Consumer: The Northwest Voice

Welcome to the Sandwich Generation

At this time in your life, you are probably focusing on your career and looking forward to retirement. But, certain challenges may be looming that could hinder you from achieving your goals.

Sometime between the ages of 40 and 60, you could find yourself in a position where you must help put your kids through college while at the same time caring for your aging parents.

A growing number of Boomers are finding themselves stuck between tending to the needs of their parents while still supporting their own children.

While attempting to juggle more responsibilities, you could feel like you are being squeezed between two generations of loved ones. Sound familiar? Welcome to “The Sandwich Generation.”

Today you face challenges more complicated than those your parents faced. You worry about paying for college, funding your own retirement, and about planning eldercare for your parents.

Some members of the sandwich generation could be caring for three or even four generations: their parents, kids, and possibly their grandparents or grandchildren.

It’s possible that your children could be starting college around the same time your parents begin depending on you for support. You could also experience "boomerang children" who return home after graduation, a divorce or a job loss. And, like others, you face debt, financial insecurity and the demise of Social Security.

Nowadays, due to an increase in life expectancy, your parents likely could live well into their 90’s, making it necessary for you to plan well into the future. However, living longer means paying the increased costs associated with their extended care. These costs can quickly add up, eating away your parents’ and your own savings to pay for their care. Because of this, you and your family could suffer overwhelming financial and emotional stress.

According to the 2005 MetLife Market Survey of Nursing Home & Home Care Costs, the estimated average cost for a nursing home stay was around $64,000 a year ($176 per day) in a semi-private room; or just over $74,000 a year ($203 per day) for a private room.

The average stay in a nursing home is about 2.5 years. But what if your parent is at home? The cost for an in-home health-care aid can run you more than $38,000 a year (@ $19 per hour). Keep in mind that these costs could be higher in larger metropolitan areas.

Don’t forget about the ever-increasing costs of college education. The 2005-06 cost of a four-year private college averaged $21,235 per year — up 5.9% from last year — according to the College Board. A four-year public university averages $5,491 a year — up 7.1% from last year.

What about lost wages? Caregivers could lose income because of time off from work due to doctor visits, picking up prescriptions, preparing meals, not to mention other daily demands. This could require several hours each week which is why many caregivers, mostly women, only work part time, giving up valuable benefits or are sometimes forced to leave their jobs altogether.

During your lifetime, some experts estimate up to $659,000 could be lost as a result of reduced pay, missed 401(k) contributions and forfeited health benefits.

Here are some survival tips to help you avoid becoming lunch:

1. Save for your own retirement. Even though you may find yourself struggling to pay your mortgage, helping support your children and covering the added expenses of caring for your parents, you should continue saving for retirement. Put as much as you can away for yourself, either through a 401k, IRA, ROTH or SEP. Any of these can grow tax deferred until retirement. If your employer offers a 401(k), max it out in order to take full advantage of the company's match, if not, you could be throwing away free money.

2. Don't dip into your retirement savings. Your pension plan may be your only income source during retirement, so avoid tapping into your nest egg to pay for your child’s college. It’s better to use student loans that can be repaid once they begin earning a salary. If you can't afford the college they want to attend, be realistic with your children. They may need to consider the possibility of having to settle for a less expensive college, or that they might need to get a part-time job to help pay the costs. Only use your own assets to pay your parents’ bills as a last resort.

3. Start a college savings plan. Start saving for college early by establishing a 529 plan or Educational IRA account. Be sure to set up monthly drafts to have the money taken out of your bank account automatically. This way, you avoid having to write a check each month, otherwise you might find an excuse not to. $100 a month earning 8% per year over 15 years could grow to $35,000. Even if it’s only $25 or $50 bucks a month, you could save enough to pay atleast some of your child’s tuition. Grandparents or other family members are also allowed to contribute to these plans for your kids. And, if necessary, your kids can still apply for student loans or financial aid.

4. Ensure your parents have adequate insurance, especially long term care.
Between ages 50 and 65, you should be thinking about buying long-term care insurance. The cost typically ranges between $100 a month for a basic stripped-down policy to over $300 a month for a policy with all the bells and whistles. The earlier you buy it, the less it will cost, so don't wait until you or your parents are in your 70’s or 80’s and/or get ill. It may not be cheap, but compared to the potential expense and burden on your family, or the loss of dignity and independence, it‘s well worth it. Your parents’ life insurance policies or annuities may have riders built into them that could provide long term care benefits already. Check with your insurance agent to see if your policy contains these provisions.

5. Gather important documents and keep them safe. Gather all of your parents’ important documents such as wills, trusts, durable powers of attorney and advanced healthcare directives, plus get the contact information of their advisors. A durable power of attorney can be found at any government office and gives a person legal authorization to pay bills and manage finances (financial) or to make medical treatment decisions (healthcare) once a person becomes disabled and can’t handle it themselves.

It must be signed before they become disabled, and be sure to name someone you can trust. Hospitals may require an advanced healthcare directive which explains your wishes regarding life-support. Also, make sure your parents have a will or living trust, which should be updated every few years. Keep these items in a safe place where you can easily find them.

6. Take inventory of your parents' assets and consolidate accounts. Your parents might have stocks or bonds stored in a drawer or may even have cash stuffed in a coffee can in the garage. Seek help from a financial planner who can review your parents’ assets and recommend the best way to utilize them to meet their financial obligations.

Consolidate assets such as multiple bank accounts, investments, annuities, retirement accounts, pension plans and credit cards into one place such as a bank or brokerage for easy access. Atleast one child should know about their financial accounts, where to find the documents and what their wishes are.

7. When in doubt, seek help. Your community’s local support services can be a good source for eldercare assistance. They can usually be found in the yellow pages under “Senior Citizens Services & Organizations.” Contact religious and civic organizations and talk to people you know who are also members of the Sandwich Generation. You may also wish to seek advice from an elder law attorney who can inform you of the laws affecting Medicaid and Medicare and the qualifications for each. Some internet resources can be found at the end of this article.

