The down economy has hurt more than just general public – banks are feeling the pinch as well. In an effort to generate extra income, they’ve become quite creative and sneaky in their tactics. We refer to these at 720CreditScore.com as banking scams. They are the ways banks “legally steal” from you month after month, most times without you even realizing it.
Whether you want to hear it or not, the truth is that the banks are in bed with the government and although the government tells the banks to “treat people fairly,” they continue to steal your money, while greedily taking money from you (via the government and your tax dollars) at the same time.
To spread the message and help people avoid these banking scams, we’re inviting everyone to share their stories of banking scams that may have happened to you. The goal is to make the public aware of what’s really going on so you can protect your hard-earned money. A few dollars here and there may not seem like much, but when you add up the thousands of accounts they are doing this to, you can see how much banks depend on these banking scams.
This is an important issue that we believe strongly about and we greatly appreciate your time in sharing your scam. If you don’t have a story to share, take a few minutes and read through the scams to make sure you don’t become a victim, or share this page with others who you think will benefit from the information.
To make it easier to find your story, if you’re sharing a scam please start your comment with the words “BANKING SCAM.”
If you have a facebook account, post this via the Facebook Comments below so we can get this message out!
In the spirit of sharing, here is one that happened to me recently.
US Bank: BANKING SCAM
If this isn’t a scam from US Bank, I’m not sure what is.
Last week I was helping my Mother in Law close out her lease with US Bank, she owed the final payment of $395, so I called to pay it.
Before they collected the payment, I told the US Bank Representative that my Mother just moved from California to Arizona eight weeks ago. She gladly took the information and then told me that she will have to charge my credit card $405 instead of $395. I asked, “Why?.”
Well, I found out that it is US Bank’s policy to charge an extra $10 fee for billing addresses in Arizona. Interesting.
Hmmm… I have clients all over the world and it doesn’t cost me extra money to charge a person’s credit card in Arizona vs. California. Even if it did, NO WAY it would be $10. And, even if I were charged extra, I wouldn’t even think about passing that on to the client.
Here I am, five days after this happened blogging about this US Bank Scam… to my entire client base. These companies need to start focusing on building more value to their clients instead of penny pinching all of us.
Here is how I got around the $10 scam. I told her to change my address back to the California address and rerun it. I told her, “If you charge me the $10 fee, I refuse to pay the bill.” She changed the address, I saved $10, and I’m not using US Bank again!
Share your Scam!!
Philip Tirone is a Credit Scoring Expert and Champion for the Human Race
Other Scam Posts:
The Retail Store Credit Card Scam – Click to Read
The Dirty Little Secret that Hurts Credit – Click to Read
Protecting Yourself from Common Bankruptcy Scams – Click to Read
Category: Credit Score
Sands Tourism Sent Me Two Scratch Off Tickets and Say I’m a Winner. Is This a Scam? – Luena
“Dear Steve,
I received an envelope thru my post office box, front of the envelope no name only our mailing address which is PO. Box etc… as I open this envelope it was promotional brochure from sandstourism on their 9th anniversary and there is a 2 scratch and win promo ticket which I scratch the first one it said “thank you” and the second ticket I scratch ” 2nd prize USD 160,000.00 so I called the number on the brochure to claim the prize.
When I’m claiming my prize they told me to scanned the promo ticket so they can verified the bar codes if its valid. they call me personally that the ticket is valid so they asked me a clients#. which I don’t have.. meaning in order for you get this client number you have be a member on this company (hondings) they are investor in Hongkong.
so they research my name if I’m one of the investor in this company which my name did not show. so they called me again telling me because I’m not a n investor i may not be qualified to get the prize they told the major prize is hold for the investor and I ask them if this ticket is hold for one of the investor why did i get this in my mail?
they answer it got mixed up when they in put the promo ticket they accident put on my box number.. so i fight for it i told them no one can claim this ticket accept for me because i have the original ticket after how many days they called me that the company decided to grant the prize to me.. the company holding called me today for verification, and read me a letter of authorization of Hongkong in short ” in order for the company to release this big amount of money need to go in court for legal documentation they asking me a security deposit $3336.04, which after I received my prize they will reimburse the $3260.04, the $100.00 is process fee. I’ve been communicating them for 1 week I called them or they will call me.
should I send them the money? what if this is a scammed? How would i find out if this is a scammed?
