Dec 182015
 
angrymancomputer

Washington State – News

Where Credit is Due

A major credit reporting agency told a Sprague man he owes half a million dollars in debt. The only problem? He says none of it is his

by Jake Thomas | December 10, 2015

Carl Parks just wanted to have some relatively minor adjustments made to his credit report. What he got has left him in a state of panic. –

Carl Parks just wanted to have some relatively minor adjustments made to his credit report. What he got has left him in a state of panic.

Carl Parks will admit he doesn’t have the best credit –– but he doesn’t have the worst. All he wanted was a few blemishes removed from his credit report. Instead he got a half million dollars in debt owed by people he’s never met.

Earlier this year, Parks, a 53-year-old truck driver, hired a law firm specializing in credit repair to remove a few dings that a divorce had left on his credit report, a document that lenders use when determining if someone is safe enough to make a loan to for a house, car or other large purchases.

In March, Parks says that Equifax, a Georgia-based company that is one of the country’s three biggest credit reporting agencies, responded to his attempt to revise his credit report with 40 envelopes that trickled in over the course of a few days to his P.O. box. At first, Parks ignored the mail, which was a foot tall when stacked up in his Sprague home.

On a Saturday night, he began opening the envelopes. Each contained a cover sheet addressed to him, stating that Equifax had determined he owed money on mortgages, car and student loans, court judgments and bankruptcies, all owned by complete strangers.

Each letter was accompanied with a credit report complete with Social Security numbers, home addresses, credit card numbers, maiden names, dates of birth and other sensitive information belonging to people across the country. According to the letters, he owed a grand total of $510,000.

“I was freaking out,” recalls Parks, who’s been worried since then that he could be taken to court for any of these debts. “I’m still freaking out.”

Alarmed by the letters, Parks contacted the firm he initially hired to repair his credit. Their response: “We’ve never ever seen anything like this. We can’t do anything.” Parks says he contacted Equifax and received a confusing letter asking him to send back the credit reports, but the letter didn’t say if he actually owed the money.

Parks found a lawyer specializing in debt collection who has now filed a lawsuit in federal court against Equifax, which didn’t respond to multiple requests for comment.

“But to this day I haven’t heard anything from them,” says Parks of Equifax, which he says has ignored his request for a credit report to see if he, in fact, still owes the money.

Parks isn’t alone. A similar incident occurred in Maine, and consumer attorneys say there could be others.

Parks’ new lawyer is Robert Mitchell, a Spokane attorney who specializes in defending consumers facing debt collection cases. Mitchell says he’s never seen anything like this case, and it’s particularly troublesome because so much sensitive consumer information was sent out by Equifax.

“I think this should scare the crap out of consumers,” says Mitchell. “This wasn’t an outside hacker group [that sent these reports out].”

Mitchell says that the Social Security numbers and other personal information belonging to people scattered across the country — information that was mailed to Parks — would have been a gift to someone with an inclination to commit identity theft.

After taking the case, Mitchell says he began contacting the individuals whose credit reports were sent to Parks. “One couple was so freaked out that they showed up at my Spokane office [from Alaska],” he says.

“Equifax is being tight-lipped,” says Mitchell. “And I think I’ll get more when I do the deposition in Georgia.”

The only information that Mitchell says he’s gotten out of Equifax is that a computer error was responsible for the credit reports having been sent. However, Mitchell says Equifax still hasn’t provided Parks with his credit report, and as things stand he’s on the hook for a half-million dollars. In October, Mitchell filed a lawsuit on behalf of Parks against Equifax in federal court for violations of the federal Fair Credit Reporting Act.

SaraEllen Hutchison, a Seattle-based consumer protection attorney who also represents Parks, says that while this incident is unusual, there is at least one similar to it, and more could be revealed as the case progresses in court.

This past spring, a woman in Biddeford, Maine, received 300 pieces of mail from Equifax containing credit reports from strangers after she requested her credit report from the company. After the incident received media exposure, Maine’s Bureau of Consumer Credit Protection opened an investigation.

William Lund, the bureau’s superintendent, says that Equifax wasn’t penalized after the investigation’s conclusion. The consumer who erroneously received the credit reports realized a mistake had been made and didn’t even open most of the envelopes, he says. Because it was such a rare situation that was quickly identified and corrected, he says it didn’t warrant a penalty. Lund also says that consumers expect credit reports to be sent out speedily, and that can come with a price.

