CreditBuilder Lawsuit: Refunds Coming!

Dun & Bradstreet has been sued by the Federal Trade Commission (FTC) for their CreditBuilder program. If you purchased this program, you may be due a refund, per the settlement agreement.

If you buy or sell credit repair software, beware! This lawsuit by the FTC will have far-reaching effects. The best thing you can do is to learn from the (expensive) mistakes of others.

Those who purchased CreditBuilder were led to believe the annual subscription was $499. What was unclear is that they could end up being charged $1,599 per year for an additional product, without adequate notice of the change.

In addition, the FTC said they were in violation of the FTC Act for failure to provide a reasonable means for customers to dispute misinformation on their Dun & Bradstreet credit reports.

The proposed settlement requires D&B to refund all the businesses that purchased CreditBuilder between April 2015 and May 2020, as well as give many current customers the opportunity to cancel their subscriptions and get refunds.

If this pertains to you, keep an eye out for the proposed order to be published in the Federal Register.

If you are purchasing any type of credit improvement software, read all the fine print and ask questions. If you are developing and/or selling credit improvement software, take care to be 100 percent transparent with your customers. The FTC does not take kindly to customers being taken advantage of.

Source to read more here

Interest Rates Going Up in 2022

The Federal Reserve Board has announced that they intend to increase short term interest rates four times in 2022 Why is this important to know?

Short term rates affect how much your credit card companies charge in interest. If you are carrying balances on your credit cards, then this warning and a notice to take action now.

The last thing you want is for your money to be going to interest, especially when that is 12%, 18%, even 23.99%. You are not getting a good deal on anything when you pay that kind of interest rate.

Now is the time to pay off credit card balances.f

Here is The Plan:

  1. Pay off credit cards asap. Pay extra above the minimum payment required. Get that balance down to $0 before the interest rate goes higher — making it even more difficult to pay off.
  2. When the card is paid off, KEEP IT OPEN. Don’t close the card.
  3. Use your credit card at least once every four to six months so that the creditor doesn’t close it for “non-activity.” You want it open for your credit score.
  4. Only charge the amount that you can afford to pay in full when the bill comes. If you are carrying a balance, examine to see if you have over-spent for your budget. Or it might mean you had an essential large purchase, such as your water heater went out; and that is okay. Just pay it off as rapidly as you’re able.

Do what you can to get aggressive about getting out of debt. Limit new spending to essentials only. Pick up extra hours at work, if possible. If you are seriously in debt, see if you can pick up a side hustle for extra money, so that you can eliminate your debt as quickly as possible.

Once you have done all you can, let yourself feel peace and satisfaction. Not all goals are obtained easily or quickly. If you are on the path to better finances, good for you! Stay the course and you will get there.

If your debt is twice your annual income and it will take you more than 10 years to dig out, and you do not anticipate a significant increase in pay, then consider speaking with a bankruptcy attorney to see whether or not filing Chapter 7 would be your best strategy. Every state has its own laws regarding bankruptcy, so only a local attorney can give you specific answers for your own situation.

The sacrifice you make now to get out of debt will be worth the effort. We are not being blindsided: higher rates are on the way. This will help inflation, which will, in turn, help us at the grocery store — and that is a good thing.

Higher Fees Coming April 1 for Second Homes!

If you are thinking of buying a second home, a vacation home, then you will save yourself a lot money if you make your purchase before April 1, 2022.

The increased fee for a second home will range from 1.125% to 3.875% of the purchase price — depending on how much you put down. Wowzers!

If your second home is $300,000 and you put the minimum down, you will pay an additional $11,625!
(3.875% of $300,000)

Best case with 25 percent down, is an increase of $3,375.

In lieu of paying the extra cash up front, you can choose to take a higher interest rate. Or split the difference with some additional upfront and a higher rate. Your mortgage broker can give you specific options as rates change daily.

This is a clear and loud message that the Federal Housing Finance Agency wants to slow down the purchasing of second homes while there are still so many people who have not yet purchased their first home. At least, that is my take on it.

