Struggling With Student Loan Debt?

If you, or someone you know, has a mountain of student loan debt or is having difficulty with payments, I have some good news! (Next week, good news for people with a bankruptcy on record.)

I received permission to share this post from a respected credit repair business owner, a colleague and friend who has been helping people with their credit for 15 years. Prior to that, he was a mortgage banker. Mr. Erik Kaplan has over 20 years’ experience in the personal finance space.

I write about repairing your credit like the pros. This message is directly from a highly successful pro:

If you’re struggling to pay student loans, you’re not alone. With 45 million total student loan borrowers collectively owing $1.7 trillion of student loan debt, many simply can’t afford this debt. Maybe you lost your job. Maybe your monthly student loan payments are too high. 

We may have a solution.  We might be able to help!
Living with a student loan is challenging at the best of times. In these unprecedented times many student loan borrowers are struggling more than ever. The current moratorium on student loan payments has been a welcome relief for many. Unfortunately, it will not last forever.  There are several profound reasons a person might deeply resent having to pay their student loan or that of their child. Reasons that go above and beyond the simple fact of disliking debt. 

  • Some people feel they were misled by their school.
  • Some people struggle so much with their payments that they have to put everything else in their lives on pause just to make ends meet.
  • Some people’s higher education didn’t translate to high income and they’re unsure whether they’ll ever be able to pay down their debt.
  • Some well-intentioned parents are saddled with their child’s debt and feel completely hindered as a result.

 If you or someone you know can relate to any of these, there is good news.   THD Credit has formed an alliance with an attorney-based student loan contract cancellation and modification service that can help qualified individuals with such hardships.   If you have student loan debt of $30k or more and are interested in having a conversation to see if this is a fit for you, call us at (800) 822-7120 or contact us here  and we’ll make an introduction.



Five New, Current Mortgage Rules

Mortgage laws changed since Mortgage Rip-offs and Money Savers was published.

Should you wish to read the new TILA-RESPA laws, here is the link:

Otherwise, here are the 5 most pertinent changes since the time my book was released:

1) There is no more Good Faith Estimate. It has been replaced by the Fees Worksheet (or similar name). Each lender can title it what they want, but it is the same info as on the GFE but with a different title on top. We are no longer allowed to call it a GFE. (Thanks government, that makes no sense!)

2) The new estimate for after you have made a full application is called the Loan Estimate. It requires a credit report pull, so ask for a Fees Worksheet when you are shopping for your lender. You will receive a LE from your chosen lender within 3 days of making application, per law. 

3) No longer do you need to ask for the guarantee that lender fees will not change at closing, because now that is law. Lender fees cannot change by more than 10%. It’s almost as if the lawmakers read my book! (And maybe some did, who knows.)

4) It is illegal to add a junk fee at closing, a rip-off that used to happen all the time prior to the new laws.

5) Lenders cannot negotiate special deals for individuals. The new law has taken away your right to negotiate fees or a special interest rate. Lenders must charge all borrowers (with the same credit/risk factor) the same cost. Not even a son, daughter, or mother of a loan officer can get “family pricing.” Everyone pays the same. So if you think a particular lender is too expensive, you must go to a different lender. You cannot bargain with the loan officer.


The biggest JUNK FEE perpetrators nowadays are escrow companies. Pick a good one and put it on your Purchase Agreement, because honestly, the selling agents don’t care and often choose the worst and most expensive escrow settlement closers on the planet! Especially in California!! Pick a good national one like First American Title and Escrow or Old Republic Title and Escrow, and then you’ll be fine. If you are in an attorney state like New York, then you choose an attorney instead of an escrow company.

Most everything else in the book is still applicable. 

For a good mortgage broker in your area, you can go here and type in your zip code, then open the drop down on the top right to narrow the miles down to 25. You can read broker profiles and choose one that looks good to you. 

The site is owned by United Wholesale Mortgage, my favorite wholesale lender.

I am not taking new loan applications at this time.

