Ch 8: Credit Bureaus
You should check your credit report ______, which you can do for free
annually
The FFDCPA allows you to insist a creditor stop all contact except to notify you of lawsuit proceedings. This is called a
cease-and-desist letter Dave does not recommend you do this except in extreme circumstances because it will activate a lawsuit
When you request inquires to be removed, the letters should be sent
certified mail with return receipt requested to prove when they receive the letter
Collectors are taught in their training to evoke strong
emotion
If the credit bureau does not prove the accuracy of the account within 30 days, request that they remove the
entire account from your file
Beware of credit clean-up scams. The only information that may be legally removed from a credit report is ________ information
inaccurate
The only information that can be legally removed from your credit bureau report is
inaccurate information
In court, if the debt is valid, even if you fight, you will
lose
A collectors job is not to help your overall situation. His only job is to get your
money
Always pay your _______ first, and then you set the order of payments
necessities
You need to personally check your credit report at least
once a year
What is a pro rata plan
"Pro rata" means the fair share, or the percent of your total debt each creditor represents
____% listed the same mortgage or loan twice
*22%* listed the same mortgage or loan twice
______% contained errors serious enough to result in denial of credit
*25%* contained errors serious enough to result in denial of credit
____% of the credit reports contained credit accounts that has been closed by the consumer but incorrectly remained listed as open
*30%* of the credit reports contained credit accounts that has been closed by the consumer but incorrectly remained listed as open
_____% of credit reports contain mistakes
*79%* of credit reports contain mistakes
It is a good idea to check your credit report: A. You don't need to if you've never used debt B. Every year C. Every three years D. Every five years
B. Every year
Which piece of information, if stolen, is not likely to lead to identity theft A. Drivers license B. Library card C. Credit card number D. Social Security number
B. Library card
Which of the following is one of the Four Walls A. Cable television B. Rent payment C. Cell phone bill D. Designer jeans
B. Rent payment
Passed in 1977 to protect you from unfair collectors A. FDIC B. FHA C. FFDCPA D. FFCRA
C. FFDCPA
Chapter 13 bankruptcy
Chapter of the bankruptcy code providing for an individual to repay debts over time, usually three to five years. Debtor makes periodic payments to the bankruptcy trustee, who in turn pays the creditors. Sometime includes adjustment to debt balances within the bankruptcy
Chapter 7 bankruptcy
Chapter of the bankruptcy code providing for liquidation of the debtor's assets in order to repay the creditors. Certain assets or aggregate value assets of the debtor may be exempt based on state law
Trained salespeople or telemarketers
Collectors
TransUnion
Credit bureau
Chapter 11 bankruptcy
Reorganization bankruptcy, usually involving a corporation or partnership. Generally includes a plan of reorganization to keep a business alive and pay creditors over time
An updated version of the 1977 Federal Fair Credit Reporting Act (FFCRA) requires a credit bureau to remove all inaccuracies within ______ days of notification of such inaccuracies
30
From that date, you will generally have ______ days before the judgement becomes final and garnishment or attachments beings
30
Fraud
A seller's intentional deception of a buyer, which is illegal
Which of the following is not a factor in determining your FICO score A. Paying cash for all purchases B. Getting a personal loan from the bank C. Using credit cards D. All of the above
A. Paying cash for all purchases
Account information is removed from your credit report _____ years after the last activity on the account, except for a Chapter 7 bankruptcy, which stays on for ______ years
Account information is removed from your credit report *7* years after the last activity on the account, except for a Chapter 7 bankruptcy, which stays on for *10* years
Disposable Income
Amount of money left over after all necessities and expenses are paid
Do not use cease-and-desist letter except in horrible situations because
all negotiations stop and any hope of a positive resolution is lost
Identity theft is the fasted growing ______ crime in north america
white collar
The FFDCPA allows you to demand that a creditor cease calling you at
work You should request this in writing by certified mail with return receipt requested
T/F The Federal Fair Debt Collection Practices Act allows creditors to call between 7am and 10pm
F. between 8am and 9pm
Using another person's information to obtain goods or services
Identity theft
Credit Bureau
An agency which collects the credit history of consumers so that creditors can make decisions about granting loans
In order for a FICO score to be calculated
1. A report must contain at least one account which has been opened for six months or more 2. No indication of being deceased
By law you are entitled to a free copy of your credit report once a year from *each* of the three credit reporting agencies. What are these agencies
1. Experian 2. TransUnion 3. Equifax
The three credit bureaus are
1. Experian 2. TransUnion 3. Equifax
What are the Four Walls
1. Food 2. Shelter 3. Clothing 4. Transportation
How to settle a debt
1. Get it in writing 2. Never give electronic access to your account 3. Don't give post-dated checks 4. Pay with cashiers check
Identity theft: What to do
1. Place a fraud victim alert of your credit bureau report (stays on 90 days without a police record) 2. Get a police report (80% of identities are stolen by people you know) 3. Remember this is a theft. You owe nothings and should pay nothing 4. Contact the fraud victim division of each creditor and furnish documentation 5. Be persistent, this will take some time. You now have a new hobby.