Luena”
Dear Luena,
No need to do any more research, it’s a scam.
They are trying to con you to put up thousands of dollars in hopes of getting a big payday. It’s an age old scam. You dangle a big prize out there and make the victim think they only have to invest X to get Y. It seems like a variation of the Nigerian Oil scam.
If you would like to report the mailing, you can file a complaint with the U.S. Postal Inspection Service online, click here.
Save your money.
Please post your responses and follow-up messages to me on this in the comments section below.
Big Hug!
@GetOutOfDebtGuy
Author: This article was contributed by GetOutOfDebt.org, a site that provides free help for people looking for advice on how to get out of debt or getting out of debt.
Source: Sands Tourism Sent Me Two Scratch Off Tickets and Say I’m a Winner. Is This a Scam? – Luena
Rebuilding Credit After Bankruptcy
Like a lot of folks who start trying to rebuild credit after bankruptcy, you might be thinking of wiping your hands clean of credit. And it might make sense that the fastest way to move past the bankruptcy is to stop relying on the loans and credit cards that precipitated the bankruptcy.
But contrary to popular belief, using credit appropriately in the wake of a bankruptcy is the best way to rebuild credit after bankruptcy. Of all the bankruptcy facts, this one might be the most important. Indeed, you might be able to build your score to 720 within a couple of years of declaring bankruptcy if you follow a smart plan to re-establish credit.
This twofold plan to learn how to fix credit starts by opening new lines of credit and concludes with paying your bills on time and in full.
Rebuilding Credit After Bankruptcy Rule #1: Open new lines of credit!
You might hear claims that you can have a bankruptcy wiped from your record. Beware of these claims! There is no legal way to wipe a bankruptcy from your credit report. That said, time does heal. The credit-scoring bureaus—Equifax, TransUnion, and Experian—are more concerned with your recent behavior than they are with your past behavior. The trick, then, is to persuade the bureaus to pay more attention to your recent good behavior than to your past behavior. By establishing new credit and using it responsibly, you can prove to the bureaus that you are a new person—that the bankruptcy forced you to change your habits and establish smarter financial strategies.
After you have declared bankruptcy, open three new credit cards (Visa, MasterCard, or American Express) and one installment loan as part of your plan to rebuild credit after bankruptcy. Taking out a car loan is not advisable, in part because of the high interest rates you would assume, but also because of the debt you would add to your credit report. Instead, buy a new appliance, piece of furniture, or electronic using an installment loan. Then pay the loan off within six months.
Keep the credit cards active by using them at least every other month. Make only small charges (preferably less than 10 percent of the limit), and pay the balances in full.
Of course, with both the credit cards and installment loan, be aware of high interest rates. Because of your bankruptcy, you will likely not qualify for the best interest rates, which is why I stress the importance of paying the balances in full as quickly as possible.
Another note about opening new accounts: Insomuch as it is possible, open these accounts all at once and as soon as possible after the bankruptcy. The credit-scoring bureaus respond best to accounts that have been open for long periods of time. Your future credit score will benefit best if you open the accounts now.
By opening these new lines of credit, you can begin to rebuild your credit after bankruptcy by giving the credit bureaus new information on which they can judge your creditworthiness. Show them you have changed your patterns of behavior.
In this way, you can immediately begin proving to the credit bureaus that the bankruptcy allowed you to turn over a new leaf and change your payment behavior.
Rebuilding Credit After Bankruptcy Rule #2: Never, never make a late payment!
After a bankruptcy, the credit-scoring bureaus will have an eye on you, even as your score begins to climb. If you make a payment that is even one day late, the bureaus will assume you are back to your old ways, and your progress will be for naught.
To best rebuild your credit after bankruptcy, you must pay your bills immediately every single month. This means that you must live within your means. Be sure to read our article about how to create a budget, find money, and establish habits that best afford you to bounce back after a bankruptcy.