Remember, a mortgage broker has a fiduciary responsibility to look out for YOUR best financial interests; whereas, a bank or credit union does not have that legal responsibility and can look own for THEIR OWN best interests

Two More Reasons Your Credit Score Might Drop

Yesterday, I wrote about a temporary drop in credit score due to opening a new line of credit. Today, I explain two additional reasons you might see your score go down.

Possible Reasons for a Credit Score Drop

  1. If you raise your revolving credit card balances to above 50%, above 80%, or max them out, your score will drop, even if all payments are made on time. The cure is to reduce your balances again (and keep them low).
  2. If you have recently removed all collections/charge-offs from your credit report, you might see your score go down. This is because there are at least 10 credit slots (some call them buckets) or categories for credit profiles.

    All the people who have a bankruptcy go in one category. All the people who have collections/charge-offs go in a category. All the people who have seven years of perfect credit go in a category. Etc. (This is an example. I don’t have the actual category “bucket” labels as that is highly protected and classified by the credit bureaus.)

    If you have been moved from the “D” credit category to the “C” or “B” credit category, then you are competing with people who have better credit than before. Credit scores are calculated by comparison with the rest of the population. It is like a grading curve in school.

    If this happened to you, don’t fret or get upset. It will work itself out in time.

    Manage your credit like the people who have 740+ credit scores, and eventually you will get to 740+ also.

    The best policy is not to obsess and micro-manage your score day-to-day or even week-to-week. That is like a person who is working on weight loss jumping on the scale every hour and then getting upset because their weight went up slightly due to drinking a glass of water.

    Repair Your Credit Like the Pros, and your score will improve — sometimes faster than you expected!

By the way, I have a brand new, ground-breaking book coming out soon!!! It is written, the formatting is complete, and the cover design is in progress. I am very excited about this, so keep a watch out for the announcement coming.
Hint: everyone who has had a bankruptcy in the past 10 years will benefit.

Help! My Credit Score Dropped!

Have you ever seen an unexpected drop in your credit score? And then freaked out, maybe just a little?

If you opened new credit, then your credit score will likely go down. This is TEMPORARY. I’ll explain…

  1. Opening a new credit card
    If you open a new credit card, expect your score to drop 10 to 40 points temporarily. The reason for the drop is that the credit bureaus do not yet know how you will handle this new credit. Will you max out your card and go into more debt than your budget can handle? Will you pay the bill in full or will you carry a balance, thereby indicating that you are overspending? Will you pay on time, as agreed?

    What to do next: Handle the new account like a pro. Pay the bill in full on time each month. Never charge more than 10% to 30% of the limit. Then don’t worry, because in about 3-4 months, the temporary score penalty will be lifted. At this point, your score will likely go higher than ever, because you have more available credit with a low usage rate — and all paid on time.

    If you needed the additional credit because your credit file was too thin (only one account), then you have done the right thing by adding an account to your credit profile. Building good credit takes some time and everyone has to start somewhere.
  2. Opening a new installment loan
    If you needed transportation and it was time for you to get an auto loan, then you have a new installment loan. An installment loan has a set ending date, unlike a revolving credit card that is open indefinitely. Depending on your credit profile, a temporarily score drop sometimes occurs. However, you will not be penalized for having a high balance-to-limit ratio with an installment loan, because that is the nature of a new loan of this type.

    What to do next: set yourself up for auto-pay or pay your bill as soon as it comes in each month. Don’t set it aside and forget the date. Even with auto-pay, keep a watch to make sure the payment went through on time and was not delayed due to a holiday or due to being sold to another finance company.

    An installment loan often raises a credit score, because it creates a more complex mix of credit, as opposed to having only a couple revolving credit card accounts. However, this is not an excuse to go out and buy a car or truck that you cannot really afford. Do not buy at the top of your budget. Be smart and keep your debt-to-income ratio low so that you can handle unexpected situations that require money outside of your normal budget.