8. Plan for emergencies and control debt. Review your finances regularly to plan for emergencies, like unforeseen expenses from illnesses or job loss. Reduce debts like car loans, credit cards, personal loans, student loans and department store charge cards. Set a budget and stick to it to keep your debt under control. If you have boomerang kids that have returned home, ask them to help pay for groceries or utilities.

9. Communication. When planning a parent's care, it could be necessary to prepare for their eventual demise. Ask your parents about their plans for the future. Do they have specific wishes for their care, housing or final arrangements?

Encourage communication with the entire family to discover ways to share the burdens. Not all family members will agree on how to take care of a parent, who will be the primary caregiver, and how to pay for it. Even families that are relatively close could be divided by these issues. Avoid disputes with your siblings by taking their wishes into consideration.

10. Take care of #1 (you). Elder care can take a toll on you, physically and emotionally. Don’t forget to nurture yourself. Get plenty of rest, relax every evening, stay in touch with your friends and keep your hobbies. Take time for yourself in order to renew your spirit and energy. Plan outings with the family, a quiet evening at home or a date with your partner.

In order to survive the “Sandwich Generation”, proper planning should be done to help reduce some of the stress and costs associated with providing care for aging parents and supporting your children. A solid financial plan and good communication are essential for managing a successful multi-generational family and keeping a happy and healthy home.

Internet Resources:

American Assoc. of Retired Persons (www.aarp.org)

American Health Care Assoc. (www.ahca.org)

HUD: Senior Housing Options (www.hud.gov/groups/seniors.cfm)

Medicare: Official Gov't Site (www.medicare.gov)

National Council on Aging (www.ncoa.org)

Senior Citizens’ Resources: USA.gov (www.seniors.gov)

U.S. Administration on Aging (www.aoa.gov)

— Roman Lara III is a Financial Planner and Branch Manager with Brookstreet Securities Corporation, Member NASD and SIPC in Bakersfield, Ca. He has more than 10 years experience in retirement and estate planning. Roman is a Certified Estate Advisor (CEA) and a member of the National Association of Financial and Estate Planning (NAFEP). Email: rlara@brookstreet.com

Dollars and Sense: Credit reports could be confusing, but avoiding them is not the answer

I would like to talk about how many consumers haven’t a clue about how to read their credit reports, and are so confused they would prefer not to look at them.

Credit reports are sometimes difficult to read because many credit service providers have so many different formats. In their attempt to simplify the process, but be informative, they have confused the entire credit report reading process.

Here are some key points as to how to read your credit report. First, locate and define the creditor. Many times you will not recognize who the creditor may be. At this point, highlight that creditor’s name.

Next, locate the account number. Many times the credit bureaus will leave off the last four digits of a credit account such as Visa, Master Card, Sears etc. This is according to fraud protection measures taken by credit bureaus for the consumer, which should protect someone from having full access to your credit history.
However, if it is a collection account, the full account number will be provided. (Credit bureaus don’t think that anyone would want to take over your collection account.)

You can match up account numbers that appear on your credit report to any documentation you have available. The next point of interest on your credit report is the date the account was opened. That should appear on the same line indicating creditor. The date on which you opened your account should match up with your original statement.

The next point of interest should be the last date of activity, indicating when the creditor last showed activity on your account.

Many times consumers come to me and are very upset that a payment made last month does not show on their report. This doesn’t mean that the creditor is not reporting the payment. It means their reporting cycle has not come around at the time the payment was made. Creditors have 30-, 60-, and 90-day reporting cycles.

Most creditors use a 30-day reporting cycle. However, there are some creditors who will take up to 90 days before reporting to credit bureaus the last activity on your credit report. In those instances, make sure you keep good records or some type of documentation to show that you have made your payments.

If you are in a mortgage situation, and the lender is requiring you to pay down on a particular account but your creditor has not yet shown your last three payments, you can show the lender that you have made the three payments. The lender can then get what is called a “supplement” and rescore your credit rating.

The next three points of interest are high credit, balance terms, and past-due amount. These three areas are very important, and are where most consumers miss the boat.

Many times consumers have good payment histories, which means they pay all creditors on time. However, they wonder why they have such low FICO scores. Often it is because their debt to ratio is too high, meaning they owe too much on outstanding debt, and do not have enough available credit.

If you remember, a few columns back, I explained how to increase your FICO scores by paying your accounts in three separate payments using the same amount of money. For example, a $75 monthly payment paid on the 10th for $25, on the 20th for $25, and $25 paid on the last day of the month will help pay the debt off quicker and also will bring down your debt ratio.

The next section of your credit report is history status. This section will indicate how many times you have been late on an account (30, 60, or 90 days). If you have the number 1 under the 30 that means you were thirty days late, a 2 means you were 30 days late twice, etc.

The same applies for 60 and 90 days. However, 90 days may have the number 9 under it, and if a 9 appears under 90 days, that means the account is either a charge-off account or it is a collection account. It should state so in the last section, which is the present status section.

The next two sections of great importance are: public record and inquiries. When you are going over your credit report, make sure you view the public record section to make sure there are no outstanding tax liens, judgments, or bankruptcies that may not be yours.

Inquiries can be the silent killer of your FICO scores. Most consumers fail to understand that if you have more than three inquiries in a year, without ascertaining the product or services applied for, the fourth inquiry, and any thereafter, could cost two to five points off your FICO score.

Consumers miss the next two sections all together and these include the number of previous addresses and the number of “also known as” or aka’s. If you have more than five previous addresses that appear on your credit report, it could cost one to three points on your FICO scores. And, if you have more than three aka’s on your credit report, it could also cost one to three points on your FICO scores. The aka’s that appear on your credit report could be as simple as a clerk misspelling your name, and entering the incorrect name into the system with your correct social security number and correct current address.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, send e-mail to: Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Identity protection at home, abroad

This week I would like to follow up on my last column regarding identity theft. One of my long-time mentors has been able to convince Congress and the credit bureaus to provide each consumer with an identification code in order for his or her credit to be processed. This means that if a creditor or any other person does not possess your identification code, he or she will not be able to get an updated report unless your identification code is being disputed.