Realtors, if you have clients on the fence about buying a second home, now is the time to light a fire for them to take action now.

You can read more detail about this change coming here.

Credit Repair Statistics

Yes, credit repair works. Whether you choose to hire a professional service or choose to repair your own credit, good results can happen.

Wrapping up the year, here are some stats from a national credit repair company, in business for 16 years:

  • Average starting credit score is 580.
  • The deletion rate in the first month averaged 7 deletions.
  • After 8 months, the average client had 21 deletions, averaging 4 deletions per month. (As time went on, there were fewer negative items to get deleted.)
  • After 8 months, the average score had risen to 641, but if you removed the clients who had accrued new negative activity, then the scores for those people were significantly higher.

Results from DIY credit repair following the strategies in the book, Repair Your Credit Like the Pros (shared here with each book reader’s permission):

  • From book reader Adam: “My Experian score has officially increased 100 points as of today. Started out at 510 and now I’m at 610. It’s been less than a month since I sent out my first letter. I wish I’d gotten your book a lot sooner.”
  • From book reader Ashley: “This <negative account> is no longer on my credit report after your advice. I’m now in the 800s because of this!”
  • From Kallsey: “My score has gone up 200 points in the last few years.”
  • From Adam: “I was at 511 last month when I started reading your book. I am at 602 as of today.”

I will share more specific success stories, including how book readers were able to negotiate awesome settlements on collections and charge-offs at another time.

As we approach a New Year, be encouraged. Credit repair does indeed work!

Available on Amazon in paperback and Kindle here.

#1 Obstacle to Credit Repair

What do the pros say is the number one obstacle to credit repair? What one thing prevents them from being able to execute a major improvement to their clients’ credit scores?

A large national (and successful) credit repair company shared their statistics with me today.

The result is sad, only because most of their clients are shooting THEMSELVES in the foot and preventing the pros from success in raising their scores to what they could be.

This #1 obstacle is new late payments.

My mouth dropped open when I read that. Most people — after signing up for and paying good money to have their credit repaired by a professional service — create new negative credit activity for themselves.

Their statistics show that people who do not create a new negative activity see a score improvement three times better than those who did.

You cannot clean up a mess behind you while you are creating a new mess today!

If you want to raise your score from subprime to acceptable (or to top tier) then you must pay all obligations on time every month. And if you need an exception due to a loss of income or illness due to the impact of Covid, then call and ask for an appropriation per the CARES ACT before you are reported as being late.

If you are unable to pay a bill, call and make an arrangement and then get that in writing that they will accept $X per month without reporting you as being late for X amount of time until you can regain your financial footing. Do not hide from your financial hardship or ignore a bill, because that will only make things worse. If you call and write and are denied, and if your circumstances are so dire that paying late cannot be avoided, then prioritize by protecting your home first, your transportation second, credit cards third, and medical bills last. Put student loans into forbearance.

Common sense says that you cannot dispute an old late payment if you are late today (or have been recently late.)

I will share more specific statistics from the pros, so if you want to see that, you will want to subscribe.

Let’s finish out the year credit-strong and may God bless you and meet all your needs.

See Repair Your Credit Like the Pros here.

CHRISTMAS *

From Isaiah 9:6 we read:

For to us a child is born, to us a son is given,
and the government will be on his shoulders.
And he will be called Wonderful Counselor, Might God.
Everlasting Father, Prince of Peace.

Photo by Anna Shvets, Moscow

Lord God, you gave us the Light of the Word, Jesus Christ,
Emmanuel, God is with us.
May your name be glorified now and forever. Amen.

Photo by Gerhard Lipold, Sweden

MERRY CHRISTMAS, EVERYONE! *

Watch Out for FICO Codes 10, 11

Some people will soon see a drop in their credit scores and have no idea why.

They will think there has been a mistake or that they are being targeted unfairly.

The reason will be “too much holiday shopping” and FICO Codes 10, 11.