    In addition, do not buy a new vehicle if you plan to buy a house within the next year. Remember: buy the house first, then the car later. Doing it backwards is one of the worst mistakes people make, because the new auto loan then prevents them from getting approved for the home loan.

    “House first, car later.” No exceptions!

One Last Word of Credit Advice

Do not obsessively watch your credit score. There is no point in making yourself crazy with micro-managing your score on a daily or weekly basis. If you Build and Protect Your Credit Like the Pros, then your score will reflect that. I have seen a young person’s score go from nothing to over 700 in six months, simply by following good strategy.

If you know someone who might benefit from this information, please share on social media and/or pass it on.
Thank you.

“Smells Like Money”

“This house smells like money,” said my friend, the real estate investor, when she walked into a stinky, ugly, fixer-upper. She should know. She and her husband had purchased over a dozen ugly homes, remodeled them, and then either rented them or resold them for profit.

I purchased a smelly house myself when I purchased my first little one-story as a single woman. It wasn’t because I knew anything about investing in real estate, it was because that was all I could afford. The nice homes were all out of my price range.

Dog urine soaked carpet: it really stinks.

A stove that is crusted an inch thick with burned-on gunk doesn’t help the odor any.

When my loan closed on this little “gem” the first thing I did was get the carpet and stove hauled to the dump.

I had intended to have the hardwood floors refinished, but the hardwood company said the stains were too deep to get out. I didn’t have the funds to rip out and replace floors, so I had a fresh new carpet installed instead. Walls were painted. New light switch covers, the pretty kind, replaced the yucky old ones.

Within a year, the water heater went out, so that was an unavoidable expense. At the same time, it was necessary to replace the toilet in the bathroom.

The house was located on a cul-de-sac, which was great for privacy. I told my kids they could ride their bikes on the street and streets heading east. Under no circumstances were they to ride west, three blocks up to the highway that ran past the airport hotels — and if you are an adult, I am sure you can guess why that part of town was unsuitable.

We lived in that little white house with green shutters for three years.

During that time, I worked hard and increased my income. Then it was time to sell and move into a nicer home in a better neighborhood. The real estate market was good, the house was clean and attractive in a Bohemian, carefree style. I sold for a profit. And get this…

When I added up my net profit (after paying off the loan, closing costs, excise tax, and realtor fee), and then subtracted the cost of cleaning up the house and the cost of my total mortgage payment…

The numbers showed I had lived there FOR FREE and had actually made money every month!

This is why I tell people not to wait until they can afford their dream home with the hardwoods and granite countertops. Don’t wait until you can buy in the most desirable part of town.

And, don’t wait until you have 20% down. You can get a mortgage with only 3% to 3.5% down.

Get yourself a good Buyer’s Agent, a licensed real estate agent who knows the neighborhood, to help you locate a property. A Buyer’s Agent costs you NOTHING. The seller pays all agent fees, not you. I had a good, experienced agent who scouted out the little white house and negotiated a good price.

Buy that stinky house that smells like money if that is what it takes to get your start in real estate.

Did You Receive a Phony Investigation Response?

If a debt collector contacts you for payment on a collection or charge-off, this information is for you.

If the collector is not the original creditor, but a company that purchased the debt from the original creditor, then you have the right to demand a complete validation of the debt. An example would be Midland Credit Management purchasing debt from your credit card holder.

Without validation, how can you be sure that the amount they claim you owe is correct, or that they even have the right to collect on the account?

In Repair Your Credit Like the Pros, there is a letter you can use that requests the five items you are entitled to have verified, per the Fair Debt Collection Act. Sounds good so far, but here’s the problem…

Oftentimes, the collector sends back one document, such as a copy of your bill, without properly validating all five items. This, of course, is not a true and proper debt validation.

The typical next step is to write to the credit reporting agencies. But then what happens if Experian, Equifax, or TransUnion send you back a letter stating the account has been investigated, verified, and remains? You see it is a form letter and you know it was a FAKE investigation, because the collector never provided you with a proper validation when you requested one!!!