“So speed often means automation, and automation means a small error becomes a big error,” he says.

In Washington state, no investigation has been opened into the incident involving Parks or any others like it, according to Peter Lavallee, communications director for the Washington state attorney general.

Parks says that ever since he was sent the stack of credit reports and the corresponding $510,000 in debt, he’s been mired in a state of panic, worried that a creditor or collector will take him to court on a debt owed by someone he’s never even met. He says it’s caused his diabetes to flare up and his back problems to worsen; he’s been unable to work since July.

“It’s working on me and working on me and eating me up,” says Parks.

http://m.inlander.com/spokane/where-credit-is-due/Content…

Nov 042013
 

Doug HeadshotDouglas Signature       BBB Logo Newsletter                 NACSO Logo Newsletter

Where to Find Scam-Free Credit Repair

Brokers should know how to discern which outfits actually will help their clients

TODAY’S HOUSING MARKET scares many consumers and mortgage brokers. Homeowners face dramatically increased monthly payments because of adjustable rate mortgages, and market saturation makes it almost impossible to sell a home. Mortgage professionals must also cope with a tight loan market while having to deal with clients with less-than-perfect credit scores.

One way for brokers to get through the hard times and to help consumers is to make sure that their clients’ credit scores are accurate.

Often, credit scores are affected negatively by inaccurate information. In fact, a 2004 study of the three major credit bureaus found that 79 percent of credit reports contain incorrect information. The same study reported that 25 percent of people had a credit report that was so inaccurate that it kept them from receiving financing.

Inaccuracies can have a major impact on the interest rate that mortgage borrowers receive. For this reason, some brokers have turned to credit-repair companies to help their clients.

In theory, the idea is perfect: Improve a client’s score before the borrowing process begins. Saving clients’ money can lead to more completed deals and to enhanced customer loyalty.

In reality, however, many brokers don’t know what to look for in a credit-repair company. Often, they find themselves searching for information and fighting against a lack of communication from unethical repair companies.

Some credit-repair companies charge exorbitant fees and deliver few results. 2ese events jeopardize loan closings and a broker’s reputation.

Here’s a look at what to avoid and what to embrace.

What to avoid

To avoid problems, consider the following tips when searching for an ethical credit-repair company to help your clients:

 1. Don’t pay by month: Many credit-repair companies charge monthly rates without a specified timeline. Because they get paid monthly, there is no incentive for these companies to expedite the repair process. Clients often never see the dispute letters, and the repair companies only send out a few each month. In reality, the dispute process usually requires three rounds of letters per unwarranted trade line. With three credit bureaus, it could require nine letters for each discrepancy.

2. Don’t pay upfront: Some credit-repair companies try to collect large payments upfront. This is illegal under the Credit Repair Organizations Act. Brokers should beware of companies that require any investments before the work is completed.

3. Don’t allow “piggybacking”: This illegal practice involves overriding password-protected documents and issuing fake credit accounts to customers. Piggybacking occurs when an individual becomes an authorized user on the credit card account of another person with excellent credit. Within a few months, the unknowing consumers have their scores used to increase the piggy backer’s rating.

4. Don’t allow password hacking: Another illegal tactic is to buy software that breaks into password-protected documents. This allows hackers to change credit reports.

What to embrace

Credit-repair companies that use unethical methods are largely responsible for the common belief among consumers that credit repair is a scam. Consumers and mortgage brokers, however, shouldn’t dismiss the industry altogether. There are several companies that truly act as consumer advocates. These businesses practice under the rules of the Fair Credit Reporting Act (FCRA) and aim to provide clients with legitimate and legal assistance.

The FCRA statutes are designed to provide consumers with quick, simple and effective methods to ensure that their credit reports are accurate and to allow them to correct errors. The average consumer, however, is hard-pressed to navigate through the procedural morass of FCRA successfully; it can require many steps to remove an inaccurate item from a credit report. Several of these steps have multiple parts, and others require some expertise in the fields of credit analysis and reporting.

For these reasons, ethical credit-repair professionals are needed.

