This Week in Credit News

Credit Swaps on Bank of America, Goldman Sachs Jump on S&P Cut

“The cost to protect debt issued by U.S. banks from Bank of America Corp. to Goldman Sachs Group Inc. jumped after Standard & Poor’s lowered their long-term credit ratings as it revised criteria for the banking industry.”

A New Credit Score Exposes Even More of Your Financial Life

“Earlier this week, a company called CoreLogic introduced a new type of credit file, which is based on the giant repository of consumer data it maintains on, well, just about everything that most of the traditional credit bureaus do not: missed rental payments that have gone into collection, any evictions or child support judgments, as well as any applications for payday loans, along with your repayment history.”

Credit cards: How to avoid getting tricked this holiday season

“Credit experts say you need to resist the draw to pay low and instead shell out for as much as you can afford in order to break the hold of card debt. That attraction to pay less, Salisbury says, has a greater impact on people who have the money to pay the bill, because they could afford to pay the full amount, but don’t, and end up spending money on interest instead.”

This Week’s Credit Repair Blog

Credit Repair Tips for Keeping Your Holiday Budget Down

How Your Bad Credit Could Be Hindering Your Job Prospects

This Week’s Credit Repair Q&A

Debt Settlement vs. Consolidation: The Pros and Cons

Can More Than One Collection Company Collect on a Debt?

Will Paying Off Collection Accounts Re-Age Them?

With unemployment rates in America hitting a near all-time high, the number of applications being received per position is skyrocketing. Couple the unemployment rate with the increasing popularity of employers running credit & background checks on potential employees and the situation is creating a Catch-22 for many job seekers.

This is because your credit profile may be suffering because you lost your job and as a result you have gotten behind with your bills and allowed an increasing amount of debt to be run up; the predicament is that those same actions may currently be keeping you from landing a job with prospective companies. Many job hunters are unsure whether bankruptcy, credit repair, or simply applying to a myriad of job listings in the hopes that there is no credit check is their best alternative.

So where does that leave the rest of the workforce facing this issue? Well, there is very little that people can do to change their credit profiles over short periods of time. So in reality you need to understand the financial choices that you’ve made and demonstrate to potential employers that your credit reports do not define you. There are a couple of steps that should help if you are one of the many in this exact situation.

Know your credit reports

Job seekers can’t defend their financial history if they are unaware of what their credit reports are saying to employers. Credit reports are free every 12 months from each of the three major credit bureaus – Experian, Equifax and TransUnion. They will not show you a credit score, but they do list your entire credit profile over the last 10 years exactly as employers will see it.

As a job seeker you need to be prepared to answer any questions, this includes questions about your financial history as well as your work history. If you seem hesitant or confused in your knowledge of your own finances the hiring employer is going to question your reliability and your honesty.

Be honest

Once you’ve analyzed your reports and see what derogatory items are on there, you may be able to save yourself the time and stress involved with waiting for companies to run your credit & background check. Let them know straight away what they’re going to find. Any legitimate employer will tell you up front whether your infractions are going to cost you the position. Additionally, it demonstrates your desire to be honest with your potential employer. It also affords you the opportunity to explain yourself in a manner that abbreviations and codes on your credit reports won’t do.

Would bankruptcy or credit repair services help?

Yes and no. If you need the issue resolved before a prospective employer pulls your credit in the next few days, then neither of these solutions is going to help you get that job in that timeframe. Both bankruptcy and credit repair services are time consuming processes that need to be looked at long before they can be properly implemented.

While there are laws to prevent discrimination against those with a bankruptcy on their credit reports, the same cannot be said if you are simply in debt. Again, this is another Catch-22 since bankruptcy will generally ruin a credit profile for a minimum of 2 years, affecting the score for longer as it remains on the report for up to 10 years; but at the same time there are no laws against discriminating against those in need of just some simple credit repair, which can take anywhere from 3 to 12 months to have properly done while leaving your credit score intact.

Keep your chin up

Unless they’ve lived under a rock for the past few years, everyone is aware of the state of our economy, and accordingly, the state of individual’s finances. Perhaps you ran up a bit too much debt, perhaps you got a bit behind on some of your bill; so what? It’s likely that you’re not exactly in the best position to bring everything current if you’re out there looking for a job. Employers do understand. So, the better prepared you are to discuss with them your individual situation, and your strategy to get your finances back on track, the better shot you have over another applicant who comes across as just numbers and codes listed on a credit report.

Most people do all they can when it comes to credit repair.  They pay their bills and try to keep their credit cards from making the wrong charges, but for some reason, their reports and scores never quite seem to work out as well as they hope.

