720 or higher, you’ll have an easy time getting a loan. If your score is under 600, you’ll be considered a poor risk and if you can get a loan, it will be at a higher rate of interest.
FICO has become a giant in the American world of finance. In addition to providing credit scoring, FICO provides consulting and management services to over 200 international retailers, 99 of the top 100 U.S. banks, and over 100 international telecommunications companies.
Headquartered in Minneapolis, Minnesota, FICO has offices on 5 continents, employs over 3,500 people, and turns a revenue of over $800 Million every year. FICO is not associated with the government, but like Equifax, Experian, and TransUnion, is a publicly traded company.
You should always be aware of your credit score, so that you can make adjustments and take steps to keep it high. You can buy the report directly from FICO, or you can take advantage of a credit report offer from one of many online providers.
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July 21st, 2008
Credit scores are the talk of town now. Obviously the higher your credit score the better. As rule of thumb a credit score around 720 or above is considered excellent credit. Some lenders have there own internal credit score requirements for certain loan types. Some lenders have a minimum credit score requirement to even get approved.
In most cases a 720 middle credit score will get you just about any type of loan. This score will also get you the best rates and terms normally. Some banks might give a little better rate if you credit score is 740 and above. But if your have a 720 fico score I would not sweat it. That type of score is considered low risk to most creditors.
I hear people all the time thinking that if there credit score is in the 800’s they will get a better deal. This is simply not true. Typically if your credit score 720 and above regardless of your score you will get the same rate and terms as someone with a 720 credit score.
I am not saying that having a credit score above a 720 is a bad thing, but just don’t sweat it if your credit score around a 720 or so.
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July 20th, 2008
 With all the drama in the lending industry, you can still get a mortgage with low credit scores. Yes, credit scores are a big determining factor in whether you will get approved for a mortgage, but your credit scores don’t have to be all that great. The mortgage loan I am talking about is a FHA loan. FHA loans are loans that are insured by the government. For years FHA did not have a credit score requirement, and until now they require a minimum of a 300 credit score. This may sound crazy but that is the lowest credit score they will finance with all the new mortgage insurance guidelines. Nether less, typically when you have credit scores that low you have too many recent issues to get a lender to approve you anyways.
There is a market on Wall Street called the secondary market which the buying of mortgage paper takes place. Typically this paper is sold in bulk called mortgage backed securities. The investors that buy this paper may have their own internal restrictions before buying loans. These restrictions might be far stricter than what FHA requires to insure a FHA mortgage loan.
Currently in today’s market there is a minimum credit score requirement of 580. There is also changes going on within banks where they are requiring a middle credit score of 620. The reason for this requirement is because people who have bought homes below that credit score threshold have a history of foreclosing on their homes. So the investors tighten up on what type of FHA mortgage paper they will buy.
Regardless of whether the credit score requirement is 580 or 620, those types of credit scores are still considered low and a high credit risk according the Fair Isaac’s scoring model. So yes you can still currently get a mortgage down to a middle credit score of 580. You will pay higher interest rates with that score, but you will get a 30 yr fixed mortgage.
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Disclaimer: This information has been compiled and provided by CreditScoreQuick.com as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.
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