Trustworthy credit-repair companies use consumer-protection laws to force creditors and credit bureaus to verify debt and negative trade lines. Specifically, the bureaus must prove that everything is 100-percent accurate. If they don’t have the documentation or if something is reported incorrectly, then that information must be removed by law.

Good credit-repair companies offer clients a transparent process and work within a specified time limit, such as 60 to 90 days. They use legal procedures to identify negative and unwarranted information and to remove inaccuracies systematically. As negative trade lines disappear, credit scores improve.

Such companies provide more than just dispute letters. They educate clients on how to use credit to their advantage, offering such lessons as paying off small balances on high-limit credit cards and closing cards that aren’t used.

Ethical credit-repair organizations also may offer legal advice and debt negotiation. Mortgage brokers should look for companies with an onsite legal staff; this is a good indicator that they abide by laws and regulations. Attorneys also can be beneficial when it comes to debt negotiation and can help clients reduce monthly payments while working to remove existing debt.

By helping clients find ethical ways to improve their credit scores, mortgage brokers can gain ground in a difficult market.

Jun 072013
 

According to a recent study conducted by Consumer Federation of America (CFA) and Vantage Score Solutions, an astonishingly large number of Americans do not understand credit scores. CFA and Vantage estimate that between one-quarter and two-fifth of consumers lack in their understanding of credit; this equates to millions of Americans! If consumers do not understand the credit system or the impact it has on their lives, the result will be this: they, along with millions of others, will become economically disadvantaged.
CFA and Vantage Score Solutions have taken steps to educate consumers as a result of their findings. The consumer study involved 1,022 participants. Findings were based on incorrect answers to a number of credit awareness questions on the survey. For example:
– Two-fifths did not know mortgage lenders and credit card issuers are factors in determining credit availability and pricing.
– Two-fifths did not know that personal characteristics are not factored into their credit score (marriage status, age, etc.).
– Between one-quarter and one-third did not understand key ways to maintain or raise their credit score such as keeping card balances low (26%) and not applying for more than one card at a time (28%).
– More than one-quarter did not know that lenders are required to inform borrowers of the credit score they used to make their decision regarding the borrower’s loan.
– Many consumers do not understand that cosigning a loan, including student loans, can affect their credit negatively if the student makes even one late payment.
In an effort to educate consumers, CFA and Vantage Score created an interactive quiz. Consumers can take the quiz quickly and find out what they know — or don’t know — about how credit is built, as well as the factors that bring credit scores down. The companies hope that consumers will become empowered to be better credit managers as a result. The smartly-styled quiz can be found at www.CreditScoreQuiz.org and www.CreditScoreQuiz.org/Espanol.
Misconceptions about credit have a negative impact on one’s credit score. In order to make better decisions that build credit, consumers first need to understand credit. Barrett Burns, CEO of Vantage Score Solutions, says, “People who fail to understand exactly what can impact their scores have little incentive to manage the things that truly make a difference.”
What makes sense in the credit world is not necessarily common sense. For example, if someone experiences difficulty paying their credit card debt, they might think accepting a new credit card is wise, since they need money. However, if they are wise they will turn down every credit card they are offered at retail stores, for this will negatively impact their score by opening new accounts and maxing out the limit.
In another case, someone might make monthly payments on their credit card balances, but they never seem to bring the balance down to below 40% of the card limit. They don’t realize that carrying a high balance is harmful to their credit. The credit bureaus score the amount of balance on your credit card compared to the limit amount. The closer the balance on the credit card is to the limit, the more points you lose on your credit score. The general agreement is to hold your credit card balance below 40% of the limit.
Unfortunately, abandoning credit is the wrong action to take today. In order to make the credit system work for you, you must learn the rules and play by them. No one is free from the credit system. Whether you’re applying for a home loan, a renter’s lease, cell phones, utilities, or jobs, your credit score will impact your situation.
You need credit on your side when you make a large purchase, like a car, so that you will receive a better interest rate and thereby save money on the cost of your car. One of the questions on the CFA/Vantage Score quiz asks how much more money a person with a low credit score will pay on a car loan for $20,000. The answer is $5,000 or more. However, 80% of the participants who took the quiz underestimated the impact a low credit score will have on a car loan.
Interestingly, the survey found that more women than men correctly understand credit. The good news for men and women is that your credit score can improve. You have to learn what to focus your energy on. Education is the key to raising your credit and prospering in the future. We’re here to guide you and provide resources so that you are empowered to manage your credit.
The best things you can do for positive credit results are:
-Pay bills on time, every time
-Keep credit balances 25% below card limits
-Avoid opening multiple new credit accounts rapidly
-Check credit report for errors
To learn about these rules of credit go to www.creditjusticeservices.com for FREE information.

