Credit Repair Series (2 of 3): Reviewing and Challenging Credit Items

By: CameronPassmore 

After obtaining your credit report from, you should have a fair amount of information to go over. Many people are only interested in their credit score: do not make this mistake. A credit score is just a number, after all, and what you should really be interested in is what is driving that number. The only way to understand why your number is what it is (low or high) is to understand what is in your report.

Looking at Your Report

Many people are only interested in their credit score: do not make this mistake. A credit score is just a number, after all, and what you should really be interested in is what is driving that number.

Your credit report is made up of a bunch of individual entries, such as the one shown above. The red circles highlight the portions of each item that you will want to review. At its simplest, this is an exercise in checking for accuracy. Nobody is in a better position than you to know if this data is correct. So ask yourself this question: does all of this look accurate? If something does not, then you may have found an actionable item that could improve your credit score.

Please remember that there is no such thing as harmless inaccurate data. For instance, a common error is a credit card that has been closed, but shows as still open on your credit report. It may have a spotless payment record and it may show a zero balance. But, it still tells creditors that you already have thousands of dollars of credit at your disposal that you do not actually have. Thus, there is a real difference between your actual capacity to manage another line of credit, and your capacity to do so as documented in your credit report. The difference between these two can increase interest rates on loans you apply for or in some cases even get you denied for a loan. More is not more, accurate is more.

Challenging Items

Now that you have identified an inaccuracy, it it time to act on it. The contact information for the three reporting agencies was provided in Part 1 of this series. The other contact information you will need to know is from the company that provided the information. As you can see, above, the entry on your credit report already contains this information!

The first thing you need to do is gather your evidence. Do you have receipts showing your payments? Confirmation emails? Printable online balances? A transaction history? Use it. You want everything that tells your side of the story. Remember that both the credit reporting agency and the information provider are required to keep your nonpublic data… nonpublic. They will need this information to make corrections to your report. Want to get really specific? Make copies of your credit report and circle the items in question.

Once you have compiled your evidence, write a letter explaining exactly what is wrong, exactly what it should be, and where in your evidence that can be verified. The final step is to sign the letter and make two copies of everything: one for the credit reporting agency, and the other for the information provider. The originals are for your own records.

In reality, this approach is somewhat redundant as both the agency and the information provider are obligated to work together to find a solution. But the extra copy is worth your time: both entities will have everything they need to act on your inquiry from day one, and even under the best of circumstances you are looking at about 30 days before you see any changes. A month might not seem that long, but imagine how long it could feel if it is standing in the way between your family and your next home: 30 days can be an eternity.

Investigation Complete

Once the reporting agency finishes with your inquiry, they are obligated to notify you of the results and to provide you a new copy of your report should your inquiry lead to a change in your credit report. They are also obligated to provide new information to anyone who requested your credit report in the last six months.

There is always the possibility that your credit report will not change. Remember that only inaccurate information will result in a change. Disputed charges may still appear: disagreeing with an item on your credit report is not enough to get it removed. You may, however, request that a statement be attached to your credit report regarding the disputed item. This statement will accompany your report, allowing you to provide context regarding the unchanged item.

Is a Payroll Card Right for You?

According to Forbes, In 2012, $34 billion dollars were loaded on 4.6 million payroll cards. By 2017, Forbes projects that  this number will increase to $68.9 billion dollars. Payroll cards are a recent phenomenon increasingly utilized by companies both big and small alike.

Payroll cards are an alternative to an employee receiving their salary or wages in the traditional form of check or direct deposit. Before deciding to transition away from traditional mediums of compensation and use a payroll card, it is important to make sure that a payroll card is right for you.

A payroll card is essentially a debit card with a stored value that is reloaded by your employer every pay period. The card does not extend any credit to the cardholder; rather the cardholder is limited to spend only those funds preloaded on the card. Payroll cards do not require any credit check or prerequisites like a credit card.

The major benefits of these cards is that they present many of the same features of a debit card, but do not require a bank account or an extension of credit. Additionally, the cards eliminate obsolete check cashing fees, allow the user to make purchases over the internet or at retailers, and provide similar FDIC protection as a debit card supported by a bank account.

While these features of a payroll card may be enticing, users should fully understand the terms and conditions associated with the specific payroll card they are using. First, in some states a user cannot be charged any fees to access their money. Know the laws of your particular state. The fees associated with these cards can often be outrageous including:

– ATM Withdrawal: $1.75

– ATM Balance Inquiry: $1.00

– Monthly Fees: $9.95 (Vision Premier Card, Univision Card)

– Replacement Card: $6.00

– Paper Statements: $2.95

– Inactivity Fees: $7.00

For more information about recent payroll card fee investigations by the Attorney General of New York, click here.