The important part of improving your score fast, by 720 Credit Score
If I had to choose one thing as the most important aspect for raising your score after a financial meltdown, it would be this: Apply for new credit.
The problem is: How can you qualify when your score is low?
We generally refer people to secured cards, but even then: If you are already having financial problems, how can you afford the deposit required by secured cards?
Fortunately, our researcher, Natalie, found a new card that accepts applications for people with a score as low as 580. It’s not a secured card, so you don’t have to put any money down to qualify.
If you don’t have three cards in your name and cannot afford secured cards, you should apply for this card right away. Don’t wait, even for a day since we don’t know how long the guarantee will last.
Of course, we’ve done the research, and we believe this is one of the best subprime cards out there. It isn’t one of the 46% of cards that will hurt your score, so as long as you keep your balance low and pay your bills on time, this card will help your score increase.
Click here to apply.
What Is the Fastest Way to Build Credit?
Check Your Credit Report Limits
Credit card companies often omit or inaccurately report credit card limits, and this causes your score to drop. About half of all consumers are missing at least one credit limit on their credit reports. And in other instances, credit card companies intentionally report a lower limit than you have.
Why does this hurt your credit score?
The credit-scoring formula places a lot of weight on something called a utilization rate. The utilization rate represents your credit card balance as a percentage of your limit. If your limit is $1000 and your balance is $300, you have a 30 percent utilization rate. If your balance increases to $500, your utilization rate would increase to 50 percent. In other words, you would be utilizing 50 percent of your available limit.
The credit-scoring formula responds more favorably to people who have a utilization rate that is no higher than 30 percent. Now let’s imagine that you have a $300 balance on a credit card with a limit of $1000. Your utilization rate is 30 percent. Good news for your credit score, right?
Not so fast. If the credit card company is only reporting a $500 limit, you will appear to be carrying a 60 percent utilization rate. And this hurts your credit score. So if you want to raise your credit score fast …
1. Check your credit report and make sure that your limits are being properly reported.
2. If they are not, call your credit card companies immediately and tell them that misreporting limits is against the law. Correcting the error should cause your score to jump quickly.
Become an Authorized User
One of the first pieces of advice I give to people who have suffered severe financial crises is to become authorized users on credit cards. Authorized users are allowed to use credit cards but have no contractual obligation to pay the bills. For this reason, a person does not need to have a high credit score to qualify for authorized user status on a credit card. However, the credit card’s history will often be reported on the authorized user’s credit report, so long as the authorized user is related to the account holder.
Becoming an authorized user on a family member’s credit card will quickly raise your credit score (even after a bankruptcy or other financial disaster) by allowing you to “borrow” the account holder’s clean credit history. However, the account holder—fearful that you will rack up huge charges you cannot or will not repay—might be reluctant to add your name to his or her account. Let the account holder know that she or he can be protected.
Becoming an authorized user on a family member’s credit card will quickly raise your credit score (even after a bankruptcy or other financial disaster) by allowing you to “borrow” the account holder’s clean credit history. However, the account holder—fearful that you will rack up huge charges you cannot or will not repay—might be reluctant to add your name to his or her account. Let the account holder know that she or he can be protected.
- First, the account holder should shred the credit card that arrives for you.
- Second, the account holder should never give you the account number, credit card expiration date, or card security code.
In this way, your credit score will increase while still protecting the account holder from any irresponsible behavior on your part. Authorized users usually see a quick jump in their score. After twelve or eighteen months, you might be able to remove yourself from the account and qualify for loans on your own.
A Tip for Married People
To build your credit fast, transfer as much of your credit card debt into your spouse’s name. To do this, simply have your spouse “buy” your debt by paying your balance(s) with his or her credit card(s). Assuming you both have individual credit cards, this will cause your score to jump quickly.
You see, the credit-scoring bureaus place a lot of weight on something called a utilization rate. Each of your credit cards has a utilization rate, which is a number that describe how much of your limit you are utilizing. For instance, if a credit card has a $1000 limit and you have a $100 balance, you are utilizing 10 percent of your limit. Your utilization rate, therefore, is 10 percent.
