On this interview, you will learn:
— How I negotiated to save my family $240,000 in loan payments. It was a scary process, but it was also the best thing I’ve ever done!
— Why saying the wrong thing to your credit card or collection company could ruin your opportunity for debt settlement forever.
— How to stop the harassing phone calls, once and for all. You’ll learn exactly what to say when collectors call.
— Methods debt collectors use to ramp up your emotions and manipulate you into overpaying for your debt.
— Why you are just 30 to 90 days away from settling all your debt for 28¢ on the dollar. Yes, you read this right!
— Plus, much more…
Author: Philip Tirone
Student Loans and Credit: 9 Things You Must Know!
What’s the relationship between student loans and credit scores? You might be surprised! In this article, we take a look at the nine things you should know about student loans so that you can build a great credit score.
Nine Things You Should Know About Student Loans and Credit
First a little background. Student loans are unsecured loans (without any collateral backing them) issued to help with the costs of tuition, books, board, and other school-related expenses. As with any other loan, your credit score is deeply impacted by your student loan. When you make your student loan payments on time, your credit score will improve. If your payments are late or if you skip a payment, your score will drop.
Student loans are a great way for young adults to begin the all-important task of showing lenders that they can handle debt. If lenders see that you can make payments on time and in full, your credit score will go up and you will be more likely to get larger loans in the future.
This is important because you will need credit upon graduating from college. Your first employer might run a credit check, assuming that your credit score is a good indication of whether you are responsible or not. And a landlord will definitely run your credit before renting a home to you.
With all this in mind, here are nine things you should know about student loans and credit.
Student Loans and Credit, Fact #1:
When you apply for a student loan, your credit might or might not be pulled. Some lenders do require a credit score, but others do not. If your credit score is pulled, a credit inquiry will be added to your credit report. This might cause your score to drop, but the impact will be minimal.
Student Loans and Credit, Fact #2:
About 30 percent of your credit score is determined by your outstanding debt: the ratio of how much you owe versus how much you have paid. The more you have paid and the less you owe, the better your score. If your payments are being deferred until you have graduated, or if you have deferred payments for another reason, the ratio will not be in your favor, and your score might drop. However, it will start to increase after about six months of timely payments.
Student Loans and Credit, Fact #3:
With this in mind, consider that students who are positioned to pay back their loans before graduating will enjoy a faster ride to good credit. Even though a lot of student loans do not require repayment until you have graduated, your credit score might be higher if you start repaying the loans immediately. Keep in mind that some employers will run a credit check when you apply for your first post-college job, so having a high credit score could behoove you.
Some people have speculated that if borrowers pay back their student loans too fast, they will lose credit points (presumably because the maximum interest on the loan will not be accrued if the loan is paid off early). I think this is a bogus claim. The exact details of credit-scoring formula have not been released, so I cannot definitely confirm this theory one way or another, but I seriously doubt its accuracy. Credit-scoring bureaus are not interested with your creditor’s ability to earn the most interest, but rather with your ability to repay your loan on time. The bureaus want to know that you will pay your debts on time. Paying your student loans sooner rather than later is a wise thing to do because your debt-to-principal ratio will drop and your score should increase.
Student Loans and Credit, Fact #4:
Before you leave college, avail yourself of the opportunity to receive exit counseling, a service most schools offer to prepare their students to repay federal student loans. This counseling can provide you valuable information about your rights and responsibilities and the terms and conditions of your loans.
Student Loans and Credit, Fact #5:
Once you begin repaying your loan, never miss a payment. Here’s something you might not know about student loans and credit: 35 percent of your total credit score will be drawn from your payment history on credit cards and loans.
Student Loans and Credit, Fact #6:
If you cannot make a payment, ask for forbearance, a short-term agreement that allows you to make smaller payments, or no payments at all. Otherwise, you will harm your credit score. Keep in mind that if you do not make payments, interest will continue to accrue and the amount due will grow larger.
Student Loans and Credit, Fact #7:
Keep in touch with your lender. If you are struggling with your payments, never wait until the lender approaches you or until a delinquency notice is logged on your record. Instead, initiate communication with your lender. Talk about forbearance or student loan consolidation.
Student Loans and Credit, Fact #8:
Student loans can never be discharged during bankruptcy.
Student Loans and Credit, Fact #9:
Making regular payments on your student loans is a great way for young adults to begin building their credit score, setting the foundation for better loan terms and lower interest rates on future loans, and saving bundles over the course of a lifetime. But this isn’t enough. As you move on after school, you should try to incorporate different types of credit into your finances while keeping current on your payments. The mix of credit you have makes up 10 percent of your score. The credit scoring bureaus want to see that you can handle a variety of types of loans—from credit cards to student loans to car loans.