The only drawback to this program is a person must notify a credit bureau in order to be issued an identification number. This program is not yet in operation, but I will inform you of its activation as soon as I know about it.

Under the Fair and Accurate Credit Transactions Act, the crime of identity theft has grown to epidemic proportions. A shocking report released by the Federal Trade Commission in September of 2003 estimated nearly 10 million people were victims of identity theft in 2002 alone. Since then, identity theft has nearly increased by half that amount. Many consumer advocates recognized by Congress recommend that consumers should monitor their credit reports no less than twice a year to detect any inaccurate reporting they may be aware of, which I agree with completely.

The Fair and Accurate Credit Transactions Act also plans to create an active-duty alert that would allow active-duty military personnel to place notations on credit reports alerting potential creditors of possible fraud. Because military members overseas lack the means to monitor credit activity, this program would greatly benefit them.

An active-duty alert would be maintained on file for at least 12 months. I can’t tell you how many military people have had their credit history destroyed while on duty overseas. They could not use the services of a credit repair company or a debt management company to help them while they were away.

What this all means is, once again, you too can have good credit

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Staving off credit predators

Hello Northwest Voice readers.
Once again, thank you for all of the e-mails you sent to me after my last column. I also would like to thank those of you who came up to me at the Voice one-year celebration party on Sept.16 at the downtown Nile. The Voice really knows how to throw a party! I must say that this was one of the most well-constructed parties I have attended. The band was great and the food was good, especially being that it was free and all of the people who attended were so very friendly. Thumbs up to The Voice and those sponsoring the gala event.

I was hoping that my last column would help everyone who may have had an unresolved issue, and that by reading my column could learn something that would help. It appears that what I am writing about has helped many of you in more ways than one.

In this column, I would like to talk about identity theft. We all know identity theft is on the rise in America. It is the fastest-growing crime in America, and there appears to be no end in sight. What can you do to protect yourself from this new wave of crime? One thing that you have to know is that this crime strikes mainly the middle- to upper-middle class consumers, which means most of us. California has the highest rate of identity theft in the nation. Nearly 60 to 65 percent of identity theft takes place in California. Protecting your credit history should be high on your list of things to do.

A large part of identity theft is performed by people the victim knows or someone who is close to the victim. One way that many street-level identity thieves get a hold of personal information is by garbage diving. We have all heard of people going through garbage to pull out credit card statements and other personal information.
Another way that personal information may end up in a stranger’s hands, which most people don’t know about, is through accessing the credit bureaus.

With only your name and address, a thief could send the credit bureaus a new bogus address and a bogus social security number and then dispute a bogus account at any of the three major credit bureaus. The credit bureaus would then send an updated report to the new bogus address, along with your correct Social Security number and a footnote stating a variation in the Social Security number. The problem is that the credit bureaus just released all of your personal information to some stranger without your knowledge.

The thief would then have everything needed to run up your credit: your correct Social Security number; all of your previous addresses; all of your previous jobs; and all of your accounts with which they could order new credit cards.

The credit bureaus do not want the general public to know that this problem exists within their system. There would be a major backlash if consumers found out just how easy it is for a stranger to get all of their personal information from the credit bureaus. However, criminals have known about the existence of this problem for years and have preyed on the bureaus for quite some time.

The credit bureaus will tell you that there are barriers in place to protect you from this, namely a current picture ID. However, criminals can get a fake California ID, and if the credit bureaus have never seen you before, how do they know if the person on that ID is you? The bureaus will also say that a second form of ID is required, such as an electric bill or Social Security card. Just like the first form of ID, a street-level criminal can get a fake utility bill or Social Security card.

These are old techniques but they are still effective. You can protect yourself by ordering a credit report directly from the credit bureaus no less than twice a year so that you can review your report and detect any foul play. Get a paper shredder and shred all important documents (get a paper shredder that mulches the paper or one that shreds sideways and not just straight cuts). You may want to get a post office box, but not from the U.S. Postal Service. Get one from UPS, Mail Plus or a mailbox service in your neighborhood. Have all of your personal mail go to your postal mailbox so that street-level criminals would have a much more difficult time in figuring out who you really are.

Inform the credit bureaus to e-mail you every time someone inquires about your credit. Most street-level criminals would not know your e-mail address, and they would not realize you would be notified of their actions. All of the credit bureaus have a notification program. These programs can range in price from $35 up to $75 a year, so make sure you choose the right program that fits your needs.

On another note, the seminar I mentioned a few weeks ago has been rescheduled for Sept. 28 from 5:30 to 8:30 p.m. at the Double Tree Hotel. To RSVP, send e-mail to: tonyatxfc@yahoo.com. There is a $5 cost for those who RSVP and a $10 charge at the door. Remember that you too can have good credit.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Using other lines of credit to improve your FICO score

Hello Northwest readers. I would like to thank all of you who responded with your e-mails regarding my last column on HELOC Loans.

Many of you also requested information about my upcoming seminar, but due to the overwhelming response and space issues, I was forced to postpone the seminar for a couple of weeks so we can accommodate the number of people who want to attend the seminar. For those of you who have responded with your e-mails, you should have received a response from me by now regarding the delay. Stay tuned for a new date, time and place.

At my seminar, I’ll be sharing some dynamic techniques with you. For example, how to add years of good credit to your credit history within 90 days. This is a very powerful program.

A few columns back, I shared with you how to add credit to your child’s credit history in order to assist them in getting a good start in life.

Since then I’ve done a great deal of research and have found a company that will allow you to use their credit history for a nominal fee. They will add as many lines of credit to your personal and/or business credit history you want. I only suggest three lines of credit. These credit lines will range in history from two to 18 years and they will range from $5,000 to $25,000 in credit line — and you are not responsible for making payments.

These credit lines have a history of credit balances of no less than 70 percent. In other words, this company historically uses about 30 percent of the available credit on a monthly basis. What does that mean for you? And how can you benefit from using this company’s credit lines? It means that, if you have a 600 FICO score and you need 650 to qualify for your new home that has a 90-day escrow, by adding two or more lines of this company’s credit history to your credit report you would qualify for that home loan.

