I just talked with one of my former clients who told me she is trying to get her Wells Fargo home loan modified. She has been very cooperative - a study in opposites from how the company has treated her.  She said the last round ended with her loan modification being denied because all of the paperwork she sent - every single page - hadn’t been signed and dated.  Never had they told her to do that.  She has finally hired attorneys to help her through the process because the company seems to be stalling in order to turn her down.  In the end, they will have a full year of every paycheck stub and bank statements.  Is that really necessary?

Meanwhile, the process has decimated her credit score.  She had a conversation with Equifax, though, and that representative told her that credit scores are tanking throughout the country by nearly everyone.  So good luck in getting a new loan, which seem to be highly desirable right now according to MSNBC,

For homeowners who qualify, it’s a good time to refinance. The average rate on a 30-year fixed rate mortgage dipped this week to the lowest rate of the year — 4.84 percent, down from 4.93 percent a week earlier. Homeowners who took out adjustable-rate loans at 4.5 percent in 2005 are now seeing their rates fall to 3 percent to 3.25 percent, McBride says. As a result, they have extra cash to spend.

I’d rather see the economy in a strong, steady recovery, frankly.

For most folks, the idea of reading a credit report isn’t all that appealing and it’s made even less desirable through the steps you have to complete just to get your hands on it.

I signed up for a free credit report a few years ago and after jumping through several hoops, finally had the massive document ready to print.  I was deeply disappointed then to see that while all my credit pluses (and one or two minuses) were there, no score was to be found anywhere.  That’s where they get you… you get your report FREE but have to PAY for the score.  Ay yi yi…

The Federal Trade Commission offers some great advice on how you can obtain your credit report and credit score here, but here are the details that get to the heart of it:

To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on the back of this brochure; or you can print it from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You are entitled to get a free report each year.  Beware of sites that try to charge you for them if you don’t cancel after a certain amount of time.  And remember, no one else can get it unless you give them permission (which many employers do, as well as anyone you want a loan from, e.g., credit card companies, car loans, etc.).

Trying to repay credit card debt can be devastating, especially when the debt amount is so high that you never get in front of it when making the minimum payments.

Growing up, I always heard you should have one credit card in case of emergency.  My parents were talking about having them if you were on a trip and your radiator went out, for example.  Unfortunately with the economy today, paying the power bill to keep the house full of kids warm during the winter has become the new emergency.

As a result, more and more people are suffocating under credit card debt and the relentless collection companies calling sometimes a dozen times a day to collect.  It’s no wonder that people keep it a secret and many people do, according to CNN Money.com,

Hidden debt is a common and insidious problem. “It’s a form of cheating so subtle you don’t even know you’re doing it,” said Bonnie Eaker Weil, a relationship expert and author of the book Financial Infidelity. “It’s a power struggle that can be more harmful to a relationship than adultery.”

I’ve reached the point in my own life that when I get an envelope in the mail promising me a silver, platinum or gold card with no interest payment for a year, I just put it in the shredder.  Sometimes enough is enough.

Photo by squeaky marmot via flickr creative commons.

When people lose their homes, the dark times in their lives can eventually be overcome.  By hard work, attention to bills, and saving when possible, a good credit score can be rebuilt.  However, what people are only now realizing is a bad credit score doesn’t just prevent you from buying a home.  Now low scores can prevent affordable purchases, dictate that you’ll live somewhere bad, and even stop you from getting a job.

Let’s say you need a car to get back and forth to work.  A low score doesn’t necessarily mean you CAN’T buy one, it means that you’ll pay out the nose on your higher interest rate.

A low credit score and foreclosure will also be found if you’re renting an apartment or house.  Savvy landlords check your payment history because they don’t want to become another statistic on your list of nonpayments.

What’s even worse - in my opinion - is that now employers check those scores, too.  MSNBC.com reports that bad credit can become a barrier to finding a job,

There are no hard numbers on how often poor credit reports thwart someone’s effort to find a new job. Many applicants will never know; employers aren’t required to explain why a candidate was turned down for a job.

But a recent survey by the Society of Human Resource Management found that many employers use credit checks to screen job candidates. Of the roughly 350 employers who responded, 60 percent said they checked credit histories for some or all job applicants. That’s up from 43 percent in 2004 and just 25 percent in 1998.

A friend of mine just lost out on a job because of her credit score.  She has worked for me in the past so I know from personal experience that she is smart, dedicated, and relentless in getting the job done.  I’m sorry she won’t have the chance to prove this to the other would-be employer.

When I read the article at CNN Money, I felt pretty good about it:  “No More Retroactive Credit-Card Rate Hikes” … sounds great, right?!  New rules for these companies that squeeze every drop of blood out of those of us who are foolish enough to use the cards (Yes, me. Probably you, too).

Then I read it again.  RETROACTIVE credit card rate hikes?  Say what?  Credit card companies were able to retroactively change your rates for purchases already made?  This is outrageous!  I guess it’s good news, then, that the practice is being put to a stop.

Also changing are random billing dates - they will now have to be billed at the same time every month.  In addition, the due date TIMES will conform to one time.  For example, one bill could be due at 1:00 p.m. EST on the 15th of the month, while another could cut it off at 2:33 p.m.  Ignorance on my part is not bliss… I had always been under the assumption that as long as something was postmarked by the day it was due, you were in the clear.

Personal finance editor Gerri Willis writes,

And although 45-days notice is required before making any changes under the new law, your card can still be closed or your limit lowered without your input.

Also watch out for fees! With credit-card companies trying to replace lost revenue, fees are everywhere. There are NO restrictions on the types of fees that credit-card issuers can charge, from dormancy fees to annual fees, and even fees to receive a paper statement.

She is right - READ EVERYTHING you get from your credit card company.

Even though I don’t use American Express, this commercial featuring Wes Anderson made me laugh.

Happy Friday!

This is a fairly old MasterCard Debit commercial, featuring MacGyver. I loved it, though. Always a classic…

Happy Friday!

In these times, where economic uncertainty remains even as some evidence of improvement has appeared, many people are wondering whether or not bankruptcy is the answer. In some cases, there really is nothing left that can be done. In other cases, though, there are still steps that can be taken to avoid bankruptcy. Before you make the decision, though, it is a good idea to understand these 3 bankruptcy myths:

1. All of your debts will be cleared

Many people think that bankruptcy is a “get out of debt free” card, allowing them to zero out their debt. However, it doesn’t exactly work that way. Some debt is not eligible for being cleared under bankruptcy, and in some cases you will have to repay at least a portion of what you owe.

2. You will lose your home

It is only in the rarest of cases that a person loses his or her home as a result of bankruptcy. In most cases, you cannot be ordered to sell your home to pay your debts. However, if you have stopped making your mortgage payments, your lender can foreclose on your home. But that is something different.

3. You can’t get credit after a bankruptcy

Many people believe that once they declare bankruptcy, they will not get credit in the future. While they may have a tougher time, the fact is that it doesn’t mean you won’t get credit. You will have to rebuild your history, and bankruptcy will remain for 7 - 10 years, but if you work hard to rebuild your credit, you can usually buy a home within 3 - 4 years after a bankruptcy.

It is also worth noting that you cannot be fired due to your bankruptcy. So, before you decide for or against bankruptcy, consult a professional, and consider whether or not one of these myths is influencing your decision.

I really enjoyed this MasterCard “priceless” commercial that features Peyton manning giving everyone crappy gifts. Made me laugh.

Happy Friday!

Even though I don’t use American Express, I really enjoyed this commercial with the smiley faces. I thought it was clever, the way that they took ordinary objects and made them look sad or happy.

Happy Friday!