Now that you know the nine important facts about student loans and credit, be sure you learn the 35 facts the banks don’t want you to know! These money-saving tips and insider secrets about credit scores can help you save a bundle and position yourself for success.
Free Government Grants, Diet Pills and Credit, Oh My!
Looking for free government grants endorsed by President Obama and Vice President Biden? Dietary supplements supported by scientific research and endorsed by Oprah? How about exclusive credit offers? Keep looking.
The Federal Trade Commission (FTC) has halted an operation called, the “Grant Connect” program, that allegedly deceived and mislead consumers about bogus products and services with unsubstantiated claims.
The complaint lists Juliette Kimoto and Johnnie Smith, amongst others, behind the “Grant Connect” program. As part of an agreement with the FTC several defendants have agreed not to market products and serviced similar to those they sold and pitched to consumers previously. Settlements also impose an almost $30 million judgments against them.
Allegedly “Grant Connect” programs used pictures of political figures and celebrities to make it appear that they endorsed their products they were selling. They used pictures of President Obama, Vice President Biden, and the American flag to bolster claims that their bogus government grants service was affiliated with the U.S. government. They promoted their dietary supplement by falsely claiming that it was endorsed by Oprah Winfrey and supported by scientific research, and failed to adequately disclose that their credit offers were merely memberships to a costly shopping club.
The FTC claims that the defendants failed to disclose to consumers that purchased their products that they would be enrolled in continuity plans and charged high monthly fees for mostly unrelated products along with using fake testimonials to promote products.
The first settlement order announced October 17, bans defendant Johnnie Smith from marketing or selling grant-related products or services, credit-related products, work-at-home business opportunities, weight-loss related dietary supplements, and other products or services using a negative-option or continuity program in which consumers are billed automatically until they decide to cancel.
Smith also is banned from assisting anyone else selling these programs or products and from taking customer payments using pre-approved electronic fund transfers. Finally, Smith is banned from using testimonials to sell products or services, and is subject to the monetary judgment, under which he will pay $45,000.
The second settlement order bans Juliette Kimoto and four companies she owned from: selling grant-related products or services, credit-related products, or work-at-home business opportunities; selling products or services with a continuity or negative-option program; taking consumer payments by pre-authorized electronic funds transfer; assisting others engaged in these activities; and using testimonials.
The second settlement order also bans the four companies from marketing dietary supplements claimed to assist in weight loss or other specified outcomes, and prohibits Juliette Kimoto from making misleading health claims related to dietary supplements. The order also requires Juliette Kimoto to pay more than $90,000 and to turn over various personal assets, including jewelry, a piano, and a 1967 Chevy Camaro, along with all the cash and other assets held by the entities she owned. The total value of the cash and assets turned over by Juliette Kimoto and the companies she owned exceeds $220,000
Author: This article was contributed by GetOutOfDebt.org, a site that helps people find good debt relief solutions to deal with tough money troubles.
Source: Free Government Grants, Diet Pills and Credit, Oh My!
How Is a Credit Score Calculated?
How is a credit score calculated? This is a question I’m asked often, and the answer is not a simple one. In fact, there are a lot of people who sell something they call a “credit score,” but they are actually selling garbage. This blog clarifies the players, how they work together, and what you can do to make sure that you get your hands on your true credit score.
How Is a Credit Score Calculated? The Players
Let’s start with the three main players:
1. Your creditors,
2. The credit-reporting bureaus, and
3. The credit-scoring formula.
Your creditors are those banks, lending institutions, people, and entities that report to the three credit-reporting bureaus. They consist of:
- Banks and lending institutions that have granted you with a loan or a credit card, or that have considered a loan or credit card application.
- People, entities, or companies that are pursuing you for unpaid debt. If you fail to pay a bill or debt, a creditor will attempt to collect this debt. For instance, you might have a tax lien or a judgment against you. In either case, a creditor will attempt to collect the unpaid money. If you fail to pay a bill, it will be turned over to a collection agency, which will attempt to collect the debt.
It is important to note that the following companies do not report information to the credit-reporting bureaus, unless you fail to pay them bills, in which case they will be turned over for collection and reported to the credit-reporting bureaus:
- Utility companies
- Cell phone companies
- Landlords
Alimony and child support payments are also not reported to the bureaus, unless you fail to pay.
