The document provides information about credit scores, credit bureaus, collections practices, and identity theft. It discusses how credit scores are calculated, what credit reports contain, and strategies for dealing with inaccurate credit information and collectors. Key points include that credit scores measure debt repayment rather than financial success, consumers should regularly check their credit reports for errors, and establishing a pro rata payment plan can help when unable to pay all minimums due.
The document provides information about credit scores, credit bureaus, collections practices, and identity theft. It discusses how credit scores are calculated, what credit reports contain, and strategies for dealing with inaccurate credit information and collectors. Key points include that credit scores measure debt repayment rather than financial success, consumers should regularly check their credit reports for errors, and establishing a pro rata payment plan can help when unable to pay all minimums due.
Original Description:
Sharks are quite literally in credit cards. Don't use them with help from this document.
The document provides information about credit scores, credit bureaus, collections practices, and identity theft. It discusses how credit scores are calculated, what credit reports contain, and strategies for dealing with inaccurate credit information and collectors. Key points include that credit scores measure debt repayment rather than financial success, consumers should regularly check their credit reports for errors, and establishing a pro rata payment plan can help when unable to pay all minimums due.
The document provides information about credit scores, credit bureaus, collections practices, and identity theft. It discusses how credit scores are calculated, what credit reports contain, and strategies for dealing with inaccurate credit information and collectors. Key points include that credit scores measure debt repayment rather than financial success, consumers should regularly check their credit reports for errors, and establishing a pro rata payment plan can help when unable to pay all minimums due.
We live in a culture that bows down and worships at the altar of the almighty credit score, and it seems like well do anything to protect that little number. But what does the credit score really mean? What does it measure? The answer will surprise you! In Credit Sharks In Suits, Dave shows you exactly how the credit score is calculated and what it actually says about you. He will also walk you through common collection practices and strategies for dealing with collectors. Even if you never face these nagging calls yourself, chances are someone you love will!
Credit Score FICO stands for Fair Isaac Corporation, which developed a scorebased rating system that many companies use to measure an individuals credit risk.
MYTH:
You need to take out a credit card or car loan to
build up your
TRUTH:
The FICO score is an I love
is not a measure of
While this measurement
has become widely accepted, it is a faulty standard that is based on debt, not wealth.
. score and financially.
Credit Bureaus Account information is removed from your credit report
years after the last activity on that account,
except for a Chapter 7 bankruptcy, which stays on for
years. Beware of credit clean-up scams. The only information that may be legally removed from a credit report is information.
Credit Sharks In Suits
The National Association of State Public Interest Research
Groups (U.S. PIRG) did a survey of 200 adults in 30 states who checked their credit report for accuracy. They discovered:
% of those credit reports contained mistakes of
some kind and
% of them contained errors serious
enough to result in the denial of credit.
% of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open. % listed the same mortgage or loan twice. You should check your credit report
which you can now do for free.
your credit Get a free copy of of the three report from each encies at credit reporting ag .com. annualcreditreport
Identity Theft What to Do: 1. Place a
alert on your credit bureau
report (stays on for 90 days without a police report).
2. Get a 3. Remember, this is should pay
. . You owe .
4. Contact the fraud victim
and furnish 5. Be now have a new
and
Of all the identity theft
victims who call in to The Dave Ramsey Show for help and advice on this subject, approximately one-half know the person who stole their identities. The thief is often a friend or a family member.
of each creditor .
this will take some time. You
.
Credit Sharks In Suits
Correcting Credit Report Inaccuracies
To clean your credit report of inaccurate information, you should write a separate letter for each inaccuracy, staple a copy of your credit report to each letter, and circle the account number.
An updated version of the 1977 Federal Fair Credit
Reporting Act requires a credit bureau to all inaccuracies within 30 days of notification of such inaccuracies. You should also request that inquiries be removed. All of these letters should be sent
mail
with return receipt requested to prove when they
receive the letter. If the credit bureau does not prove the accuracy of the assertive You will have to be period! after the 30-day
account within 30 days, you should request they remove
the Lodge any
account from your file.
with the Federal Trade
Commission and your states Consumer Affairs Division.
