You are here: Home / Archives for September 2010

Circumstances that Entitle You to a Free Credit Report

September 28, 2010 By

Thanks to federal law, everyone in the U.S is entitled to a free copy of their credit reports once per year from every credit-reporting agency. These freebies can be claimed at www.annualcreditreport.com.

According to the Consumer Data Industry Association, over 150,000,000 free credit reports have been claimed from this site since its inception in 2003. But did you know there are many more opportunities for you to claim free copies of your credit reports, which pre-date the annual freebie requirement?

The following is a list of other reasons why you’d be entitled to additional free credit reports. These credit reports must be claimed at each credit bureau directly, not via the annualcreditreport.com site. Because of state law – the free annual credit report requirement is a federal requirement, as stated above. But if you live in Georgia, Colorado, Maine, Maryland, Massachusetts, New Jersey or Vermont, state law allows for one additional free credit report (2 if you live in Georgia).

Because You’re on Welfare – You are entitled to a free credit report once per any 12-month period if you are on welfare assistance.

Because You’ve Been a Victim of Fraud – If you believe your credit report contains erroneous information because you’ve been the victim of fraud, then you are entitled to a free credit report during any 12-month period.

Because You’ve Received a Notice of Adverse Action – If you’ve been denied (or adversely approved) because of your credit then you are always entitled to a free copy of your report. And by July 2011, you’ll also get to see your credit score as part of the adverse action disclosure.

Because You’re Seeking Employment – You are always entitled to a free credit report if you’re unemployed and are actively, or will soon be, seeking employment.

Because You’ve Placed a Fraud Alert on Your Credit File – If you’ve been the victim of fraud you can place an alert on your credit file. When you place this alert you can also request a free copy of your credit file.

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.

Filed Under: Credit Card Blog Tagged With: , ,

The Latest Verdict on the American Dream

September 27, 2010 By

Home-buying-dream-blog It's no surprise that consumers are skeptical about whether buying home is a safe investment in the midst of the mortgage crisis, and a recent survey by Fannie Mae released this month confirms that. But while the American Dream has faded, it's not yet dead.

An overwhelming majority – 83 percent – believed in 2003 that homeownership was safe. That dropped to 70 percent in January 2010. In June of this year it dropped again to 67 percent, the lowest level of confidence ever recorded according the report.

The popularity of homeownership is even lower among potential first-time buyers. Among renters surveyed, 54 percent believe that buying a home is safe.

Growing uncertainty about the risks of homeownership may be slowing purchases. Even though 70 percent of respondents believe that low prices and interest rates make this a good time to buy a home, 33 percent said they’re more likely to rent than to buy a house, up from 30 percent in January. With only 70 percent of respondents believing that the economy is on the right track, one-fifth of all renters surveyed said they recently delayed plans to buy a home.

Among renters who say they would rather buy, 63 percent said they plan to buy a home in the future. That represents a four-percent drop since January.

Such reluctance means that more families “are paying down debt and putting their financial house in order,” Douglas Duncan, Fannie Mae’s chief economist, told the Wall Street Journal. Just over a quarter of current homeowners said they have significantly reduced their mortgage debt over the past year.

The report was not entirely a downer. Consumer confidence may be resurging – 70 percent of respondents said that now is a good time to buy, up from 64 percent in the beginning of the year. And 84 percent agreed that buying makes more financial sense than renting.

But many people doubt their ability to take advantage of the market. Just over half of homeowners said it would be more difficult for them to obtain a mortgage today. Seven in ten believe it will be even harder for future generations to get loans.

Attitudes may be changing slightly toward people who walk away from their homes. Only ten percent of survey takers believe that it’s acceptable to stop making payments on an underwater mortgage. That’s up from eight percent in January.

Photo credit: http://www.flickr.com/photos/billjacobus1/125058134/

 

Chris Maag is a freelance journalist for publications including The New York Times, TIME magazine and Popular Mechanics. He graduated with honors from the Columbia University Graduate School of Journalism, and has worked as a staff writer for daily newspapers, monthly magazines, alt weeklies and websites. Maag writes about people with big dreams set on little stages, including a teenage girl who races jet-powered tractors, and people who make millions of dollars impersonating Barack Obama.
Filed Under: Credit Card Blog Tagged With: ,

Your Electric Bill: Read it and Reap (the Savings)

September 24, 2010 By

IStock_000005794276XSmall If you were listening to Stephanie Penn Spear give a presentation about saving power right now, she would ask you this question: “How many kilowatt hours of electricity do you use in your home each month?” Typically, Stephanie says, she sees only one or two hands. (That’s okay. Mine wasn’t one of them, either.)

What Stephanie instructs during her talks at schools and organizations throughout Ohio is, basically, don’t just pay your electric bill, read it.

“What you’re going to find is that your electricity bill is extremely easy to read and very informative,” says Stephanie.

Last year, she launched an alternative energy consulting firm, Expedite Renewable Energy, which assists companies who want to explore solar or wind turbine energy sources. Her newsletter, EcoWatch Journal, has a readership of more than 100,000 including online.

Three years ago, Stephanie decided to see how much power she was using.