Douglas Muir, CEO
Credit Justice Services

Oct 022012
 

In the credit repair industry we are used to hearing about the plethora of inaccurate information contained in consumer credit reports. Now, it seems that credit card companies are also mistreating customers by producing flawed or inaccurate documentation and using it to sue consumers for balances that may be false.

These dubious debt-collection practices are strikingly similar to the recent misconduct in the mortgage foreclosure system, a practice known as “robo-signing” in which banks produced comparable documents for different homeowners and did not review them.

Noach Dear, a Brooklyn, NY, civil court judge, estimates that “roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.” He should know, as he sees up to 100 cases come before his bench every single day. He says that employee witnesses for the credit card companies are known to provide “robo-testimony” – a generic testimony defending the company’s record-keeping practices. In one case, the same witness gave similar evidence in other cases. Not surprisingly, the credit card companies defend their practices.

In some instances, lenders are trying to collect money from consumers who have already paid their bills. Often they are attempting to increase the size of the debt by adding on bogus fees and improper interest rates. The specifics of the lawsuits run the gamut. Some consumers dispute that they owe money at all. More commonly, borrowers agree that they are behind on their payments but contest the size of their debts.

The problem, according to judges, is that credit card companies do not always follow the proper legal procedures, even when they have the right to collect the money. Worse, they usually get away with their unfair practices, as clients rarely show up in court to defend themselves. As a result, an estimated 95 percent of lawsuits result in default judgments in favor of lenders, even though the lenders often do not provide proof of the outstanding debt – such as the original contract. If the consumer were to appear in court, such a misstep on the part of the credit card company could get their case thrown out. However, once the credit card company has a judgment, they can legally garnish a consumer’s wages and even freeze their bank accounts to collect the debt.

The FTC is now working with courts across the country to improve the process by which banks and credit card companies pursue consumers who are behind on their credit card payments, mortgages, and other bills. Let’s hope change comes fast

Educating the Consumer,

Douglas Muir, CEO

Mar 152012
 

Believe it or not, the federal government really does have your back sometimes. The Consumer Financial Protection Bureau has recently announced its intention to regulate the credit bureaus. The current recession has seen larger and larger numbers of consumers being pursued by debt collectors while their credit scores tank. The CFPB is stepping in to provide oversight, a move that could help many CJS clients as they take steps to improve their credit scores and clean up their debt.

The Big Three – Experian, Trans Union, and Equifax – are, of course, the largest and most notorious culprits of unfair credit practices, and they will all be under federal supervision. Through oversight, the CFPB aims to restore confidence in the American government to consumers, and to employ the same watchdog practices as they do with banks.

At the same time that so many Americans are suffering financial hardship and material loss – which are reflected on their credit reports – the credit score has become a more and more important indicator of a person’s worthiness. Hence comes the modern term ‘creditworthy’. Would-be employers, lenders, and others have quick access to a person’s credit score and use it as a measuring stick.

Just as alarming are the “Fourth Bureau” firms, who prey on people who are too poor, uneducated, credit-challenged, or young to obtain regular credit cards and bank accounts. While companies like CJS, and some government and nonprofit organizations, have gone a long way to explain the truth about the Big Three credit bureaus, and to educate consumers about how their credit scores are determined, these Fourth Bureau companies target the 30 million Americans who, for whatever reason, are outside of the mainstream financial world. They are shut out from the regular banking system and do their transactions instead with check-cashers, prepaid cards, and by other dubious means.

The Fourth Bureau companies are devising their own systems of credit scoring based on unreliable information obtained from things like cell phone bills and magazine subscriptions. Unfortunately, these companies are not usually subject to the government regulation that the Big Three are, leaving the consumers on whom they report in a very vulnerable position.