A lot of your qualification is going to depend on what you already have on your credit report and what amount the lender is going to require that you pay off. But I saw documentation that showed a borrower’s credit history jumping 100 points after adding only two lines of credit to their credit history.

If you own a business, or recently opened one and are trying to get established, you may be trying to get bank loans, personal loans, or using a house as collateral to get start-up capital — the list goes on.

This technique will now allow you to have immaculate credit history for your business within 90 days or less and your business can now stand on its own two legs and support you instead of you supporting it. You can now get that small business loan or that SBA loan or that start-up capital to get your business off the ground.

For those companies that have already been established and are looking to expand business, but the bank wants to see more assets or more credit history in order to give you the needed capital to make those growth dreams come true, this program will work great for you as well.

This is the program I am using for my oldest son, A.J. I promised my son that if he did everything that I asked of him for the next three years, including getting his contractor’s license and completing his education, that by the time he turned 23 years old, I would build him a million dollars worth of credit.

As of today, I have never broken a promise to him or any of my kids. He is going to be the first 23-year-old millionaire in the family.
I am testing this program out on him and when it works, along with all of the other techniques that are available to him, all of my kids and grandkids will not have to worry about a dime for the rest of their lives.

I know that the American Dream can come true. It’s up to each of us to personally find out for ourselves what makes us happy and to shoot for that goal. Don’t let anyone or anything stand in our way. I know that many of you have heard this before, but it’s so very true. Your credit is going to play a major part of your success.

How you treat your credit, the way you handle your payments and the techniques that you use to establish and build your credit history will all play a part of your success, whatever that may be.

But not everyone wants the fancy car or the big house or the large bank account. Some of us just want to be able to pay our bills on time, without having to worry, or to drive a mid-level car that gets good gas mileage, or have enough money in the bank that will allow us to take a vacation two times a year.

Remember that you too can have good credit.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, e-mail them to: Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Working a HELOC loan in your favor

Once again, thank you to those who responded to my last column on credit card payments. I really hope these techniques will help you, the reader and consumer, in your efforts to achieve financial security and success.

In fact, one of our readers wanted to know if the credit card payment strategy would work for a HELOC payment. For those of you who do not know what a HELOC is, it is a Home Equity Line of Credit. This line of credit is based on the equity in your home to which the lender would issue you a checkbook or credit card and you could then write a check or charge the amount that you would need. You pay that amount back with installment payments.

Because this is a line of credit and not revolving credit, the credit card payment strategy will not work with the HELOC loan in order to help you increase your FICO scores. However, here is a technique that will help you increase your FICO scores with the HELOC loan program.

As consumers, we have been trained and programmed to do certain things and one of the things that we are trained to do is to follow protocol. This means that if I have a $100,000 HELOC loan and I need a minimum amount of $30,000 dollars to cure some issues that I have identified and deemed to be taken care of, I will borrow that specific amount to take care of those issues. If I need $30,000, then I will either charge or write a check for that amount. That amount will show up on my credit report as a $30,000 personal loan. However, I just hindered my FICO scores because now it looks like I only have a $30,000 Line of Credit and not a $100,000 Line of Credit. Thus, I am maxed out on this loan.

The best way to handle a HELOC loan is to charge your maximum amount that is available to you. Then at the end of 30 days, pay back $70,000 to your lender and take the other $30,000 to cure your issues.

Now what you have done is caused your FICO scores to increase because it looks as though you are only using one-third of the amount that is available to you. That is the truth, because the full amount of $100,000 is now shown from the beginning of the loan. It now looks as if you have borrowed your maximum amount and paid back nearly three-fourths of the loan after only 30 days. Thus, your FICO scores could increase 10 to 50 points by using this technique.

This technique can also be used with your American Express credit card. Consumers make a common mistake every month with their American Express credit card: we charge what we need and then we pay the full amount back. Just like the HELOC loan, the full amount is to be tendered to your credit card credit. However, most of the time we only charge a certain dollar amount every month, let’s say $10,000. When the case may be that I have $50,000 available to me and I only use $10,000 a month, that shows up on my credit bureaus.

Now it appears that I am maxed out every month. But, if I were to max out that American Express in the amount of $50,000, (first contact the credit card company to inform them that you are going to max out your credit line for about 30 days for business purposes, so they won’t flag your account) for this month, then charge our normal $10,000 for the following month, it appears you are only using one-fifth of the amount available to you, which is the truth. However, by not using this technique, none of your creditors know your true credit history. You can also increase your FICO’s by about 10 to 40 points by using this technique.

All of these techniques are designed to give your true credit history. And, until now, most consumers have not accurately shown their credit history to creditors.

On Sept. 7 I will be having a credit and real estate seminar. Cost is $5. If you are interested in attending, e-mail me and I will inform you as to the time and place. I will talk about credit, corporations (Nevada versus California) and how to add two to five years of good credit on your personal as well as corporate credit report within 30 to 90 days. I will also discuss how to purchase property the right way, with no money down, and the three things you need to know to become a real-estate investor.
Remember that you too, can have good credit.

— Tony Grimes is a local, independent debt consultant.

If you have questions about credit or other financial issues, e-mail them to: Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: A simple strategy to improve your FICO score

Once again, I would like to thank all of you who responded with your e-mails. Today, I am going to revisit a subject matter that appears to be affecting many people across the nation: FICO scores.

I attended a one-day workshop down in the Los Angeles area (Glendale) and this workshop was filled with nothing but mortgage brokers, real estate brokers, loan officers, escrow officers and real estate agents. They had seating for 100 people, but that was not enough to accommodate all the people who attended the workshop.

It appears that FICO scores are the number one set of numbers in today’s economy. Women and men used to worry about the three numbers that appeared on a weight scale or the two numbers that defined their age. However, now the numbers that people most worry about is their mid-FICO number. The room that day was filled with professionals wanting to hear one thing: how do I get my clients’ FICO scores high enough so that I can get my clients’ loan to go through.

Many of these professionals had loans they have been working on for months, trying to get them closed. And, most of the time, once they got pass one hurdle, another issue would come up. Many times that issue had to do with credit because an old collection account would pop up at the last minute to cause the FICO scores to drop below what the lender would require for that particular loan program. Or the client charged some school clothes for the kids for back to school or the credit accounts were too new. At this one-day workshop, they were able to resolve many of the credit issues that haunted so many of these professionals.