This is exactly what happened to one of my book readers recently. She asked me how to proceed.

I do not do credit consulting, but since she had purchased my book, I told her what I would do in her situation. I would send a letter of demand to the credit reporting agency asking for the method they used in their (so-called) investigation, whom they communicated with, and what that person’s contact info was. Then I would add that if they could not supply me with this information, to delete the account immediately, because it was neither validated by the collector nor was it properly validated by them.

She followed my suggestion, and I heard back from her just yesterday.

VOILA! The response came back from the credit reporting agency that the collection account had been DELETED!

That is credit repair success, and it is legal according to federal law and in all 50 states.

If you need credit repair, if you believe you can do it yourself with a little step-by-step guidance and letters already written for you to customize to fit yourself, then you are a good candidate for this strategy here.

Important Tip For Credit Repair

This is not a big secret or a special strategy. It is a wake-up call for people who are on a credit repair journey and are shooting themselves all to pieces.

I was shocked to hear from a national credit repair service executive that about 30% of their clients are currently late on a brand new payment. This led me to think about all the people who are doing their own credit repair.

Listen friends: you cannot challenge an old account for inaccuracy in an attempt to have it deleted from your credit report IF YOU ARE CURRENTLY LATE on a payment.

Would you wear muddy boots while mopping your kitchen floor? What would be the point? You would be making a mess as fast as your attempt to clean it up. Same for credit repair.

If you cannot afford to pay all your bills, then it is time to look deeper to discover why. Do you need a better income? Do you need to add a side hustle or ask for overtime hours? Do you need to look for a better paying job (while still keeping your current job)?

If it will take you more than 7 years to pay off your debt, you should consider speaking with a bankruptcy attorney in your area to see if a BK Chapter 7 makes sense. Every state has its own bankruptcy laws and many attorneys offer a free initial consultation.

If you miss payments due to being disorganized, set up automatic payments. Then set an alarm on your phone to check your bills to make sure auto-pay worked properly.

Pay your bills the same day they arrive, don’t set them aside for later.

I hope this message does not apply to YOU, but for those whom it does, today is a reality check. You cannot fix credit mistakes of the past while you are still making those same mistakes, just as you cannot get a wound healed while you are still poking a stick at it.

Available in paperback and Kindle on Amazon.

Deceptive Radio Ads

Will the lying ever stop? This week I heard another deceptive ad aimed at home owners refinancing. It aired on KIXI Radio in Seattle., but might have been broadcast in other cities, also.

The ad said when you refinance with their company, you “may even get to skip a payment or two.” That is false! Furthermore, it is illegal to state “skip a payment” as a benefit of refinancing, because you do not actually skip a payment, ever.

It can seem like you are skipping a payment, because mortgage payments are made in arears, not in advance. If your refinance closes in August, your first payment will be due October 1st. Does this mean you get to live for free in your house for the month of September? No.

You don’t, in fact, skip the September payment. Your Oct 1 payment covers for September, because mortgages are paid in arears.

If your payoff included a payment due to the day of the month the loan closed, then it might seem like you are skipping two payments. YOU ARE NOT.

You made one payment in the payoff via the closing. You make the next payment after the month is passed. You do not actually get to live in your house free for one month or two months when you refinance. That is deceptive and a violation of mortgage lending law.

I could not locate a phone number on the offending mortgage company’s website, so I sent in an email. At this point, I have received no reply. If I had been inquiring about getting a loan, someone would have replied quickly. Should I report their illegal ad to the Consumer Finance Protection Bureau? What do you think?

I believe I should. After all, I didn’t write Mortgage Ripoffs and Money Savers for nothing.

Crazy Credit Score Penalty: Amounts Owed

We all need to understand the Amounts Owed section on credit scoring, because it makes up a crazy 30% of the credit score!