Now the CFPB needs to determine which “nonbanks” it will oversee. Debt collection agencies and the credit bureaus will be targeted – not only the Big Three, but at least 30 of the smaller firms are also on the proposed list.

Douglas A. Muir, CEO

Source: Mui, Ylan. “Consumer agency wants oversight of debt collectors, credit bureaus.” Washington Post, 16 February, 2012.

Dec 122011
 

In today’s economy, it’s all about your credit scores — and that’s scary. A good credit score is between 730 and 850. In today’s market your credit score is being used for all types of things, like whether or not you will be approved for a car loan, mortgage, car insurance, or even a job. It’s more important now than ever to do all you can to raise your credit score.

Here are some things you can do to improve your credit score immediately.

** Use your old credit cards. The credit-scoring model at all three bureaus rewards people for having a longer credit history (amount of time you’ve had credit). This is why it’s a good idea to hold on to old credit cards instead of cancelling them. But your credit score also places more weight on recent activity than on a dormant credit card. So if you have an old credit card with a zero balance, fill up your car or SUV with gas to reactivate the Date of Last Activity (DLA) on the card. PLEASE DO NOT charge your card above 30% of the credit limit!!!

**Start to spread out your credit card debt. It is not good to have one credit card MAXED out and two others with small balances. Start transferring your debt amongst all your cards in order to keep the balances below 30% of the card’s limit. This will give your scores the most bang for your buck. Maxed-out cards are indications that you could be having financial troubles and will be a red flag to lenders, not to mention that it also crushes your credit score.

**Make payments before creditors update your file. To make your credit utilization ratio (credit limit divided by credit balance) look even better, have your credit report pulled and note what day of the month your creditors are sending updates to the credit bureaus (most creditors update your file on the 28th of the month). Then, make your payments so they are recorded a few days before that reporting date. This will insure that your creditors will be reporting the lowest balance on your accounts, which will increase your credit scores.

**Look out for inaccurate negative information on your credit reports. Consistently look for information that is inaccurate, too old (more than seven years), misleading, incomplete, or unverifiable, and work to remove this damaging information on your credit reports.

For a FREE evaluation of your credit report call or email us at the contact information above.

Douglas Muir, CEO

Nov 212011
 

As the former owner of one of the largest collection agencies in the U.S., I have done it all. I am pleased to say that I now work for the consumer, like you, in protecting your rights against those pesky collection agencies.
There are a few things you need to look out for when contacted by a collection agency.

1. Make sure you get their information. Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money. But remember — these numbers are inflated!

2. Send the collection agency a”Validation of Debt” letter. Once you do this, all phone calls must stop until the debt is validated. This means a signature, contract, or some type of agreement must be presented to you. Anything less than that is NOT considered validated.

3. Go online and research the company’s ability to operate in your state. You can find this information at http://www.collectionagency411.com/collectionagencylicense.htm. If the collection agency is not licensed in your state, report them to the Attorney General and notify the collection agency that you are doing so. This will stop the letters and harassing phone calls.

4. DO NOT make any payments or agree to make any payment until the debt is validated. You will lose most of your rights under the Fair Debt Collections Practice Act (FDCPA) if you do.

I can’t tell you how many thousands of people paid me for debt that I had no contract or signature for. And if they didn’t pay, I would place a judgment against them because you the consumer would NEVER show up to court to dispute the validity of the debt.
I am pleased to say my company was never sued because we operated within the state and federal guidelines, but I’m here to tell you there are many unscrupulous collection agencies out there that are operating illegally. All it takes is to know the steps above to beat them at their own game.

Please feel free to buy the book on my web site, www.creditjusticeservices.com, called Consumer Protection Enforcement (C.O.P.E.). This book was written by my partner and consumer attorney, assisted by me, to help the consumer fight against the collection agencies and credit-card companies without having to use an attorney. You have the right to sue a collector in small claims court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. Our book has a 98% win ratio in court and was written to protect consumers like you against fraudulent collection agencies.

Douglas Muir, CEO
Credit Justice Services, LLC
www.creditjusticeservices.com

Nov 142011
 

As a CCC with Credit Justice Services, I relish the results people report to me after they have used our 90 Day Credit Makeover Plus to repair their credit. There’s nothing like the phone call that makes your heart sing a positive report from a satisfied client who has increased their credit score and is moving forward with their plans for their financial life.