Credit-scoring bureaus respond best if your utilization rate is below 30 percent, so if you want to learn how to fix credit, you should always lower your utilization rate.
Start by transferring balances to your spouse’s credit cards. Of course, this might lower your spouse’s credit score, but you will buy the debt back (thereby increasing your spouse’s score) once you have qualified for the loan.
In short, you will have better loan terms, and your spouse’s score will be lowered only temporarily.
A Tip for Single People
If you are single and also want to know the fastest way to build credit, you can modify this tip and use the same strategy with a family member or a loved one. However, be sure to put some structures in place so that your family member/loved one is protected. For instance, you might want to structure a proper contract by hiring a lawyer or using an online service such as Virgin Money. You might also give your family member/loved one collateral. Is your car paid off? Do you have an expensive piece of jewelry? One way or another, be sure that you never jeopardize family relationships just to raise your credit score!
Survey says consumers still confused about credit-scoring
A survey from NerdWallet and Harris Poll found that many Americans do not know the rules of credit scoring. Here are some of the findings:
- About half of Americans don’t know that having bad credit can limit their option for cell phone service, and more than half don’t know that people with poor credit will pay higher utility rates.
- Almost one-quarter of Americans in the survey didn’t know that they might be unable to rent an apartment due to poor credit.
- Nearly 45 percent didn’t know that they might pay higher car insurance premiums if their credit scores are low.
- About 41 percent erroneously think that carrying a small balance on credit cards will hurt their credit scores.
Knowing the rules of credit-scoring is important because having bad credit is expensive. You will pay higher interest rates on your credit cards and loans, as well as higher premiums on insurance, and higher deposits for utilities.
Credit-Scoring 101
Here are the basics of credit-scoring. FICO scores are calculated from data reported to credit bureaus by lenders. This information includes:
- Your payment history accounts for 35 percent of your credit score. If you are 30 days or more late on a payment, your score could drop.
- The amount of credit you use accounts for 30 percent of your score. You will have a higher credit score if your credit card balances never exceed 30 percent of your credit limit. And, as your loans age, your score will increase, assuming you pay your loans on time.
- The age of your accounts determines about 15 percent of your score. The older your accounts, the deeper your roots, and the better your score.
- Having a healthy mix of credit accounts for about 10 percent of your score. Creditors want to see that you can juggle different types of credit, so they assign better scores to people who have, at a minimum, three credit cards and an installment loan or credit rebuilder loan.
- Credit inquiries account for 10 percent of your score. Unless you are rate shopping, your score will drop a few points every time you apply for a credit card or a loan.
Correct Errors To Rebuild Your Credit Score
The first step to rebuilding your credit is getting a copy of your credit report. Yes, I know that’s an extremely simple first step, but it is an essential one. When rebuilding your credit, it is wise to review your credit report at least once every six months. If your credit score is low, you may want to pull your credit report quarterly. This won’t negatively affect your credit score. After getting your credit report, look for errors. If there aren’t any, good! You can now focus on rebuilding your credit score. If there are errors address them immediately if they are severe. In Step Five of my program, I explain that almost 80 percent of people have errors on their credit report, and 25 percent of these errors are severe enough to cause a person to lose a loan or a job opportunity. This is one reason it is essential to know what’s on your credit report. When finding an error on your credit report, what should you do? First and foremost, if you think you are a victim of identity theft, call the three credit bureaus right away to put a freeze on your credit account. This way, no one else can open credit in your name. If the mistake doesn’t seem to indicate you are a victim of identity theft, you can start by filing an online dispute at each of the three credit bureaus. Following are the three credit bureau links:
If a bank or credit card company is responsible for incorrect information on your credit report, contact them. Ask them to investigate the mistake they reported to the credit bureaus. Make sure you have documentation to support your statements. One of the most common (and dangerous) errors you will find is an inaccurate credit limit. So why does an inaccurate credit limit hurt your credit score? The credit-scoring agencies give higher credit scores to people with lower utilization rates (your credit card balance as a percentage of your limit.) If your limit is, for instance, $2,000, and your balance is $600, you have a utilization rate of 30 percent. Maintaining a 30 percent utilization rate is good. It should improve your credit score. If your credit card company is reporting your limit as $1,000 instead of $2,000, this is an error. Your utilization rate will appear to be 60 percent (a $600 balance on a $1,000 limit). This is a bad utilization rate because it may seem that you rely on credit. This will cause your credit score to drop. Notify the credit bureaus of the error on your credit limit by filing a dispute with all three credit bureaus. At the same time, place a call or send a letter to your credit card company demanding they report your correct limit. Correcting errors help rebuild your credit score. After all major errors are corrected, get another copy of your credit report to verify it is error-free. If it is, focus on rebuilding your credit to increase your credit score. FYI: Your credit score will not decrease if you get a copy of your credit report. Inquiries into your credit score by lenders will cause a dent in your score, but you are not penalized for getting your own credit report. This is considered responsible financial behavior. Therefore, get your credit report as often as you desire to check for errors and/or to rebuild your credit score.