I am going to share just one of the techniques that was shown to all of these professionals, and how they would be able to apply this technique right away to help improve their clients’ credit history within the next 30 days.

That technique is payment pattern. One of the speakers, who owned a collection agency and also owned a credit-reporting agency, shared with these professionals (some of the information that is privy to people that are connected to the credit bureaus).

When you make a payment to your creditors every month, that creditor accepts that payment for whatever your minimum monthly payment may be. That creditor then takes and divides that payment as they see fit. This means most of that payment is going towards the interest of that account (being that it is the creditor’s money). This means in a one-year span, you will have made 12 payments of mostly interest, toward any one of your charge accounts.

The technique that the speaker was suggesting is to take your same one, monthly payment and brake it up into three payments, for example, on the 10th, 20th and last day of the month. Then, instead of making 12 payments a year, you would have made 36 payments a year on your account. Now, let’s say your monthly payment on your VISA card is $75 per month. What you would do is make a $25 payment on the 10th of the month, a $25 payment on the 20th of the month and a $25 payment on the last day of the month. Keep in mind that this technique only works with revolving charge accounts.

Now, what you have done is you have broken up your creditors’ accumulative interest pattern. Which means that instead of them calculating 30 days of interest, they are only calculating ten days of interest, three times a month, which will allow you to pay more towards the principal and it will also trigger your creditor to possibly increase your credit limit because the account is being paid off faster. Your monthly payment will remain the same but the benefits will be much greater.

This technique will also trigger the credit bureau to increase your FICO scores much faster because of the activity that’s taken place on your account. The speaker stated that credit bureaus use the amount of activity on an account to increase or decrease a person’s FICO score.

If you use this technique for a period of three to six months, it is possible to see an increase of 60 to 100 points in your FICO scores. I will be bringing you more of these techniques in future articles.

In the mean time, I would like for you to remember “you, too, can have good credit.”

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: FICO scores mean more than you might think

Hello Northwest readers,
Once again, I would like to thank all of you who responded with your e-mails. There were a few of you that I am going to need to see in person in order for me to help you out with your particular situation.

Today, I would like to touch on a subject that I briefly mentioned in a previous column and that is FICO scores.

I have a close friend that has come into my life and that of my wife’s within the past six months. He and his wife are both from the Midwest part of the United States, just like myself. They moved here about seven months ago and have recently found out they were going to have a new addition to their family. They are also in the process of purchasing a new home in the Haggin Oaks area of Bakersfield.

After being here for such a short period of time, my friend learned he was up for a promotion at his job. He thought he was going to get his manager’s position.
However, it turns out his new job would be for the corporate office, specifically handling financial affairs. My friend is absolutely horrified of this prospect.
For a guy who is buying a new home in the Oaks, has a new baby on the way and just found out he has become his manager’s boss, he should be on top of the world, right?

So what do his FICO scores have to do with all of this?

Actually, our friend’s FICO scores have everything to do with his situation.

When he walked out of his interview knowing he had this position in the palm of his hand, a fear struck him because he also knew he had some credit issues.

Even though he had those issues, he knew in purchasing a new home, he could work out those problems with the lender because with my wife as his real estate agent (and her 15 years of loan processing and underwriting experience), she would guide him in obtaining the best loan for him. So, even though he had credit issues, and was having a new addition to his family, everything would turn out OK.

However, when he found out he would be moving into a much higher position than he had previously thought, he knew his company would be checking his credit report to see how he handles his personal finances.

Remember, he now will be in charge of a portion of his company’s funds. And, if you cannot handle your own personal funds, many companies think, then how in the world are you going to handle their funds?

This is what my friend also thought, and he called me immediately to ask for my help through my credit repair company to clear up his credit issues. Financially, this new position can help ease the pressure of his new monthly mortgage and also help ease the pain of the added expenses that will incur with the anticipated addition to his family.

What once really did not play a big part in my friend’s life is now playing a huge, mega part in his future as well as his family’s future — FICO scores.

Most consumers don’t realize how much a low credit score is costing them, particularly when it comes to mortgage loans and their careers.

On March 14, Eileen Alt Powell of the Associated Press wrote that the three major consumer credit reporting agencies announced they have created a new scoring system aimed at simplifying the loan process for both lenders and borrowers. The new scoring system is as follows (from lowest credit ranking to the highest):

F — 501-600
D — 601-700
C — 701-800
B — 801-900
A — 901-990

The new scoring system is called “Vantage Score” and is being independently marketed and sold separately through each of the three national credit reporting companies, according to Powell’s article. No matter how low a person’s credit score is today, they can begin working on improving it and eventually obtain a high credit score.

I strongly suggest that each of you find out what your FICO scores are and if they are below 600, do your best to get them above 650.

Understand that nationally, everything is on the rise as far as goods, services and products. If you don’t have your credit to help you out, then how will you keep up with the high cost of inflation?

Remember that you, too, can have good credit.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com.
We will consider running your question and his comments in a future issue of The Northwest Voice.

Clear Credit Report Before Shopping for a Dream Home

Hello Northwest Readers,
Once again, thank you for all the e-mails you sent last week. They were coming fast and furious, so it looks as though many of you are in need of some professional guidance. In order to get you and your families on the road to credit and financial success, I will answer all of you back as soon as I can.

This week, I received a request from one of my No. 1 Northwest Voice readers, asking me to talk about consumers qualifying for home mortgages. That fan is my wife.

My wife is a new real estate agent, but a 15-year veteran loan processor. I, myself, was a loan officer for over seven years, and at one point in my career, I worked for a major mortgage broker in Irvine, Calif. for a number of years, before my wife and I decided to move here to Bakersfield.

Those Northwest readers who are in the mortgage industry know that a great deal of the sub-prime mortgages originate out of the Irvine area, and if any of these companies cannot get you financed or refinanced for a loan, many times it just can’t be done.

However, I understand the struggles of all real estate agents, loan officers and loan processors when they get the proverbial “loan from Hell.”