Now let’s talk about the three credit-reporting bureaus: Equifax, TransUnion, and Experian. Your creditors report information to one, two, or all of the credit-reporting bureaus. For instance, your Visa credit card company might report your payment history to Experian and Equifax. A bank that provided you with a small line of credit might report only to TransUnion, whereas your mortgage lender would most likely report to all three.
The credit-reporting bureaus do two primary things:
1. They collect information from your creditors.
2. They report your credit score by applying a credit-scoring formula.
So that brings us to the credit-scoring formula. Your credit score is computed using an intricate formula that considers a variety of factors.
Here is where it gets confusing. The credit-reporting bureaus apply a different credit-scoring formula depending on who is asking for your credit score.
Let’s say that you apply for a rental unit. The landlord is concerned primarily with your history of mortgage payments, as well as any evictions you might have on your record. Now let’s imagine that you also apply for a car loan. The bank considering your car loan is concerned with your history of installment payments and whether you have any repossessions on your record.
Equifax, Experian, and TransUnion know that the landlord and the car company are interested in different things, so they apply a different credit-scoring formula depending on who is asking for your credit score.
Important to note is this: 90 percent of all lenders use a credit-scoring formula called a FICO Score. None of them use something called the Consumer Score. We will discuss this in detail later. Just remember this: Of all the credit scores you can buy, the FICO score is the most important. A consumer score is the least important.
Before we get into that, let’s talk about how the players work together.
How Is a Credit Score Calculated? How the Players Work Together to Determine Your Credit Score
In summary, your creditors report to one, two, or all three of the credit-reporting bureaus. When a person or lender inquires into your credit score, the credit-reporting bureaus determine which credit-scoring formula is most appropriate. They apply the formula, and then report your credit score.
Because not all creditors report to all of the credit-reporting bureaus, the three bureaus do not have identical information. Therefore, if a bank pulls your credit score from the three credit-reporting bureaus, the bank might end up with three different credit scores. Experian might give you a 650 score, TransUnion might determine that your score is 672, and Equifax might determine that your score is 714.
The banker would ignore the high score and the low score, and just take a look at the score that falls in the middle. In this case, the bank would consider the score provided by TransUnion (672) to be your credit score.
How Is a Credit Score Calculated? Getting Your Hands on the Right Score
Remember a few paragraphs ago, when I told you to remember that the FICO score is the most important score, and that the Consumer Score is worthless? Let’s talk about this now.
As I’ve mentioned, the credit-reporting bureaus have a lot of different formulae they can apply to determine your score. They chose the formula based on who is asking for your credit score.
If you pull your own credit report and buy your credit score, most often, the Consumer Score will be applied. This is a generic credit score that no lender, landlord, or employer will ever use. Only the consumer sees a Consumer Score.
In this way, the Consumer Score is worthless. And unfortunately, it is often a lot higher than a FICO score. This means that if you buy your credit score from most places online, you will receive a Consumer Score that gives you an artificial sense of security about your credit score.
Almost all lenders use a FICO score. If you buy your credit score, make sure it is a FICO score so you have an accurate idea of where you stand. A consumer can buy FICO scores from both Equifax and TransUnion at www.720FICOScore.
However, Experian does not sell FICO scores to consumers. If you want to see all three scores, a lender will have to pull your credit score. The benefit of this is that you have all three scores. You can ignore the high score and the low score, knowing that the middle score is the credit score a lender would use to determine your interest rates.
The downside of getting your credit score from a lender is that a hard credit inquiry will be added to your credit report.
How Is a Credit Score Calculated? The Difference Between Credit Scores and Credit Reports
In considering the question, “How is a credit score calculated?” I have spent a lot of time talking about credit scores. I want to make an important note: There’s a difference between a credit score and a credit report. A credit score is the three-digit number that predicts your likelihood of paying your bills on time. A credit report is a listing of all the information that was considered in your credit score.
Once a year, you can get a free annual credit report. If you want to look at your credit report so that you can identify errors, go ahead and download your free annual credit report. However, you should never, never buy a credit score from www.annualcreditreport.com as this site sells consumer scores only. Remember that the only place to get a FICO score is from FICO itself or from your lender.
This concludes my lesson in “How is a credit score calculated?” I know this is a complicated subject, so if you have any questions, be sure to leave them in the comments!
A Dirty Reputation, by 720 Credit Score
| Listen to the interview here: |
This blog post is about something near and dear to my heart…
Sales.
No, that’s not a joke. See, sales has a dirty reputation—our culture says it is a bad thing.
But the truth is that a salesperson should give the buyer something he or she really needs—and that’s a good thing.