To help you make some sense out of what may going wrong with your attempts at restoring your credit, the leader in San Diego credit repair services has put together a list of 5 of the top mistakes just about everybody makes in their efforts to repair their bad credit.  Check these off as what not to do when getting your finances back on track:

Closing credit cards. Despite your initial instinct when faced with a poor credit history, closing your credit accounts is actually not the best idea for credit repair.  Doing so will switch them to inactive, which means they’re now essentially dead weight and will eventually fall off your report, leaving you with a smaller credit history.  Having a shorter history can make you look less financially responsible than you are; it’s like you erased that hard work for nothing.

Late or missed payments. The first step to total credit repair is making sure your accounts are current and up-to-date, and that you haven’t been missing too many payments on your accounts.  If you need help with this, set up a budget for yourself to help you manage your money situation better.

Credit accounts are maxed-out. If you use your credit cards to pay for just about everything in life, you’re probably teetering the edge of maxed-out accounts (assuming you haven’t fallen off already…).  If this sounds familiar, consider closing any excess accounts you have and rarely use, and start paying your existing accounts down to around 30% of the available balance.

Too much shopping for new credit. If you routinely shop around for new lines of credit – that is, if you fill out every credit card application that gets shoved in your face – you may be doing much more harm to your credit than you realize.  Each credit application counts as a “hard inquiry” on your report, and unless your credit repair plan calls for 25 new credit cards (hint: it shouldn’t), stop filling these out every time you see one.

Thinking you only have one credit score to worry about. Most people think of their credit score as one number, but it’s actually three separate scores.  When attempting to fix your credit, the scores you should watch closely are your FICO scores, the model used by most lenders to determine your credit risk.  Work on getting that as high as it’ll go, and you’re one step closer to financial freedom.

This post might not have much to do with credit repair services, but I thought we’d cover an area of personal finance often left unchecked.

It seems like every other day that I come home from a long day at the office to find at least two cards that proclaim in huge, bold letters “WE PAY CASH FOR GOLD”, with a little note at the bottom letting me know they also habla español.

Now I’m seeing all of these commercials and billboards with bright, shiny faces giving these glowing testimonials, as if they just couldn’t wait to tell you about how much they loved selling away their gold.  The gold buyers will even send you a “secure” self addressed package at no cost to you for your gold shipping needs.  And I’ve never seen a single person in these ads smoking a cheap cigar.

But I wonder if the part where they rip you off has changed at all.

Gold Prices Increase

Over the past 10 years gold prices have almost quadrupled topping out above $1,200 an ounce in December of 2009.  All the commercials for gold buyers will tell you the same thing.  It gets consumer’s brains to thinking that they may have an ounce in jewelry that’s just collecting dust.  Why wouldn’t you want to turn that into $1,200?

We Could Use the Extra Money

With the economy still struggling to get back on track many Americans need extra money to make ends meet.  Selling some excess gold seems like a good way to get money for something that you’re probably not even using.  With gold prices up and Americans needing money you would think this was perfect timing for consumers to hop on board with one of gold buying companies that tries to make the process so convenient.

The Price is Wrong

When you’re selling your jewelry its cost is not calculated by the ounce, but rather by the gram or, more than likely, by the pennyweight (abbreviated dwt).  A dwt. is one-twentieth of a standard ounce.    Now, the companies that buy gold can obviously set their own prices that don’t necessarily need to be in line with what gold is currently selling for.

These are businesses that are trying to make a profit.  Nationally broadcast commercials on TV and radio aren’t exactly cheap.  This expense and others need to be recovered somehow.  This will undoubtedly come at the consumer’s expense as opposed to cutting into their profit margin.  Not only will you be given below industry minimums for your gold, but once you tack on processing fees you’ll end up with a check that shocks you with just how little you’ve received.

Lastly, there’s no appraisal that lets you decide whether you want to accept their offer or not.  You simply send your gold away and they send you a check with an amount that they deemed appropriate.

I’d Rather Stick with the Seedy Pawn Shops

At least with the pawn shops you knew you were getting ripped off and had the option to say “forget it” and take your gold back home with you.  With these mail-in cash for gold companies, not only are you getting the raw end of the deal, but you don’t even have the option of cancelling the transaction.

From what I’ve gathered the best bet is shopping around and doing so with local jewelers and gold buyers.  Local companies pay consistently higher prices then do the national firms.  Plus, very often the local companies will purchase the entire item, gemstones included.  This isn’t something you get when you sell to wholesale gold buyers.  They simply want to melt the gold down.

Also, just because gold prices are at a ten-year high, doesn’t mean that you should run out and sell everything you own.  There may be more value in having some patience with your gold.  Contemplate whether getting a quarter of what your gold is actually worth really merits your time and effort.

This post might not have much to do with credit repair services, but I thought we’d cover an area of personal finance often left unchecked.

It seems like every other day that I come home from a long day at the office to find at least two cards that proclaim in huge, bold letters “WE PAY CASH FOR GOLD”, with a little note at the bottom letting me know they also habla español.