The points you get under Amounts Owed is almost as much as all your positive credit history and all of your derogatory

See if you can get this credit scenario right:

Three people have identical good credit reports except for each one having one negative item. Which person will have their Amounts Owed (30% of the scoring model) docked the most?

1) Ms. Blue has a $500 Nordstrom card that went unpaid, became a charge-off, and is still has a balance of $500 on a $500 limit.

2) Ms. Green has an unpaid tax lien of $860.

3) Ms. Purple has an unpaid utility bill of $1,000.

Whose credit score got hit the hardest under the Amounts Owed section?

Take your best guess and then let me know by leaving a Comment if you got the answer right.

If you said Ms. Purple because her utility bill has the most money owed, you are wrong.

If you said Ms. Green because a tax lien is serious stuff, you are also wrong.

Ms. Blue is really feeling blue right now, because even though she owes less than her two friends, her credit score got hit the hardest for the $500 maxed out Nordstrom card. How can that be?

The Amounts Owed section applies only to revolving credit. Revolving credit does not have a fixed number of payments, and every time you make a payment, the credit is automatically renewed. Neither a tax lien nor a utility bill are revolving credit. Therefore, the amount you owe on those bills does not affect the super-important Amounts Owed section of your credit score.

When you know how the scoring system works, you are in control of your own credit score. To learn more about credit scoring, pick up a copy of Build and Protect Your Credit Like the Pros here.

Carolyn Warren’s Personal Story, Part 2: “Two Surprises Come My Way”

I was surprised to receive a phone call from the former Activities Director at the company where I had worked in sales before the company shut down. I had only known her for a short time, and not very well.

“Carolyn, I have a fabulous new job, and I want you to come work with me,” Allison said. She went on to explain she had become a mortgage loan officer.

“No thank you, I don’t know anything about mortgages or loans,” I replied.

“It doesn’t matter! They will completely train you. You aren’t working yet, right? Just come and interview. I know you can do it,” she said.

I was getting desperate for a new job, so I interviewed, took an IQ test and a personality test, and was hired. Allison was right: they trained us new hires and gave us each a personal mentor.

What I grew to love about the mortgage business is that it is all about the numbers. Either the loan makes good financial sense or it doesn’t. That was the easy part; the guidelines and rules are complex. Every customer presented a different and unique scenario, making every day a learning experience.

Many challenges presented themselves, and in those early days, it was always something. There were credit challenges, income challenges, employment challenges, and if the borrower happened to be perfect, then a weird property challenge would pop up, like the appraiser would discover a hidden propane tank in the yard or the underwriter would question the life of the roof. People were crazy, too. Like they would go out and buy a new car before their loan had closed, which made the loan flip from approval to denial.

I used to receive a lot of phone calls from collection companies and attorneys asking if I could do a debt consolidation refinance for one of their debtors who owed money. That gave me valuable experience into what goes on inside the collection offices (which had secret entrances and the collectors used fake names), and how to negotiate settlements.

After working for the direct lender, I went on to being a full-service mortgage broker, then to working in wholesale as an account executive.

All those seemingly dead-end jobs in my past had served a purpose. As a receptionist, I learned telephone skills. As a secretary, I learned organization. My sales jobs taught me about people and how to listen to their needs and provide excellent service. My last job provided me with a contact who invited me into the mortgage industry. It was all a big puzzle that fit together in time.

One day, a friend invited me to attend her church with her. After the service, the pastor led me back to my Savior. It was like the curtain of heaven rolled back and a funnel of love poured down upon me. It was instant and powerful! God’s love washed away years of pain and confusion. Tears of joy ran down my face. My heart felt like it would burst with gladness. The drive home was 40 minutes, and I wept for joy all the way. God did love me. It was marvelous beyond comprehension! What a great surprise it was!

I pray that you may have the power to grasp how wide, how long, how wide, and how deep is the love of Christ. (Taken from Ephesians 3:17-18.)

I should also mention that a new sweet kitty came into our home. I named her Francie and she brought us much joy.

Kitty Francie