Credit Sharks In Suits
Collection Practices The best way to pay debts is with a
A collectors job is not to help your overall situation.
His only job is to get your
tor sounds like
Even if a collec hes not. He hes your buddy, , and hell money just wants your get it! say anything to
Collectors are trained
or
They are typically low-paid positions with high
. They are taught in their training to evoke strong . The way to counteract this technique is to ALWAYS pay
first, and then
Your first priorities
should always be the Four Walls: food, shelter and utilities, clothing and transportation.
set
the order of payment.
Credit Sharks In Suits
Federal Fair Debt Collection Practices Act
In 1977, a consumer law was passed by Congress called the Federal Fair Debt Collection Practices Act to protect you from unfair collectors. The law technically only applies to collection agencies (not your creditor), but later court cases make most creditors also abide by the FFDCPA.
The Act states that harassment is illegal, and restricts a
collectors calls between the hours of
and
(unless they have your permission).
The Act also allows you to demand that a creditor cease calling you at
. You should request this in writing
by certified mail with return receipt requested.
The Act even allows you to insist that a creditor stop contact except to notify you of
proceedings.
Do not use a cease-and-desist letter except in horrible
situations, because all
stop and any
hope of a positive resolution is lost.
to heyre going t ou y ll e t y If the a credit ycheck over take your pa t, theyre lying. deb card or car court ens after a p p a h ly on t ely Tha youll definit order, which . e advanc know about in
No collector or creditor may
(attach)
a bank account or garnish
without proper and lengthy court action,
except in the case of delinquent IRS or student loan debt. All
such threats are a bluff.
Pro Rata Plan
Your plan should include as much prompt repayment of debt as possible, but YOU must set your priorities of repayment. Do NOT let a collector use your credit report as a . When you are unable to pay the minimum payments, use the
Credit Sharks In Suits
plan.
Pro Rata Debt List
The best way to beat debt is with a calculated formula! Go!
3,361 3,161
Household Income Necessity Expense
Dont include consumer
debt payments
total Debt total Min. Payments
2,000 310 Add up all your minimum payments & enter here
200
Disposable Income =
Add up the total debt
column & enter total here
Use the formula below
to find your new payment
iteM
J.C. Penney Sears MBNA Visa CitiBank Visa Discover
paYoFF
100 200 200 300 1,200
total debt = percent x disp. inc.
2,000 2,000 2,000 2,000 2,000
5% (.05) 10% (.10) 10% (.10) 15% (.15) 60% (.60)
200 200 200 200 200
= neW pMt.
10 20 20 30 120
Sign in to FPU Central at daveramsey.com to download this form and explore our other online budgeting tools!
Lawsuits Typically, lawsuits for under
are filed in
General Sessions Court (or small claims court), which is
a fairly informal proceeding. are making Eventually, if you ve cut no no payments and ha sued. deals, you will get
Before you are sued, you will be served by the local
sheriffs department and typically given
days
notice of the court date.
In court, if the debt is valid, even if you fight, you will . From that date you will generally have 30 days before the
becomes final and
garnishments or attachments begin.
At ANY TIME during the process, you may settle with Make sure that any settlement offer from a creditor is in writing, and never give them electronic access to your account. If they wont put it in writing or accept the payment by check, you really do not have a deal.
Credit Sharks In Suits
the creditor or their attorney in writing. If you are not
able to reach an agreement, you can file with the court a
some states.
motion, called a paupers oath in
be proactive! To stop receiving unsolicited telemarketing phone calls and direct mail marketing (including preapproved credit offers), check out these free, trusted resources: Prescreening Opt Out www.optoutprescreen.com National Do Not Call Registry www.donotcall.gov Direct Marketing Association www.dmachoice.org
One-Minute Takeaway What jumped out at you in this lesson? How can this affect your story?