Now I’m seeing all of these commercials and billboards with bright, shiny faces giving these glowing testimonials, as if they just couldn’t wait to tell you about how much they loved selling away their gold.  The gold buyers will even send you a “secure” self addressed package at no cost to you for your gold shipping needs.  And I’ve never seen a single person in these ads smoking a cheap cigar.

But I wonder if the part where they rip you off has changed at all.

Gold Prices Increase

Over the past 10 years gold prices have almost quadrupled topping out above $1,200 an ounce in December of 2009.  All the commercials for gold buyers will tell you the same thing.  It gets consumer’s brains to thinking that they may have an ounce in jewelry that’s just collecting dust.  Why wouldn’t you want to turn that into $1,200?

We Could Use the Extra Money

With the economy still struggling to get back on track many Americans need extra money to make ends meet.  Selling some excess gold seems like a good way to get money for something that you’re probably not even using.  With gold prices up and Americans needing money you would think this was perfect timing for consumers to hop on board with one of gold buying companies that tries to make the process so convenient.

The Price is Wrong

When you’re selling your jewelry its cost is not calculated by the ounce, but rather by the gram or, more than likely, by the pennyweight (abbreviated dwt).  A dwt. is one-twentieth of a standard ounce.    Now, the companies that buy gold can obviously set their own prices that don’t necessarily need to be in line with what gold is currently selling for.

These are businesses that are trying to make a profit.  Nationally broadcast commercials on TV and radio aren’t exactly cheap.  This expense and others need to be recovered somehow.  This will undoubtedly come at the consumer’s expense as opposed to cutting into their profit margin.  Not only will you be given below industry minimums for your gold, but once you tack on processing fees you’ll end up with a check that shocks you with just how little you’ve received.

Lastly, there’s no appraisal that lets you decide whether you want to accept their offer or not.  You simply send your gold away and they send you a check with an amount that they deemed appropriate.

I’d Rather Stick with the Seedy Pawn Shops

At least with the pawn shops you knew you were getting ripped off and had the option to say “forget it” and take your gold back home with you.  With these mail-in cash for gold companies, not only are you getting the raw end of the deal, but you don’t even have the option of cancelling the transaction.

From what I’ve gathered the best bet is shopping around and doing so with local jewelers and gold buyers.  Local companies pay consistently higher prices then do the national firms.  Plus, very often the local companies will purchase the entire item, gemstones included.  This isn’t something you get when you sell to wholesale gold buyers.  They simply want to melt the gold down.

Also, just because gold prices are at a ten-year high, doesn’t mean that you should run out and sell everything you own.  There may be more value in having some patience with your gold.  Contemplate whether getting a quarter of what your gold is actually worth really merits your time and effort.

This Week in Credit News

Credit Unions Poach Clients

“Thousands of people flooded into credit unions and small banks over the weekend as part of Bank Transfer Day, an effort to prod depositors to abandon giant banks. But at least some of the big banks won’t mind losing those customers.”

Credit card issuers raise rewards for holiday shopping season

“Credit card issuers are bumping up their rewards for the holiday shopping season as they seek to lure consumers away from debit cards and competitors. For shoppers with decent credit scores, this can provide the opportunity to pick up extra cash or miles while they do their gift shopping.”

Consumer Credit in U.S. Climbed $7.4 Billion in September

“The $7.4 billion jump was more than forecast and followed a $9.7 billion decrease the previous month, Federal Reserve figures showed today in Washington. Credit was projected to rise $5.2 billion, according to the median forecast in a Bloomberg News survey.”

This Week’s Credit Repair Blog

What You Should Be Looking For on Your Credit Report

On the Importance of Validating Your Debts

This Week’s Credit Repair Q&A

Inquiry Letters – How Do I Write One?

How do You Delete an Original Creditor from My Report

How Much Will Closing a Credit Card Lower My Score?

Say you’re in the market for a new car.  That old ’91 Oldsmobile isn’t quite cutting it like it used to, and it’s time to trade up, so you decide to spend a weekend out cruising the car lots for a new set of wheels (and maybe some sweeter rims to go with it).  Eventually, you find a car with just such a set of rims, and off you go to sign those papers.

Until the dealer turns you down on account of your poor credit history.  Suddenly, you find you’ll need to polish up your credit history before you can polish those rims, so in an attempt at credit repair, you order a copy of your report to try and see what exactly is holding you back.

Here’s what to look for when your credit history arrives.

Fatal error detected

The first thing you’ll want to do upon receipt of your credit report is verify the personal information they have listed for you on record.  Make sure you are who they say you are.  If any of your personal information such as your name or social security number, are incorrect, inform the reporting credit bureaus of the error and request it be fixed immediately.