This past week I spoke to a man who was in tears. He told me about a life situation that lead him to living off credit cards for a period of time and the crushing credit card debt he lives with every day. He had received a letter in the mail from his major credit card company informing him that they had raised his interest rate 3 times, because they had been monitoring his credit score and it had slipped below what they deemed reasonable. He was panicked, devastated and embarrassed. He called the credit card company who agreed to lower the rate to the original rate, but informed him that if he charged just ONE more item anytime in the future, they would put the rate back up to the 3 times level = 18%. He began to panic again, knowing him gym membership payment of $20 was due to be charged to that account any day. He frantically tried to contact the billing department of his gym to avoid the billing.

Unfair credit card practices are creating chaos in people’s lives. A bill to stop these practices has stalled on the floor of the House. Until something changes, and laws are put in place to protect American consumers, below is a list of credit card company tacks to be aware of:

(From American’s for Fairness in Lending, Credit Card Action Center, posted July 11, 2008) Credit card contracts are packed with fine print tricks and traps to increase the likelihood of paying fees and penalties. You will be hard pressed to find a credit card without these terms  at least until our government outlaws them but if you’re informed and cautious, you have a better chance of steering clear of the traps and saving money.

Fees and More Fees – On any given month, you might pay a late payment fee, overlimit fee, cash advance fee, balance transfer fee, foreign exchange fee, bill payment fee, Western Union fee, and whatever else your lender can devise. Not to mention monthly and annual fees.

Tricks to Make You Pay Late – These come in many varieties. If you’re late you’ll pay a hefty fee and your interest rate may go up. Check each statement carefully and pay your bill as soon as it arrives.

Changing Due Dates – Your bill will not be due on the same day every month.

Early Due Dates – Bills may be due just a few days after you receive them.

Weekend Due Dates – If your due date is on the weekend and your payment arrives on the date, it won’t be processed until Monday and you’ll be considered late.

Morning Due Times – Your payment may be due at 9am on the due date, not 5pm.

Approved Overlimit Charges – If a purchase puts you over your limit, your credit card company will approve the charge then hit you with an overlimit fee and maybe even raise your interest rate. Keep careful track of your balance and know that even approved charges may put you overlimit.

Universal Default – Pay Card A on time but pay late to Card B (or anything else monitored by your credit score) and your interest rate on Card A may jump!

“Any Time For Any Reason” Changes – Most contracts include this ominous phrase. It means just what it says – they can increase your interest rate on a whim.

Teaser Rates That Don’t Stick -An introductory 0% interest rate can jump to 30% with a late payment or if you go overlimit. Don’t bank on keeping that 0% rate for the entire promotional period.

Retroactive Application of Higher Interest Rates – To make things worse, if your interest rate increases, they can apply the higher interest rate to the entire existing balance, not just to new charges.

Allocation of Payments – If you end up with two or more different interest rates, they will apply your payments to the balance with the lower interest rate first. The rest of your balance will continue to generate high interest charges until the low-rate balance is entirely paid off.

Tricky Interest Calculations – For some cards, you can pay interest on purchases from previous cycles. This is known as double cycle billing. Look for a card that uses the “Average Daily Balance” interest calculation method.

Credit “Protection”“ Services like this may sound good, but they’re usually useless. The fee for the service likely exceeds the minimum payments it would cover if you became sick or lost your job. Avoid add-on products like this.

Binding Mandatory Arbitration (BMA) – This provision requires that you resolve any conflict with an arbitrator selected by the lender, which means you give up your right to take the credit card company to court.

Oct 112011
 

As the former owner of one of the largest collection agencies in Florida, I have done it all. I am pleased to say that I now work for the consumer, like you, in protecting your rights against those pesky collection agencies.

There are a few things you need to look out for when contacted by a collection agency.

1. Make sure you get their information. Every collector must send you a written “validation notice: telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money. But remember – these numbers are inflated!

2. Send the collection agency a “Validation of Debt”  letter. Once you do this, all phone calls must stop until the debt is validated. This means a signature, contract, or some type of agreement must be presented to you. Anything less than that is NOT considered validated.

