Consumers Paid for Debts They Did Not Owe

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In August of 2017, the Federal Trade Commission charged a debt collection operation with taking money from consumers for debts they did not owe. The debt collectors used names that sounded like law firms, such as Cohen, Daniels & Moss. They threatened legal action and used profanity. Many people paid just to stop the harassment. If you question whether you actually owe a debt, ask the debt collector to send you information about the debt in writing.

Credit Repair Organizations Act

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In 1996, Congress passed the Credit Repair Organizations Act. Credit repair companies try to get negative information removed from your credit report, which should increase your credit score. The Act protects consumers in the following ways:
· The credit repair companies cannot misrepresent their services
· The company has to have a written contract with the consumer
· The consumer has 3 days to cancel the contract
· They cannot charge for services until the service has been done

Here is a link to the law:


Your Credit Score and Buying a Home

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What does your credit score need to be to buy a home? If your credit score is below 650, you may have trouble getting a loan. Your best interest rate is going to be if your credit score is 750 or higher. If your credit score is below 650 and you eventually want to buy a house, you should focus on improving your credit score. The process can take many months and even years.

Home Equity

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The equity in your house is the difference between the market value of your home and the amount you still owe on the home. As you keep paying on your mortgage, your equity increases. If you sell your house in the first few years after you buy it, you may not have any equity in your house. Also, if the value of your house goes down, you will have less equity in your house.

Credit Repair Companies

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You can benefit from hiring a credit repair company to fix your credit score. Having a higher credit score can help you get a lower interest rate on mortgages and loans. This can make the cost of credit repair worth it. The credit repair company should gather your information, send out letters and do follow-up. They should also be familiar with federal laws, including:

• Fair Credit Reporting Act
• Fair Debt Collection Practices Act
• Fair Credit Billing Act

Credit Freeze

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If you have had identity theft, you may want to do a credit freeze. But be careful because if you will be applying for a loan soon, the credit freeze will create obstacles. To do a credit freeze:

1. Contact each credit bureau separately and request a credit freeze.
2. You must contact each credit bureau – Equifax, TransUnion and Experian.

The freeze will remain in place until you contact each credit bureau and ask for the freeze to be removed.

Student Loan Complaints

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In its 2016 report, the Consumer Financial Protection Bureau listed complaints it received from consumers about student loans. About 2/3 of the complaints were related to the lender or servicer: making payments, getting information about the loan, managing the account. Borrowers complained that their payments were misapplied and that there was inaccurate accounting of their payments.

FICO® Score

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A FICO ® Score is a credit score that is created by the Fair Isaac Corporation. The credit score is based only on items in your credit report. The FICO ® score does not consider: your race, marital status, age, your salary, occupation, where you live. Most lenders will use your FICO ® Score when they decide if they will give you a loan. If you want good credit, try to have your FICO ® score be above 650.


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If you have been asked to co-sign on a loan, there are things to think about. How well do you know this person and why are you co-signing? If you are a parent co-signing for your child’s car or student loan, you may feel like it is for the right reasons. You are trying to make sure your child has a car to get to work or school, or to make sure they can get a college degree. But, if you are co-signing for a friend’s car loan because they have bad credit, this may not be a good reason. Do you understand that you are responsible for the full amount of the loan? This is the legal principle of joint and several liability.

Truth in Lending Act

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The Truth in Lending Act (TILA) protects you from inaccurate and unfair credit card and other lending practices. Under TILA, you have a 3 day right of rescission, so you can back out of your agreement within 3 days. The TILA also has rules related to mortgages and student loans.

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