List actions to take when your identity has been compromised
1. Place a fraud-victim alert on your credit report 2. Get a police report 3. Remember you owe nothing and should pay nothing 4. Contact the fraud victims division of each creditor and furnish documentation 5. Be persistent, this will take some time
Steps to clear up your credit report of inaccurate information
1. Write a separate letter for each inaccuracy 2. Staple a copy of your credit report to each letter 3. Circle the account number
Before you are sued, you will be served by the local sheriff's department and typically given
10 days notice of the court date
Chapter 7 bankruptcy stays on your record for
10 years
Harassment is illegal and restricts a collector's calls between the hours of
8am and 9pm (unless they have your permission) Has to be your time zone, not theirs
Credit Score
A calculated score that measures an individual's creditworthiness; the two main types of credit scores are the FICO score and the VantageScore
Describe the value of credit reports
A credit report is a detailed history of how you've used debt. Ideally you want to avoid using debt, which results in a non-existent credit report. Even if you don't have a history of using debt, you should still check your credit report annually to make sure your identity has not been compromised
Refute the myth of building a credit score
A credit score is a "I love debt" score and is not a measure of financial success. The only reason you "need" a credit score is to help you secure a large loan in the future, which defeats the purpose of avoiding debt. Rest assured, everything you "need" a credit score for can be done without having one. Ultimately the smartest decision is to have a non-existent credit score (a zero credit score)
Credit Report
A documents showing your credit history, credit inquires, and facts about any accounts you have opened with individual credit lines and on-time or late payment activities
Bankruptcy
A legal procedure for dealing with debt problems of individuals and businesses; specifically a legal court case filed under one of the chapters of Title 11 of the United States Code
Who are scum/the worst collector when it comes to debt collection
Credit card collectors
The Pro rata plan includes which of the following elements A. Repayment of debt as soon as possible B. Using the Four Walls to set priorities C. Giving a percentage of debt to each creditor D. All of the above
D. All of the above
Which of the following tactics are collectors likely to use A. Lying B. Harassment C. Being friendly D. All of the above
D. All of the above
T/F You need to take out a credit card or car loan to build up your credit score
F
T/F Your should always pay the collectors first
F
T/F The credit score is a measure of winning financially
F. It is a measure of debt
T/F A collector or creditor may take a bank account or garnish wages
F. Not without proper and lengthy court action except in the case of delinquent IRS or student loan debt
T/F If you are a victim of identify theft, you are only responsible for the first $250 of debt
F. You are responsible for nothing
"I love debt" score
FICO score
FICO stands for
Fair Isaac Corporation
Lodge any complaints of the credit bureau with the
Federal Trade Commission and your state's Consumer Affairs Division
Fair Debt Collection Practice Act (FDCPA)
Federal law that prohibits unfair debt collection practices, such as lying, harassing, misleading and otherwise abusing debtors, by debt collectors working for collection agencies Protects consumers from illegal collection practices
Federal Fair Debt Collections Act (FFDCPA)
Federal law that prohibits unfair debt collection practices, such as lying, harassing, misleading and otherwise abusive debtors, by debt collectors working for collection agencies
Federal Fair Reporting Act
Federal law that regulates the collection, distribution and use of consumer information, including consumer credit information
Fair Credit Reporting Act (FCRA)
Federal law that regulates the collection, distribution, and use of consumer information, including consumer credit information Protects consumers from illegal collection practices
Who are punks when it comes to debt collectors
Finance companies
Food, shelter, clothing, transportation
Four walls
Court order allowing a lender to take money directly from the debtor's paycheck
Garnishment
Typically lawsuits under $10,000 are filed in
General Sessions Court (or small claims court) which is a fairly informal proceeding
Gives creditors a "fair share"
Pro rata
T/F A collector or creditor may take bank account of garnish wages for delinquent IRS or student loan debt
T
T/F Bank fraud is when someone takes and uses someone else's credit card
T
T/F Collectors are high turnover positions with low-pay
T
T/F Identity theft is not just money, it includes medical fraud, employment fraud, and social security fraud
T
T/F Identity theft is on the rise
T
T/F If you settle a debt it will show on your income tax; you will have to pay taxes on the amount of money you settled because on taxes it will read as you were given a gift of this amount of money
T
T/F The FICO score is an "I love debt" score and is not a measure of winning financially
T
T/F The best way to deal with debt is a plan
T
T/F You cannot prevent identity theft
T
T/F You should check your credit report every year
T
T/F Credit clean-up is a scam
T You cannot repair a bad credit report unless there are items on the report that are genuinely incorrect
Who is the best collector
people collecting on your 1st mortgage
The best way to pay debt is with a
plan
Do not let a collector use your credit report as a paper club. When you are unable to pay the minimum payments, use the
pro rata plan
Collectors are trained
salespeople and telemarketers
Account information stays on your credit report for ______ years from the date of last activity
seven
At any time during the process, you may settle with the creditor or their attorney in writing. If you are not able to reach an agreement, you can file with the court a
slow pay motion called a "pauper's oath" in some states
Necessities
something that is necessary, a requirement or need for something
Eventually if you are making no payments and have cut no deals you will get
sued