Plan Money Salespeople Telemarketers Turnover Emotion Necessities You 8:00 a.m. 9:00 p.m. Work All Lawsuit Negotiations Take Wages Paper Club Pro Rata $10,000 10 Lose Judgment Slow Pay
Questions for Reflection
Personal finance is 20% head knowledge and 80% behavior. Take charge of your financial behaviors by thinking through the questions below.
What is your reaction to the statement, The FICO score is not a
measure of winning financially? How is this contrary to what you have always believed or been taught?
Why do we say the credit score is actually an I love debt score?
What are some practical ways you can defend yourself against identity theft? What do you need to remember if you become a victim?
In what way is emotion a collectors best weapon?
Why is it important to make the Four Walls (food, shelter and
utilities, clothing and transportation) a priority when dealing with bill collectors?
Reading Assignment: Read the Credit Sharks in Suits chapter in
Dave Ramseys Complete Guide to Money.
10
Credit Sharks In Suits
Request For File Disclosure Form
REQUEST FOR FILE DISCLOSURE
CREDIT BUREAU OF NASHVILLE 604 FOURTH AVE NORTH - P.O. BOX 190589 - NASHVILLE, TN 37219-0589 Reason for File Disclosure Request ____________________________________________ Referred by ___________________________________ Was credit refused? yes no I hereby request the Credit Bureau of Nashville to disclose to me the contents of my credit record. I understand that if I have been rejected for credit within the past sixty (60) days as the result of credit information contained in my credit record, there will be NO CHARGE for this disclosure, otherwise there will be an $8 charge for an individual disclosure or $10 for both myself and my spouse. Name _____________________________________________________________ Phone No. ____________________________ Spouses Name ____________________________________________________________________________________________ Present Address ___________________________________________________________________________________________ City ___________________________________________, State ___________________Zip Code ________________________ Former Address ___________________________________________________________________________________________ City __________________________________________, State ___________________Zip Code _________________________ Date of Birth ____________________________________ Social Security No. ___________________________________ Employed By _______________________________________________________________________________________________ How Long? _________________________ Position ____________________________________________________________ Former Employment _____________________________________________________________________________________ Spouses Date of Birth ___________________________ Social Security No. ________________________________ Spouses Employment ___________________________________________________________________________________ How Long? _________________________ Position ____________________________________________________________
I hereby authorize the Credit Bureau of Nashville to review my credit record with me, to make any necessary investigation of my credit transactions and to furnish to its subscribers reports based thereon. In consideration of its undertaking to make such an investigation I authorize any business or organization to give full information and records about me. I am the person named above and I understand that federal law provides that a person who obtains information from a consumer reporting agency under false pretenses shall be fined not more than $5,000 or imprisoned no more than one year or both. Signed ___________________________________________________ Date __________________ Telephone Number ________________ Ext _________ where I can be reached during normal working hours.
AUTHORIZATION FOR DISCLOSURE OF SPOUSES CREDIT RECORD
I, ____________________, certify that I am presently married to ____________________, and am acting in his/her behalf in reviewing the credit record information concerning him/her maintained by the Credit Bureau of Nashville.
Credit Sharks In Suits
11
Sample Removal Letter
Date ________________________ (From) _______________________________ _______________________________ _______________________________ VIA: Certified Mail, Return Receipt Requested (To) Mail Preference Service Direct Marketing Association P.O. Box 643 Carmel, NY 10512 RE: Unauthorized direct marketing and pre-approved credit card offers
This letter is your formal notice to remove my name from all direct marketing and pre-screening databases. I do not wish to receive any unsolicited offers, especially from credit card companies. Not only do I request that my name be permanently removed, but I also request that my phone number and address must likewise be permanently removed. My correct information is as follows:
(Complete Name) (Full Address) (Phone Number with Area Code)
Thank you for your immediate attention to this matter.