Plus, what most people don’t realize is that even if they aren’t in a sales position, they are still in sales.
If you ever apply for a loan, you will need to sell yourself to the loan officer. If you ever apply for a job, you will need to sell your talents to the employer.
If you ever want to woo a significant other, you have to highlight your positive qualities.
So I’m a big fan of improving the sales process.
This is why I interviewed my friend Eric Lofholm, a master sales trainer (in fact, he once trained Tony Robbins’ people).
If your job is sales-related (real-estate, insurance, pharmaceutical, service-providers, etc.), you must listen to this recording and learn how you can tweak three systems to massively improve your results.
The recording is at the end of this blog post.
And remember … even if you aren’t in the sales business, you are in sales, so I encourage everyone to listen to this recording below!
Philip Tirone
P.S. Ever wanted to be a better communicator? Master sellers learn excellent communication skills, so be sure you listen to this recording if you want to improve your relationship with your spouse, friends, or family members.
| Listen to the interview here: |
To learn more about Eric’s Selling System, click here for more information.
To purchase Eric’s system at a special discounted price for all of my followers, click here to purchase.
Your Bank’s Big Lie About How Credit Scores Affect You
I recently conducted a private class for the parishioners of a church about how credit scores affect you. After the class ended, one of the participants, Lori P., sent an email that shows how banks lie to their customers.
‘I am involved in an entrepreneurial program that helps people become business and home-loan ready, as well as get them ready for business start-up. Four of us in the program had attended a meeting with a founder of a minority bank here in Los Angeles that explained to us how to become loan-ready for his bank. He mentioned that all we needed was a 630 credit score along with other criteria.
‘I thought, “Wow, only 630? That seems easy.”
‘Then when I listened to your program, it made sense why we only needed a 630: It would be money in the bank’s pocket.
-Lori P.”
I was livid when I received this email. Lori is helping people from her community take control of their financial future, and the banker is thrilled to charge them higher fees because of a lower credit score. How are hardworking Americans ever supposed to get back on their feet when their banks are ripping them off?
And this happens all of the time. Every single day—every single hour and probably every single minute—a banker neglects to tell a customer about the easy steps people can take to fix a bad credit score.
Instead of telling the truth about how credit scores affect you, banks across the country are letting their customers pay an arm and a leg in interest rates.
For instance, the banker Lori met with isn’t telling her that the difference between a 630 credit score and a 720 credit score is $63,720 over the course of a 30-year loan on a $216,000 mortgage.
The bank is deceiving its customers to the tune of $63,720!
I wrote 7 Steps to a 720 Credit Score because I wanted to help my mortgage clients learn how to build credit and lower their interest payments. Then I decided I wanted to spread the word about how credit scores affect you. I went to bank after bank, telling them I would give them access to my book so that their clients could how to raise their credit scores and negotiate lower interest rates.
Guess how many banks signed up.
Not one. Why would they do the right thing when they could pocket $63,720?
This is so typical of what happens every day. While the “little guy” struggles to get his head above water, the government is busy bailing out big business because they are “too big to fail.” And these very same businesses turn around and lie to their customers. This is flat-out unfair and wrong.
Learn how credit scores affect you, and stop the banks from stealing more of your hard-earned money. Download The 35 Things Your Bank Doesn’t Want You to Know About Credit.
Lily Tirone (my wife), told me something, by 720 Credit Score
My wife, Lily Tirone, and I just welcomed Baby #4 into the world (read about it here: “Thank You, Mrs. Lily Tirone”).
Little Emma is about six weeks old.
Suffice it to say, we aren’t getting a ton of sleep in my household.
The other morning, I was mulling over the fact that sleep-deprivation is used as a torture device when Lily reminded me of something …
I’m not really going to remember this.
So much life has happened between now and when my other kids were born, that those first few months are a fog. I look at my older kids, and I just remember the good stuff.
This reminder helps me make it through the tough times. Some much life is going to happen between now and six months from now. I can do it. I can wake up for all those midnight feedings.
… and 2:30 a.m. feedings.
… and 5:00 a.m. feedings.
In fact, not only can I do it, but it won’t even be important in six months. I’ll barely remember what it was like. So I can do it.
And so can you. If you are in a financial mess, it might seem unbearable—at times even torturous.
But if you do what you are supposed to do—take the tough steps now—you will work your way out of the mess. And so much living will happen that eventually … it won’t seem to bad.
You know what you have to do: Start rebuilding your credit. Cut wayyyy back on your expenses—downsize if you have to. And if it’s really, really bad, maybe you even need to declare bankruptcy and give yourself a fresh start.