This is where the consumers’ FICO scores are in the low to mid 500s, they just started a new job two weeks ago and the job change was not in the same or similar field of work they just left. In addition, during the transition period, they were in school and not able to generate the type of income needed to purchase a $400,000 home. But, they have to move out of the husband’s mother’s home because the wife and the mother-in-law are not getting along.

So now, the real estate agent, loan officer, broker, escrow and loan processors are all under pressure to put this couple in a home, and not just any home, but a home that they like, in a neighborhood where they will feel comfortable and neighbors with whom they can get along. I’m sure that for many Northwest readers who are in the mortgage real estate business, this situation sounds familiar.

In many cases, borrowers also want a deal with no money down, 100 percent financing and no points involved because they saw a television ad from companies with a no-point program, even for consumers with bad credit. So, they want their real estate agent or loan officer to do a no-point program for them as well.

What most borrowers don’t understand is that when they enter the doors of that real estate office or that mortgage company, loan officers depend on customers having their credit act together, at least somewhat. For the borrower, this is an emotional buy or purchase for them, but for that real estate agent or loan officer, this is all business.

It is very important for you, Mr. and Mrs. Consumer, to know first what’s on your credit reports before you start house shopping. There are many ways to get a free copy of your credit report. One way is to contact the credit bureaus directly.
You can reach Experian at (888) 397-3742, TransUnion at (866) 887-2673 and EquiFax at (800) 685-1111. Please, do not go out and apply for credit so you can get a free credit report because those inquiries can hurt your FICO scores by 2 points or more for each inquiry.

If needed, seek professional assistance to help you understand and clear up negative remarks showing in your credit report.

Consumers, remember that your loan process does not have to be as difficult as it has been, if you take the necessary steps to correct most of your credit issues and get your FICO scores above 620. Ideally, at the 680 range, and that should be your mid-FICO score.

All three major credit bureaus give you a certain score; the score that lands in the middle of the high and the low is your mid-FICO.

For example, if Experian has you at 692, TransUnion at 677 and EquiFax at 680, your mid-FICO score would be 680.

Your credit is the key to your entire mortgage experience. It will determine your interest rate, your down payment and how long it will take to close the loan.
It will also determine when you will be able to refinance because you may get a no-prepay loan, a two-year prepay loan, a three-year prepay loan, or even a five-year pre-pay loan — all of these situations are determined by your credit scores.
One last time, first look at your credit reports, clear up any derogatory reporting and then shop for your new home or refinance your current mortgage.
Remember, that you, too, can have good credit.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, please e-mail them to:Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Is Co-signing a Good Thing to Do?

Hello Northwest Readers!

Once again, thank you for sending in your e-mails and questions that most concern you. In this column, I am going to talk about a subject that has affected every one of us in one way or another and concerns me deeply.

It’s co-signing.

We, as consumers, follow trends and many times, bad advice. And, in many cases, it is difficult to change because we have done it wrong for so long that it has become habit. I’m referring to co-signing.

We have been taught the only way for us to help a loved one, a relative or a friend is to co-sign for them.

As many of you have found out, when you co-sign for that person you thought would not or could not do you wrong, it has turned out to be one of the most devastating things that has ever happened. Then, you are left holding an empty bag.

What we have to understand is that hundreds of thousands of years ago, God’s word talked about co-signing for our brethren. He tells us not to co-sign unless we are willing to suffer the consequences that come along with it.

This practice takes place hundreds and hundreds of times every day. People who do this put their credit at risk and in many cases, it can destroy families, relationships and marriages.

How do we stop this madness?

We need to understand that our credit system is designed on what appears to be correct and accurate.

As parents, we all would like to help our children get a good start in life and in many cases, we would do almost anything to help them out, but co-signing is not the best start.

First, start teaching them the value of credit around the age of 15.

Why 15? That’s because most likely on your child’s 17th birthday, you should get three credit cards, each with limits up to $1,000 in your name.

You can use these cards to purchase their school clothes, charging no more than $250 on each or the total amount you would have paid for in cash on these cards. Do not use these credit cards any longer once you have done this.

Now start making the minimum monthly payments or you can have your son or daughter make the minimum monthly payments to learn this new responsibility.
Then, add your son or daughter as a card user at 18. After that, have your son or daughter apply for three new credit cards just in their name since now they can legally sign a contract.

Once they have achieved this goal, close out the original three credit cards you opened because your name is connected to those cards.

If your child wants to purchase a car or get an apartment, he or she would be able to do this without you having to co-sign. They now can stand on their own two feet.

You can do the same thing for anyone else. You may add them on as a card user once they have first cleared up any credit issues from their past. Otherwise, it won’t work for them. It will be like adding oil and water together (they don’t mix well).
I am also working on a new credit-building program with some of our local banks. Will keep you posted.

Remember, you can too have good credit.

— Tony Grimes is a local, independent debt consultant. If you have questions about credit or other financial issues, please e-mail them to:Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: Warning to inquiring credit minds

Hello Northwest Readers,

I would once again like to thank all of you who have responded to my column with your e-mails. It’s really nice to know that this column is helping readers with some of their credit issues. I was talking to my neighbors, and they have really enjoyed reading the column, so I would like to say hello to Karen and Victor and their three sons.

I would like to talk about an issue that mostly every consumer has had as a problem at one time or another in their credit life, and that problem is inquiries.

Most consumers have no idea as to how inquiries even appear on their credit report. For those of you who don’t have a clue as to what an inquire is or how it appears on your credit report, I am going to give you a class on “Inquiring 101.”

When you apply for credit with a creditor such as Sears, J.C. Penney, Ford Motor Credit or any mortgage or lending institution, or anyone who has the need to run your credit for any reason, then you have just made an inquiry as to that product or service.

Most consumers have no idea how damaging an inquiry can be to your credit history.

I have had clients who have gone out and applied for credit a hundred times or more and when they come to my office to find out why they couldn’t obtain any credit, I look at their credit report and discover all of these inquiries. I explain to them that they have way too many inquiries.