While some of the above fees may be typical of debit cards, these fees are different for two reasons. First, the fees tend to be higher on average than those for debit cardholders. Second, several fees exist for payroll cards that are not common for debit cards such as fees for inactivity, replacement cards, most of all monthly service fees.

The final problem associated with recent payroll card scams is that employees are sometimes forced by their employers to use payroll cards to receive their pay, rather than a payroll card being one option among many.According to the CFPB, an employee may have the option to use a payroll card, but cannot be forced or compelled to do so.

Employers cannot force their employees to use a payroll card; to do so is illegal. The Consumer Financial Protection Bureau has stated that they intend to use their enforcement powers to stop employers from forcing employees to use payroll cards. According to the American Payroll Association, employers save approximately $2.75 per payment using payroll cards rather than direct deposits or checks. This likely explains why employees may coerce employees to receive their income in for form of a payroll card. Additionally the fee structures of the cards are agreed upon between the card issuer and the employer, so employers may be benefiting as well by charging fees to their employees to access their own money.

While payroll cards are not inherently evil and may present many benefits for your and your financial wellbeing, there are risks to be aware of. If you choose to accept a payroll card from your employer, make sure that:

– It is YOUR choice to accept your income in the form of a payroll card deposit,

– You are aware of the fee structure, if any, associated with the card and its features,

– The benefits associated with your choice to use a payroll card outweigh the costs, and

– That a debit card supported by a bank account would not serve your interests better.

You work hard for your money. Make sure that the way you access that money is serving your financial interests, goals, and needs. If you believe that you have been coerced by your employer to receive your compensation on a payroll card, or that the administrator of your payroll card is engaging in other illegal behavior, you can submit your complaint here.

Watch Out for These Common Internet Scams!

As you may remember from last year’s post on online shopping, the Internet is a fantastic resource but one that must be used carefully. This is particularly true when one is using email and social media sites such as Facebook. Although Facebook and email have transformed the way that we communicate with each other, they also leave us vulnerable to phishing and other acts designed to steal private information from unwitting consumers. Below is a list of common Internet scams that you should watch out for when using email or social media.

Phishing: Emails appear to come from trusted sources and request account information for personal bank accounts or other forms of personally identifying information. Examples include emails with messages like:

“We suspect an unauthorized transaction on your account. To ensure that your account is not compromised, please click the link below and confirm your identity.”

“During our regular verification of accounts, we couldn’t verify your information. Please click here to update and verify your information.”

“Our records indicate that your account was overcharged. You must call us within 7 days to receive your refund.”

Funeral Notification Scam: Scammers are sending bogus emails with the subject line “funeral notification.” The message from the “funeral home” offers condolences and offers a link for more information about the upcoming funeral. The link downloads malware onto the your computer.

The Fake Friend Scam: When a Facebook friend request is sent from someone you already think was your friend, and you accept without realizing, your Facebook information becomes available to a scammer who may either (1) recommend sketchy websites that download malware to your computer; (2) use your account to gather information about your other friends; or (3) suck you into a romance scam, which occurs when you develop an online relationship with someone who is not who they portray themselves to be. This is also called catfishing. These scammers may try to obtain credit card or other financial information that may lead to identity theft or otherwise attempt to expose you to viruses.

There are steps you can take to prevent your information from being stolen! 

(1) Delete emails and text messages that ask you to provide personal information that are not from trusted sources.

(2) Do NOT click on links from emails unless you trust the sender AND have verified with the sender that they actually sent the message.

(3) Call the bank or business that appears to have sent you the message by using the phone number on the back of your credit card or the financial statements that you’ve received from that organization.

(4) Keep your security software updated.

(5) Use a pop-up blocker and don’t click on any links that pop-up.

Think before you click to protect your personal information, your financial information, and your friends and email contacts from potential scammers!

Affordable Care Act and Nonprofit Hospitals

By: CarmenFeldman

On March 23, 2010, President Obama enacted the Patient Protection and Affordable Care Act (also known as ACA, or Obamacare). The ACA made many changes to existing law, among them the tax code. These changes include additional requirements for tax exempt, or non profit, hospitals. In order to remain its tax exempt status (i.e. not pay property taxes, etc.), a hospital now must have a written policy that addresses financial assistance available to patients. This financial assistance policy (FAP) must address the eligibility criteria for the assistance and must explain what type of financial assistance (discounted or free) the hospital provides. The FAP must also explain the application process and must be publicly available. As an example, here is Boulder Community Hospital’s FAP.

Nonprofit Hospitals are now also required to determine if a patient is eligible for financial assistance before taking extraordinary collection actions. Extraordinary collection actions generally include lawsuits, liens, and similar collection methods. However, this also includes reporting to collection agencies. Therefore, a hospital cannot report your debt to a collection agency before they have ensured that you are not eligible for their financial assistance program. Because reporting to a collection agency can have a significant impact on a credit score, this requirement adds a layer of protection to the consumer.