A quick scan of her electric bill revealed her average monthly usage of 750 kW per hour per month. (She dug the dandy little bar chart that provided a graphic depiction of the year’s usage, too.) Researching the monthly numbers for a 2,000-square-foot home such as hers, she found the average was between 850 and 1200 kW hours. Stephanie, being Stephanie, wanted to do even better.

A quick assessment led to several changes: She plugged her television and office equipment into power strips that turn on or off as necessary, instead of leaving everything in standby mode, which still draws power from the grid. When at her computer, she only turned on her printer or speakers when she was actually using them. Same with lights. She bought an Energy Saver washer and dryer set. She converted her incandescent bulbs into contact fluorescent bulbs.

Stephanie looked forward to getting her bill to see the reductions. She ended up cutting her total usage by more than half to 320 kW hours, which resulted in a $40 monthly savings.

She also figured out an ingenious way to get kids to buy in. She tells students to assure their parents that they can save them a lot of money every month on one condition: they have to commit the first money saved to buying an iPod or video game or tickets to see a Paramore concert (or whatev) within reason. After enough money is saved to pay the child’s “consulting fee,” the parents fully enjoy the savings for themselves.

Now the valiant among you will volunteer to teach this lesson. In return, you will receive a fourfold reward: Save power. Shorten your carbon footprint. Save money. Surprise (and edify) your kids.

Christopher Johnston has written for American Theatre, Cleveland, Continental, Crain’s Cleveland Business, Editor & Publisher, The Plain Dealer, Progressive Architecture and Urban Design, and Scientific American, among other publications. He is currently writing a biography of Frederick C. Crawford, founding chairman of TRW Inc. As an avocation, he is a playwright and director, and this December, his play APORKALYPSE! will premier at convergence-continuum theatre in Cleveland.
Filed Under: Credit Card Blog Tagged With: , ,

Infographic: Where Your Mortgage Goes After You Sign Your Name

September 23, 2010 By

Mortgage-money-machine

 

Most homeowners have their story – often a harrowing one – on the grueling process of getting a mortgage.  For them, the story's over once they sign the papers and get the money.  But that's just the beginning of a sometimes long and winding journey for the mortgage.

Today, Credit.com (with thanks to Loans by CreditLoan.com) takes a look at the many hands a mortgage passes through once the ink on the borrower's signature dries.

Also, we take a look at the federal government's failing Home Affordable Modification Program (HAMP), which was meant to “support a recovery in the housing market,” and “help up to 3 to 4 million at-risk homeowners avoid foreclosure,” according to the U.S. Treasury Department [pdf], by allowing borrowers to re-negotiate the balance on their mortgage, and lower their monthly payments.  The Wall Street Journal reports that "Overall, around half of the 1.3 million borrowers put in trial modifications since June 2009 have had their modifications canceled."

Filed Under: Credit Card Blog Tagged With: , , ,

New Debt Relief Rules Take Effect Sept 27, 2010

September 22, 2010 By

Starting Monday, you may not hear as many of those annoying ads promising you can “settle debts for pennies on the dollar,” or pitching a “government bailout program” for consumers with credit card debt.

That’s when the FTC’s new “Debt Relief Rule” goes into effect. Here are the key protections it offers:

Upfront Disclosures

Proposed Fees must be disclosed along with refund policies. Guestimates or ranges (“as little as”) don’t count. Instead, the proposed fees must be must be based on results the firm expects to get based on experiences with that consumer’s individual creditors.

Estimated Time Frame: Debtors must be given a good faith estimate describing how long it is likely to take to settle their debts based on their debts, and their ability to save money to settle.

Savings Required: Firms must estimate how much money prospective clients will have to save up in order to settle. Again, this has to be based on what kinds of settlements creditors are actually accepting. 

The Downside: Consumers must be given warnings that include the likely damage to their credit reports, the potential risk of lawsuits, and possible tax consequences.

Truthful Advertising

This is the part that should stop those misleading ads. Claims about how much money consumers can save must be based on the firm’s actual experience with all clients, not just the “best” examples. That means they have to include clients who dropped out when calculating success rates. And firms must subtract out fees from promised savings.
 
Dedicated Savings Accounts

With settlement, consumers typically stop paying their debts, then put that money into a savings account. If the debt relief company directs clients to save money in a “dedicated account,” those accounts must be maintained at an insured financial institution (for example, an FDIC-insured bank); clients must have total control over the money and the ability to withdraw it at any time, and the debt relief company can’t receive or pay referral fees from or to the company that administers the account.

Upfront fees will be banned October 27, 2010.

You'll find more details in our Consumer Guide to FTC Rules, and you can use our revised guide, Fourteen Questions to Ask a Debt Settlement Company to help you choose a debt negotiation company.

I am no so naïve as to think that this will weed out all the bad actors. After all, fourteen years ago this month the President signed the Credit Repair Organizations Act to stop fraudulent credit repair schemes, yet state and federal regulators are still cracking down on credit repair scams.

But this isn’t a bad starting point at all. 


Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights.

Filed Under: Credit Card Blog Tagged With: , ,
« Older Posts

Powered by Yahoo! Answers