What You Should Know Before Closing Credit Card Accounts
After learning the difference between traditional, secured, subprime, retail and major credit cards, you may want to close one or more of your credit cards, especially if you have more than five. If that’s your only solution to increasing your credit score, learn more about the credit process before closing an account.
Most credit scoring systems award a higher credit score to those who have no more than five credit cards. Before rushing to close an account, know the impact it will have on your credit score.
Here are a few basics about owning credit cards.
Fifteen percent of your credit score comes from the age of your credit accounts. The older your credit accounts are, the better it is for your credit score. Credit scoring systems consider the average age of your accounts. If possible, never close older accounts. If you do, you will drive down the average age of your accounts which will decrease your credit score.
Closing a credit card account may also affect your utilization rate. “Utilization rate” is the ratio of your credit card balance against your credit limit, expressed as a percentage. For example, if you charge $800 on a credit card with a credit limit of $2,000, your utilization rate is 40 percent. Credit-scoring bureaus reward people who have utilization rates below 30 percent. If you want to be rewarded by the credit scoring bureaus, always keep your utilization rate under 30 percent.
How does closing credit card accounts impact your utilization rate? If you transfer the balance on the account you want to close to another account, consider this first. If you decide to cancel a credit card and transfer the remaining debt to another card, you may cause the utilization rate on the second card to rise sharply. This may cause your credit score to drop.
Leaving a balance on your card after canceling the account is worse than transferring a balance because you won’t have a credit limit to offset the balance owed. For example: If you leave a $700 balance on the canceled card, your utilization rate will suffer dramatically since the limit on the card will be $0.
Develop a strategy to increase your credit score when you have more than five credit cards. Your best bet is to keep all of them active but pay them off every month. This is achieved with a budget. Plan which expenses you will pay with credit cards.
A steady history of payments will demonstrate to credit-scoring bureaus your ability to manage your accounts and will eventually improve your credit score. Pay special attention to the cards with the highest limits, oldest ages, and best interest rates. Be sure to keep these cards active, maintaining a utilization rate below 30 percent.
Retail credit cards, cards which can only be used at the designated company on the card, are an exception to the “keep-them-open” rule. There is no reason to purchase monthly from these stores. Letting a retail account go inactive may not be the ideal choice, but it should not be a cause for alarm unless it causes your credit score to drop. If that happens, call the retail store and to see if you can reactivate the card.
How Divorce Impacts Your Credit
Divorce statistics do not reflect a “happily ever after” marriage for the majority of couples. When you realize there’s a possibility your marriage may end, take action to protect your credit.
When taking inventory of all assets, please remember to include all jointly held credit cards, auto loans, and mortgages. This may seem insignificant, but it will certainly affect your credit score after you’re divorced. Learning to build credit means you must also learn how divorce can impact your credit.
If you and your partner kept all credit separate during your marriage, your credit score will not be impacted by your ex-spouse’s credit behavior at any time before, during, or after your marriage. However, if your spouse is an authorized user or joint holder of a credit card, an angry former spouse may attempt to create financial havoc in your life by charging on jointly held credit cards without making a payment.