These kinds of errors on your credit report can account for some of your bad credit history if the name or SS# listed are someone else’s with a bad credit history (conversely, they could be helping your score if that other mystery person with a similar name to yours has a good history, but that’s not usually the case, and you don’t really want to be sharing your credit report with someone else anyway).

Do these look accurate to you?

Next, you’ll want to verify your account history and make sure that information listed there is accurate as well.  Check your payment histories, and make sure they list their statuses correctly – whether or not you’re current on the account and if you’ve ever been late.  If any accounts are reporting incorrectly, get in contact with the agency reporting the wrong information (each credit bureau may report different information on different accounts, so you’ll want to look at all 3 reports when reviewing your credit history), and ask that they have their records updated with the correct info.  Having negative errors cleaned off your report will bring you one step closer to the perfect set of rims, and the car to go with them.

Will the real you please stand up?

Finally, and most importantly, check your credit report for any signs of identity theft, such as accounts that aren’t yours at all or credit inquiries from creditors you never contacted.  If you find anything here that looks suspiciously out of place, include it in your dispute to the credit bureaus and demand they take immediate action to remove the account(s).

Also, if you have a high number of credit inquiries on your report that go back over 2-3 years, ask that they have those cleaned off as well.  Having too many inquiries on your report can drop your score by a few points, depending on how recent they are, and having them removed will only increase your chances of getting a favorable response from creditors and lenders when you go back looking for good deals.

This Week in Credit News

Credit union business grows as consumers sour on banks

“Long touted by consumer groups as a more consumer-friendly option than large commercial banks, the nation’s not-for-profit credit unions saw a significant jump in new members and deposits last month as momentum in the Occupation Wall Street campaign has increased, and many of the big banks rescinded, debit card fees.”

U.S. banks to push prepaid, credit cards

“U.S. banks that have lost debit card processing revenue due to new caps on fees will likely push customers into prepaid and credit cards and other types of account fees, executives said on Thursday.”

Best Credit Cards for Holiday Shopping

“But you probably won’t give up shopping at your favorite retail stores, either. American retailers will hire nearly half a million seasonal workers to help with this year’s gift-giving crush, according to the National Retail Federation. In all, the NRF estimates that we’ll spend 2.8% more on our holiday gifts, travel, and meals this year compared to last year.”

This Week’s Credit Repair Blog

Is There Such a Thing as Too Much Good Credit?

Choosing the Right Secured Card for Credit Repair

This Week’s Credit Repair Q&A

Paying Off Credit Cards Isn’t Helping My Score

Marriage and Credit: Does Her Credit Affect Me?

Permissible Purpose for Running Credit Under FCRA

This Week in Credit News

Using Credit Cards to Target Web Ads

“Their plans, if implemented, would represent not only a technological feat—tying people’s Internet lives with shopping activities—but also an erosion of the idea of anonymity on the Web. It’s an effort by the two companies to profit by selling access to the insights they gather about people with every credit-card transaction.”

U.S. credit rating facing another cut soon, Bank of America warns

“The ratings firms are likely to draw the same conclusion if the super committee fails in its task, Harris warned. “The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan,” Harris wrote. “Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes.”

Credit Rating Companies Favoring Borrowers Paying Most

“Credit-rating companies routinely award higher rankings to debt issued by banks and corporations that pay them the most, a conflict of interest that may escape Congressional efforts to change the way they do business.”

This Week’s Credit Repair Blog

Age Ain’t Nothin’ But a Credit Card Number

How to Spot a Credit Repair Scam

This Week’s Credit Repair Q&A

What Are the Best Credit Cards for Helping Rebuild My Credit?

Do Bank Overdrafts Affect My Credit Score?

Which accounts should I pay off first?

This Week in Credit News

Credit Union Pledges Fee-Free Checking for Life

“Bethpage Federal Credit Union says that effective immediately, new customers opening a Bethpage Bonus checking account can be assured of a lifetime of no debit card fees, no monthly maintenance fees, no transaction fees, no minimum balance fees and no fees charged by Bethpage for use of other banks’ A.T.M.’s. Plus, there are no fees for online, mobile or telephone banking.”

Education tax credit mistakenly claimed by millions, report says

“Millions of American taxpayers may have erroneously claimed an education tax credit last year that is designed to provide relief as part of the Obama administration’s economic stimulus program, according to a new federal watchdog report disputed by the Internal Revenue Service.”

Credit card late payments edge higher in September

“In what may be an early sign that credit card users are again having trouble paying their bills, five of the nation’s top six credit card issuers said Monday that late payments rose in September.”

This Week’s Credit Repair Blog

Getting a Credit Card at 18

Are Joint Credit Cards a Good Idea?

This Week’s Credit Repair Q&A

Why Do My Credit Scores Change With Little Activity?

How is a Person’s Credit Risk Determined?

Will Paying My Bills Early Improve My Credit Score