Sincerely,
____________________________ (Signature)
12
Credit Sharks In Suits
Sample Cease and Desist Letter
Date __________________________ (From) _______________________________ _______________________________ _______________________________ VIA: Certified Mail, Return Receipt Requested (To) _______________________________ _______________________________ _______________________________ RE: _________________________________ Dear ____________________, You are hereby notified under provisions of Public Law 95-109, Section 805-C, the FAIR DEBT COLLECTION PRACTICES ACT to CEASE AND DESIST in any and all attempts to collect the above debt. Your failure to do so WILL result in charges being filed against you with the state and federal regulatory agencies empowered with enforcement. Please be further warned that if ANY derogatory information is placed on any credit reports after receipt of this notice, that too will result in action being taken against you. PLEASE GIVE THIS MATTER YOUR IMMEDIATE ATTENTION. Sincerely, ______________________________ (Signature)
In reviewing the attached credit bureau report issued by your agency, I have detected an error. The following account(s) is/are reported inaccurately:
Company Name:_____________________________________ Account Number: ___________________________________ Under the provisions of the 1977 Federal Fair Credit Reporting Act, I hereby request that your agency prove to me in writing the accuracy of the reporting of this account. Under the terms of the Act and succeeding court cases, you have 30 days to prove such accuracy or remove the account entirely from my report. I ask that you do so. This letter was sent certified mail, return receipt requested. I expect a response within the 30-day period. Should I not hear promptly from you, I will follow up with whatever action necessary to cause my report to be corrected. Please feel free to call me if you have any questions. My home phone number is _________________, and my office number is _________________.
Sincerely,
____________________________ (Signature)
14
Credit Sharks In Suits
Sample Creditor Letter
Date __________________________
(From) ______________________________ ______________________________ ______________________________ (To) ______________________________ ______________________________ ______________________________ RE: ___________________________ Dear _______________________, I am writing to formally request that, in accordance with the 1977 Federal Fair Debt Collection Practices Act, your firm (or any agency hired by your firm) no longer contact me at my place of employment, __________________________. Please take note that this letter was mailed certified mail, return receipt requested, so that I will have proof that you are in receipt of this letter should legal action against you become necessary. I am willing to pay the debt I owe you, and I will be in touch soon to work out arrangements. Feel free to contact me at my home between ___________ a.m. and _________ p.m. at the following number: ______________________, or by mail at my home address: ____________________________________________________________________. Please give this matter your immediate attention.
Sincerely,
_________________________ (Signature)
Credit Sharks In Suits
15
Sample Pro Rata Plan Letter
Date __________________________
(From) ______________________________ ______________________________ ______________________________ (To) ______________________________ ______________________________ ______________________________ Re: Joe and Suzie Public # 1234-5678-9012-9999
Dear Collection Manager:
Recently I lost my job. My wife is employed in a clerical position. We have met with a financial counselor to assess our present situation. We acknowledge our indebtedness to you of $6,000 and fully intend to pay you back in full. However, you are one of six creditors to whom we owe a total of $42,968. We owe minimum payments of $782 each month. We are not able to meet these minimum payments at the present time, and we will not go further into debt to meet these obligations. We have put together a cash flow plan based on our take-home pay of $2,340 per month (see the enclosed copy of cash flow plan). Since we have two small children and no disposable income, we cannot make a payment to you at the present time, but we do not intend to go bankrupt. We are asking for a moratorium on payments for the next 120 days. We will keep in close contact with you, and as soon as possible, we will begin making payments. If possible, we further request a reduction in interest during this time. We are aware that this is an inconvenience to you, but we must meet the basic needs of our family first. We fully intend to pay our creditors all that we owe them. Please be patient with us. If you have any questions please contact us at 600-555-9876. Thank you for your consideration of our present situation.