All debt incurred on jointly held cards are the responsibility of you and your ex-spouse. Therefore your ex-spouse’s financial decisions impact your credit score after divorce. For example, your ex-spouse’s late payments and collection notices will be on your credit report after your divorce if you do not separate the accounts.
Before the divorce, you should cancel all jointly held credit cards. This eliminates any chance of a negative impact on your credit report from your ex-spouse’s financial mismanagement. Some credit card companies may require a special type of notice to cancel jointly held cards, such as a written notice. Doing this as soon as possible is in your best interest in terms of divorce and credit. After a divorce, your ex-spouse may need to charge many things to make up for reduced income. Even if your ex is not being malicious, this could harm your credit score by causing your utilization rate (the balance as a percentage of the credit card limit) on jointly held credit cards to increase.
Credit cards aren’t your only consideration in a divorce. Don’t forget your mortgage. If you and your ex-spouse own a home together, both of you are responsible for the debt, unless you have worked out another arrangement. If you choose not to sell, refinance. Use a quitclaim deed to take your name off the title of the property. But don’t stop there! Your ex must also refinance. If not, your credit score will decrease if he or she becomes delinquent on payments.
If you retain ownership of your home and do not put the property in your name, you have not fully protected yourself. If your ex-spouse is sued, the house might be seized to pay off your ex-spouse’s debts.
Are you separated? No problem. Here are a few steps to prepare for an eventual divorce. Pull your credit report and assess your financial situation, noting all existing credit accounts. Keep copies of everything in a safe place. If you have joint accounts, have a discussion with your spouse about who will assume payments for which credit accounts.
If you are on peaceful terms with your spouse, have a frank discussion about the impact of divorce on your credit. Both of you need to protect yourselves. Consult an attorney. Create the best possible plan to keep your payments on schedule to protect your credit.
To reduce the negative impact of divorce on your credit, cancel all joint accounts and contact the three credit bureaus to update your address information.
Becoming an Authorized User Quickly Increase Your Credit Score
The easiest and fastest way to increase your credit score is to become an authorized user on a family member’s credit card account.
This is an excellent strategy for teen children or people who have suffered a severe financial crisis. Both are interested in building or rebuilding their credit. As an authorized user, they receive the benefits of someone else’s credit but have no contractual obligation to pay the bills.
A person’s individual credit score is not considered when becoming an authorized user. Neither is his or her credit report reviewed. There is no pre-qualification for an authorized user status on a credit card. However, the credit card’s history will be reported on the authorized user’s credit report as long as the authorized user is related to the account holder.
Becoming an authorized user on a family member’s credit card will quickly raise your credit score, even after bankruptcy or other financial disaster, by allowing you to “borrow” the account holder’s clean credit history.
Family members may not be receptive to adding you to their credit card accounts if they believe you will not honor your commitment to repay the charges you make. You must assure them of your ability to re-pay. Show them how you will repay charges or tell them you do not want a credit card or access to their account. Your goal is to become an authorized user to increase your credit score.
To protect the family member adding you as an authorized user, here are two suggestions:
- The account holder should shred the credit card that arrives in your name.
- The account holder should never give you the account number, credit card expiration date, or card security code.
Both of you will then benefit. How? Your credit score will increase because you have a good credit report. The account holder benefits because he or she is able to help a family member without worrying about irresponsible behavior on your part.
Authorized users must be related to the account holder for their bad credit scores to benefit from this strategy. Try to choose someone with the same last name and address. Otherwise, the credit-scoring bureaus might not recognize your status as an authorized user and your credit score might not improve.
Call the credit card company and ask if they are reporting your status as an authorized user. You can also check your credit report to see if the account is appearing. If not, choose another account holder.
Be sure that you also choose a responsible relative with an account in good standing. If you become an authorized user on an account that becomes delinquent, guess what happens? Your score will drop. Therefore, pick an account with a clean history of payments and a utilization rate of no more than the 30 percent limit. If the balance exceeds 30 percent, or if the account holder makes a late payment, you should immediately remove your name as an authorized user so the negative information does not hurt your credit score.
Authorized users usually see a quick jump in their score. In twelve or eighteen months remove yourself from the account because you should be able to qualify for loans on your own.
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