These clients thought if they applied for credit over and over again, other creditors would see they are trying to get credit, and hopefully this would prompt them to give or extend credit to them.

When I explained that this was the wrong way to go about applying for credit, they were surprised.

Many times, consumers do not understand that when you sign an application with a potential creditor, you are telling that creditor you will allow them as well as any of their affiliates to also run your credit, which could range from 20 to 100 other creditors, depending on who is willing to finance you.

Car dealers are notorious for doing this. However, they would not have to do this if you knew how to purchase your vehicle from them in the right way.

But, I have some tips for you:

The best way to apply for credit is to be pre-approved with your bank or credit union, by having a voucher that shows how much you have been approved when you walk on to that dealer’s lot or into that furniture store or into that real estate office, etc.
If you don’t have a pre-approved voucher, then you will need to do the following:
First, you need to contact all three major credit bureaus and order a copy of your credit report.

Make sure that whenever you apply for credit for any reason your credit reports are no older than 90 days. You are entitled to one free credit report per year from all three major credit bureaus. So, if your credit report is over 90 days old, then you need to order new ones, and it could cost you around $8 as a California resident.

Take a copy of that credit report with you when you apply for credit at any of the above-mentioned creditors or for any situation that requires someone to run your credit.

Tell the salesperson — once you have chosen the product or service of your choice — to base their credit decision on the credit report you have provided for them.
If they agree to your terms, then you let them know that once they have reached the terms and conditions that you agree with, then at that time, you will allow them to run your credit.

However, the key to this technique is to not sign the application they have you fill out because once that application has been signed, then you have just given them the right to run your credit, regardless of what you may ask of them. So, be very careful when filling out your applications.

On the other hand, if they tell you that their company policy will not allow them to base their credit decision on the credit reports you have provided, then let them know it has been a pleasure talking with them and you will get their competitor to give you the service you deserve.

This technique will stop a lot of inquiries.

Once you have acquired the product or service that you were in quest of, you can then ask that creditor to remove their inquiry from your credit report because you are no longer inquiring, now that you have that product or service.

And beware, they are sales people who will offer you, especially women who do a lot of shopping at the malls during the holidays, some little “trinket” for applying for their store credit card — DON’T DO IT!

That little trinket can destroy your credit for up to two years before that inquiry can fall off your credit report.

There is one thing you must keep in mind when you are applying for credit from any creditor — you are in control, not the creditor.

They need you to move that product or service, so don’t take “no” for an answer, because many creditors will do what you want them to do.

And, for those creditors who refuse to do such a simple thing, then you don’t need them or their product.

Remember, you too can have good credit.

— Tony Grimes is a local, independent debt consultant.

— If you have questions about credit or other financial issues, please e-mail them to:Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Northwest Voice.

Dollars & Sense: How to graduate from an upaid student loan

Hello, Northwest Voice readers!

Once again, I would like to thank all of you who responded to my last column.
There was one Northwest reader who has run into a very common situation, but one that can be very detrimental to a consumer’s credit history, and that is — unpaid student loans.

Most consumers really have a hard time in dealing with this matter. In the past and even now, people believe that the only way to deal with student loans is to defer their student loans by continuing their education until they get their master’s, and even then, take subjects in different fields of education, so as to keep deferring payment of their student loans.

However, this Northwest reader’s situation is even more common and many consumers do not know how to deal with this matter:

Dear Tony,
I had a relative co-sign for a student loan for me. I couldn’t qualify for the loan on my own. I didn’t end up finishing the school program, but of course, I still owe for the student loan and it is a lot of money.

Now they are trying to collect the money from me and because I haven’t addressed it until now, they want very large monthly payments, and I cannot afford these payments. The loan people often threaten to garnish my paycheck or take money from my bank account. Can they really do this?

My co-signer has much more income than I do and could pay off the entire loan amount if she wanted to, but is also ignoring all the collection efforts. I have offered to pay the co-signer back, if she would pay off the loan, then I could pay her in more reasonable monthly payments than what the loan people want but she won’t respond to me, either.

How can I get myself out of this debt without hurting my family financially?
Signed,

Student loan woes

Dear Student loan woes,

First of all, one thing is to mend your relationship with that family member because that person may be the key to you getting out of this situation.

One way that you could get out of this matter on your own is to apply for one of the many student loan consolidation programs. The program that I normally refer my clients to is the William D. Ford Foundation. Most of these consolidation programs will consolidate most of your student loans into one monthly payment and the interest rate can range from 1 percent to 5 percent interest.

These programs can last from three to five years and you will be completely done within this time with your loans will be paid off. Hopefully, this will give you a sense of accomplishment that you can pay your debt on your own.

But, the collectors that are calling you now and telling you that they are going to debit your account or garnish your wages are blowing a bunch of smoke. They must first get a judgment against you. Then, a court hearing has to be set and once you get to court, the judge will ask for you to go out in the hallway and try to settle the matter before he makes a ruling.

If a settlement cannot be reached, the judge will then make a ruling. Most of the time, it will not go in your favor because you do owe the debt. However, you can file an exemption to wage garnishment once the judge has made his ruling. This will put the matter into another court. There, you will be able to tell the judge what a hardship this would be on your family and career if this collection goes through.

Normally, the judge will spread the payments out over a longer period of time and lower the monthly payment for that time frame. Your payments could be spread out over five to ten years. But, why would you want to pay for a student loan for that period of time?

One of the other methods that I advise my clients to use is to purchase an investment property, repair and fix up the property. This is where your co-signer may come in handy, if your credit will not allow you to use this technique. Let’s say you purchase a property for $200,000 but once the property has been repaired, it’s worth $310,000. You can sell the property for $300,000, which will make the property sell faster.

You then contact the collection company and ask them for a pay-off amount of your loan. Let’s say your pay-off amount is $60,000. You can then create what I call a “bill” and put that bill in escrow. Once the house sells, the bill will be paid in full (from the profits on the sale) and now the person that purchases your investment property has taken on your student loan and you just got out of your debt for free.

In fact, now there is still $40,000 left over. If it were me, I would offer my co-signer $20,000 for putting up with me.