Whatever it is, take that step now. You can do it!
That Lily Tirone is a smart cookie, isn’t she? If you want to comment on her wisdom, leave a message below.
Philip Tirone
Divorce and Credit … Read this NOW!
The other week, I got an email that made me cringe.
The email was from a man had just been through a divorce. He explained that he lost 94 percent of everything when he and his wife divorced.
“She got the properties, and I got the mortgages.”
Per the terms of their divorce decree, his monthly spousal support check was to include the cost of the mortgages.
When I read that, I just knew what he was going to say next, and that’s when I cringed…
His ex-wife was cashing the checks, but she wasn’t paying the mortgages on time… the very same mortgages in his name.
This Happens All the Time
This situation is common, so if you ever go through a divorce, make sure you protect your credit.
In short, here’s my advice:
1. Refinance the mortgage in your ex’s name only. In the case of the man who emailed me, he should keep paying spousal support. If his ex fails to pay the mortgage, she will be the only one who suffers. He cannot do anything about the past, but in the future, refinancing in her name will protect his credit.
2. If she cannot qualify for a refinance, he should renegotiate the terms of his spousal support so that he pays the mortgage directly, sending his ex a spousal support check for the remainder.
Click here to read a longer article about divorce and credit.
How to Fix a Bad Credit Score the Easy Way
People who have fallen onto tough financial times always want to know how to fix a bad credit score. In their attempt to learn how to build credit, they will spend thousands of dollars on credit repair services that promise to wipe their credit reports clean of all errors. Some people even try to create a new credit identity, as if they can sweep past errors under the rug.
The big secret, though, is that most of these services do not work. At best, these credit “repair” services will only temporarily suppress credit problems by using illegal methods to briefly suspend errors from your report—errors that will resurface only after the company has walked away with your dollars. At worst, they will expose you to lawsuits by using illegal methods of attempting to remove delinquent information from your credit report.
The good news is that there are tons of ways to fix your credit score that are both effective and legal. If you want to learn how to fix a bad credit score, keep these two components in mind:
How to Fix a Bad Credit Score, Rule #1: Be strategic.
As you can tell, I am not a fan of credit repair strategies that purport to increase your credit score by surreptitious methods. However, there are legal and effective strategies you can use to raise your credit score fast:
1. Build your credit score fast by adding yourself as an authorized user to a family member’s credit card, so long as it is in good standing.
2. One of the fastest ways to build credit is to transfer your credit card balances to your spouse.
How to Fix a Bad Credit Score, Rule #2: Focus on current behavior.
Think of it from the credit bureaus’ perspective. Wouldn’t you be much more impressed with someone who positively changed his behavior than someone who tried to weasel out of past mistakes? Instead of arguing with the credit-scoring bureaus about all of your late payments, try taking a few simple but effective ways to let the credit-scoring bureaus know you have changed your habits.
This strategy works because credit-scoring bureaus place more weight on current behavior than on past behavior. If you made a mess of your credit score two years ago, the credit-scoring bureaus will pay less attention to this if you are making smart decisions today. This means that you should:
- Pay your bills on time.
- Keep your credit card balances as low as you can – preferably below 30 percent.
- Keep three to five credit cards active. Use them at least once a month, but pay your balances as much as possible each month.
- Open new lines of credit after a financial disaster, like bankruptcy or foreclosure. The credit-scoring bureaus need proof that you can manage several lines of credit. If you wipe your hands of credit, they will not have this proof, and your credit score will not increase. Your bad credit score will increase if you have between three and five credit cards, as well as an installment loan, all in good standing. Bear in mind that your credit score will initially drop upon opening a new line of credit. But after six months of timely payments, it will begin to increase.
So here’s the big secret: If you want to know how to fix a bad credit score, don’t turn to credit repair companies that make promises that seem too good to be true. Repairing a credit score is simple, but it cannot be achieved with the wave of a wand.
Credit Score = Your Financial Reputation, How Much Are You Losing?
Whenever I was in basic training, each recruit, each private was assigned their own roster number. That roster number was our identifier. We had to put it on all our gear. I had to have it strapped across a tape on my Kevlar, which is our helmet. It dictated as far as when we would eat chow and what order we would fall in. It also would designate when we would draw our weapon from the arms room when we had to go to the different ranges. Our roster number was our second name. First name was Private, and the second name was our roster number. Every time you heard your roster number yelled by a drill sergeant or a captain, you always knew either you were called to do something, or you got caught doing something you shouldn’t have been doing.
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