3. Go online and research the company’s ability to operate in your state. You can find this information at http://www.collectionagency411.com/collectionagencylicense.htm. If the collection agency is not licensed in your state, report them to the Attorney General and notify the collection agency that you are doing so. This will stop the letters and harassing phone calls.

4. DO NOT make any payments or agree to make any payment until the debt is validated. You will lose most of your rights under the Fair Debt Collections Practice Act (FDCPA) if you do.
I can’t tell you how many thousands of people paid me for debt that I had no contract or signature for. And if they didn’t pay, I would place a judgment against them because you the consumer would NEVER show up to court to dispute the validity of the debt.
I am pleased to say my company was never sued because we operated within the state and federal guidelines, but I’m here to tell you there are many unscrupulous collection agencies out there that are operating illegally. All it takes is to know the steps above to beat them at their own game.

Please feel free to buy the book on my web site, www.creditjusticeservices.com, called Consumer Protection Enforcement (C.O.P.E.). This book was written by my partner and consumer attorney, assisted by me, to help the consumer fight against the collection agencies and credit-card companies without having to use an attorney. You have the right to sue a collector in small claims court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. Our book has a 98% win ratio in court and was written to protect consumers like you against fraudulent collection

Douglas Muir, CEO
Credit Justice Services, LLC
904-757-0880
www.creditjusticeservices.com

Oct 062010
 

Personal credit and Business credit are 2 different animals. I would like you to review the information below. This will be very useful to you and your clients.

Business Credit Cards – A Credit Score’s Best Friend

You have probably already established personal credit…so now it is time for you to strengthen your financial fortress and safeguard your credit score by building business credit.

Business credit comes with good news and bad news. The good news is more times than not it does not get reported on your personal credit report…and the bad news is also that it does not get reported on your personal credit report. That is why it is so important that you have established personal credit before heeding this advice.

Unless you’re Microsoft, chances are good that you have to sign personally in order to qualify for a business credit card. But other than the inquiry that shows up on your credit report when you apply for the business credit card, 90% of all business credit cards do not get reported on your personal credit report unless you default on the payment. If you do, then the account will get reported to your personal credit report and your credit score will be affected negatively.

Now why is this good for your credit score?

Well, the credit score only analyzes what it sees on your personal credit report. And given the fact that 30% of the credit score is derived from the ratio between your credit balance and limits on your report, not having a “maxed-out” business credit card showing on your credit report can be a very helpful thing for your score.

For example, let’s assume you have $50,000 in revolving credit available to spend. Let’s also assume that your credit score is a 730. If you were to go and max out these credit cards the next day, once the balance reflects on your credit report, your 730 credit score may drop to a 650. Now let’s look at the same situation where you have a 730 credit score but the $50,000 you spend is on business credit cards that do not report to your credit report. Your 730 credit score will remain a 730 credit score and you will be able to get favorable financing even though you are carrying the same debt load as the previous example where the score dropped to 650. The credit score only scores what it can see; business credit that is not being reported on the personal credit report does not affect the score whatsoever.

But it is important to pay on time – if you do get business credit that shows on your personal credit report even if you are not late, that credit is treated exactly as if it was personal credit and having the business credit will not yield any benefit to your credit score whatsoever.

I suggest building your personal credit first before you attempt to build your business credit card portfolio because you do have to have good credit being reported to qualify for these business accounts. More good news – the credit card companies do not require that you have a business license or a corporation, and the simple classification of being “self-employed” is typically enough to pass muster.

My two favorite banks for business credit cards are American Express and MBNA. A good start would be to apply for a regular American Express charge card that needs to be paid in full each month and also an American Express revolving business card like “Blue for Business” that you can pay minimum monthly payments on. MBNA has a business credit card called Platinum Plus for business, which affords a low rate and a high credit limit. American Express will not report to your personal credit report regarding your business credit card unless you are approximately 120 days late. MBNA on the other hand will report the account to your personal credit report once you become 30 days late.

The flexibility and control that business credit cards give you with your personal credit score are worth their weight in gold, and in many cases will allow you to save countless thousands in interest on your next mortgage by affording you the highest credit score possible.

Douglas Muir, CEO

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