Be Prepared! Next time you are headed to the ER, make sure you have read the hospital’s FAP in advance. Most hospitals have customer help lines who will be happy to assist you in case you have questions.

How to File a Complaint with the CFPB

The CFBP Platform

The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Act after the financial crisis to protect consumers from unfair lending and finance practices. Specifically, the Dodd-Frank Act required the CFPB to receive and resolve consumer complaints.

The CFPB has recently launched their online dispute resolution platform where consumers can submit complaints regarding financial products and services including, but not limited to:

  • Mortgages
  • Credit cards
  • Debt collectors
  • Credit reporting agencies
  • Bank accounts
  • Money transfers
  • Payday loans
  • Student loans
  • Vehicle loans
  • Other consumer loans

Additionally, if a consumer wishes to not file a complaint but merely to share their story, the platform provides them the opportunity to do so.

How it works

The process is very simple. A consumer will simply select “Submit a Complaint” from the main page, describe the underlying issue, and specify their desired resolution. Next, the consumer will provide the company or creditor’s information, their personal information, and attach any relevant documentation. Once the complaint has been submitted, the CFPB will forward the complaint to the company for a response.

The company will review the complaint, communicate with the consumer as needed, and report back to the CFPB about the steps taken. Complaint data is shared with state and federal law enforcement agencies to better enforce federal laws and promulgate new laws to protect consumers.

Will I actually win my complaint?

While there is no guarantee that you will win your complaint, this enhanced and streamlined process may improve your chances for several reasons. First, the company will be working with federal regulators that have greater bargaining power than most consumers do. Second, the process ensures that your complaint gets to the right people at the company. Third, dispositions will be shared with other consumers- thus increasing transparency and protecting future consumers from unfair practices.

To see complaints submitted to the CFPB and consumers’ success on their complaints, click here.

What happens to the data that I give the CFPB?

The complaint data is shared with state and federal agencies, as well as with congress twice a year. The data is analyzed to help supervise companys’ practices, enforce laws, and write new laws. The data is published in the Consumer Complaint Database. No personal information is published including your name, contact information, account numbers, social security number, etc.

I want to file my complaint, now!

Just click here!

If you would prefer to speak with someone at the CFPB about your complaint, call 1-855-411-2372

If you do not have a complaint, but want to let the CFPB know about potential violations of federal consumer financial laws, you can email them or call 1-855-695-7974.

Credit Repair Series (1 of 3): How to Obtain a Credit Report for Free

Learning that your credit rating has slipped can send you into a panic. Our credit ratings are our reputations, financially, after all. It is a thing we own, like our cars or our homes. Thus, waking up one morning to learn our credit ratings have been damaged can be unnerving to say the least.

What’s more, while a leaky roof or a dented door is easy enough to understand, who really knows where all these credit numbers come from, anyways? They just seem to manifest themselves. And, if you are among the many who do not understand the intricate workings of credit scores, know that you are in good company (the author of this blog post has limited knowledge at best).

The problem is that this great unknown “credit thing,” combined with the feeling of loss associated with a credit downgrade, can lead to rash behavior. Or at the very least a sort of dependance on institutions who claim to know the game, and promise to make it all better…. for a price. But there is hope: you do not need to know how credit scores are formed to know what you might do about your own.

Credit Service Organizations have No Special Powers

These organizations check, and attempt  (more on this in Part 2) to repair your credit for you. But they ultimately can do nothing you couldn’t do yourself… for close to free.

Step One: Get Your Report

You obviously need the whole story before you will know how to proceed. Colorado law requires that credit bureaus provide you with one free credit report a year, upon request. There are services on the internet that will pull such reports for you, but they are always looking to offer something more. To save time and possibly money, send the request directly. The three major bureaus are:

Equifax: PO Box 740241; Atlanta GA 30374; (800) 685-1111;

Experian: PO Box 949; Allen TX; 75013; (888) 397-3742;

Trans Union: PO Box 6790; Fullerton, CA 92834; (877) 322-8228;

It should be noted that these bureaus will request personal data before they will send a report. This includes your social security number. But rest easy: most, if not all, of the information they will want they already have. The purpose of requesting it is to make certain you are who you say you are. Identify theft can only further damage your credit: don’t be afraid to provide the necessary info, this keeps us safe.

Not only may you obtain a report once a year for free, but if you are denied credit the creditor must give you the name and address of the bureau that supplied the report upon which the decision was made (it will most probably be one of the three above). If you contact them within 60 days, you may receive a copy of that report for free.

Once you receive your credit report you can begin to repair to to the extent possible. This will be covered in part two of our series on credit repair.