If you use more than half of your available credit, then your score will be penalized. If your credit limit is $2,000, and you charge $1,900 and make payments on time, your score will be penalized, because you have used all but $100 of your credit line.

If you charge one dollar above 50% of your available credit, your score will be penalized. That means if your credit limit is $2,000, you should never charge above $999. And even better if you keep the balance below 30%.

The Cure to the FICO 10 and 11 Codes

If you already have balances that are too high, according to Codes 10 and 11, you can quickly reverse that by paying down your balances. Your score will not increase the same day you pay your credit card balance down, because creditors report to Experian, Equifax, and TransUnion only once a month. (You can call and ask which day of the month your credit is reported. It is not the same for all creditors.)

As soon as the credit bureaus receive notice that your balance-to-limit ratio has improved, your score will increase and Codes 10, 11 will no longer dock your points. In addition, it is best for your score if you pay your entire bill when it comes due rather than carry a balance from month to month.

Thank you again for reading. I do my best to provide valuable information for credit usage and improvement.

Handling a Bogus or Unfair Bill

I could not believe my dentist office sent me a bill for $50 for nothing!

The charge had no explanation, just the notation, “balance forward.” Forward from what? My last appointment was months ago and I had paid the bill in full at the time. There had been a cancelled and rescheduled cleaning appointment, hmmmm. Were they trying to charge me for that? Because if so, there was no way I was paying $50.

I called. “I received a bill with no explanation, and since I don’t owe any money, this must be a mistake,” I said.

She looked it up. Sure enough, the so-called bill was because I’d had to cancel an appointment without 48 hours notice.

“It was necessary for me to cancel,” I said calmly.

The next words from here were, “I have gone ahead and cancelled this in our system.”

“Thank you, I appreciate it very much,” I said.

Don’t pay unfair bills. Don’t ignore unfair bills or they will end up in collections and ruin your credit. Call and get them taken care of, then you can proceed with ripping them up.

Available on Amazon

Attention Realtors and Condo Buyers (New Rule)

If you are buying a condo, you don’t want to get surprised midway through the process by discovering two new requirements have been put into place by Fannie Mae and Freddie Mac (the government sponsored enterprises that provide money to banks and mortgage lenders. I believe FHA is following suit.

Your closing date could be delayed, or your entire sale could be denied — even if you already have pre-approval and desktop underwriting approval and a letter of commitment. All that will mean nothing if the condominium cannot meet these new rules.

Don’t blame your loan officer or your lender. The new conditions come down from the United States government.

Remember the Surfside Condominium collapse where 98 people died in June 2021? That is what precipitated these two new questions on the required Condo Questionnaire.

Chandan Khanna | AFP | Getty Images

Question #1: Has the condo had an Engineer’s Report in the last five years?

Question #2: Is there any pending litigation?

The best time to ask these questions is before you tour the property and fall in love with its beauty. Please pass this vital info on to other real estate agents, because the last thing buyers need is last minute fallout on their sale!

What Happened Last Week (So happy!)

Last week, I announced that I was donating 100% of my book royalty for a child in poverty to attend school. This is a child who otherwise would not get an education, because his/her parents are too poor to afford it.. There is no free education in Ethiopia. (See last week’s post for photos and more info.)

Thanks to all of YOU, this morning I donated enough money to cover an entire year of kindergarten where a child will learn to read, write, and do basic math, and will receive a nutritious meal. The annual cost is $420, and I donated $466, which was my entire gross royalty.

Also, thank you to the anonymous (to me) donor who generously gave $100 toward education directly on the New Life Ethiopia site and sponsored a child. God bless you for that!

Here are some photos of the school with a one-minute video of the children in action. What a joyful place!!

https://newlifeethiopia.org/kindergarten/?doing_wp_cron=1638814221.1935729980468750000000

Thank you to everyone who purchased one of the books in the Repair Your Credit Like the Pros series. You have changed the course of a child’s life.