Now for those of you who did complete your education but are still having problems paying your student loan, this technique will also work and you will end up with a free education and someone else is paying for your degree. If you would like to know how to use these various techniques, please do not hesitate to e-mail me at the e-mail address listed below.

And remember, you are the author of your own destiny and you, too, can have great credit.

Signed,
Tony

— If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.
— Tony Grimes is a local, independent debt consultant.

Dollars&Sense: Know your rights, no collections

Dear Tony,
I had a car accident back in 2004 and after making sure my insurance had paid all my medical bills, I put the terrifying experience behind me. But, a year later, as I was trying to buy a home, a collection appeared. I had no idea what it was for. I found out later it was a collection bill for the ambulance ride. The ambulance service mailed me statements at an old address, so I never became aware of it. The collection company said to me that if I paid them immediately, it would delete the record completely from my credit as if it never existed.

How do we deal with collection companies when a creditor doesn’t care to help you out? And, is it true that they can delete a collection from your credit report “as if it never existed?”

Signed,
Collection mess

Dear Collection mess,
One thing you must understand about collection agencies is that they are hired to do a job for a creditor. Many times, the people from the collection agencies are clients themselves and the agency is giving them a chance to pay off their debt to them by having them call you and collect from you.

So, when a collector calls you or writes you, first and foremost keep your “cool.” One technique collection agencies will use is to make the consumer lose their cool, so the consumer will say anything just to get them off the phone.

Consumers will even tell the collector that they will send the money — even when they don’t have it. Once you don’t send the money to them, after you told them you would, they now have something to hold over your head. They will tell you that your word is “no good.” They will elaborate that this is why you are in the mess you are now in.

Keep your “cool.” When they first contact you concerning the debt, inform them that you would like to see a copy of the original contract proving the debt. Under the Fair Debt Collection Practice Act and the Freedom of Information Act, collections must provide you with such documentation upon request, or they must stop all collection efforts.

If the collection agency provides you with that information and it is found to be yours, first look at the date in which the account went bad with the original creditor, then look at the address of the collection agency. These are two very important areas to look at.

If an account is four years or older, the collection agency has no legal right to collect on that debt under Federal and State Statute. A collection agency or any creditor (except federal and state government) can only collect on a debt legally for four years before their statute of limitation has run out. However, they can still try to collect for the next three years but there is nothing legally that they can do to you during those three years. Hence, that is where your seven years come from for that item.

The second area to look at is the address of the collection agency. What most consumers don’t know is that, an out-of-state collection agency cannot legally collect from a California citizen. They can only collect from you, if you do not know your rights as a consumer or you pay them because you are afraid of action against you.

If it gets to a point where the collection agency is calling you nearly 24 hours a day and you are scared to take phone calls at home or at work, then all you need to say to them are three little words: “CEASE AND DESIST.”

These three words will stop any collection agency in their tracks — no matter who they are. If they still continue to contact you by phone or even by mail, they are in violation of your consumer rights.

For every time they contact you, there is a $1,000 fine for violating your consumer rights — these fines are federal fines, so keep good records of every phone call. At their request, you may have to send letters informing them to do so. (Please e-mail me at the address listed below and we will fax you a sample copy of that letter for free). There are many ways of handling any collection agency, and if you have a situation that you do not believe you can handle on your own, please seek the assistance of a professional organization.

Now the second question: Can a collection agency delete a collection from your credit report “as if it never existed?”

The answer is yes and no. Credit bureaus know and understand that mistakes happen. They also understand about the four-year statute of limitation. What you have to remember is that credit bureaus are the ones who are reporting this information. The collection agencies hired the credit bureaus to report this negative information for them.

However, they have no control over the credit bureaus’ multi-million dollar reporting system. But if they inform the credit bureau to remove an account on a consumers credit report, or to delete an item off a consumers credit report, the credit bureaus must do it because the collection agency informed them to do so.

So, yes, collections can be removed, but creditors must request it because the credit bureaus work for the collection agencies.

Remember, you are the author of your own destiny, and you, too, can have great credit.

Signed,
Tony

— If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.
— Tony Grimes is a local, independent debt consultant.

Dollars & Sense: When ‘lates’ appear on your credit

Nearly 80 percent of all Americans have some sort of negative mark against their credit.

It could range from a 30-day late payment, all the way to a bankruptcy.
However, the most common negative mark on a consumer’s credit report is a 30-day late.

Without getting into too many details about how lates occur, I will give you a brief overview, and if you have further questions, then contact me at the e-mail address listed below.

There are two ways that a 30-day late, or for that matter, any “late” notation can appear on your credit report.
One way is that you missed your payment or mailed it in too late (let’s hope this is not the case).

The second way that a 30-day late appears on your credit report is that your creditor made an error in their system, and then reported that error to the credit repositories (Experian, Trans Union and Equifax).

What most consumers do not know is that 80 percent to 87 percent of the time, your creditor will report your payment as “late” to the credit repositories.

Let’s say you made a late payment in September, but the credit repositories do not report this late until October. That means the late status is inaccurately reported on your credit report.

However, you know that you were late somewhere around that time, so you accept the reporting of that, not knowing it is damaging to your credit history.

We must keep in mind that credit repositories are mandated to report accurate information as per The Fair Credit Reporting Act, and they (Credit Repositories) pride themselves as reporting accurate information.

Many lenders require that a consumer not have any lates showing on their credit reports within a 12-month period of time, if that consumer is applying for a high-risk, low-interest rate loan. If you are planning on applying for that loan in September of the upcoming year, your loan might be turned down because the credit bureaus are showing that you were late in September, and not October, of the previous year.

Consumers don’t question their lates 95 percent of the time . We just accept that the credit bureaus are correct in their reporting because, after all, they are suppose to report accurate information, aren’t they?"

The reporting of many late payments could also cost you a higher down payment on the new home that you are purchasing or that new car you are buying.

What most consumers don’t realize is that a creditor values your business.

If you approach and inform a creditor that you are dissatisfied with the reporting of a 30-day negative on your credit report and you have been with that creditor for more than three years, the credit manager — in most cases — will contact the credit bureaus and inform them to remove that late entry from your credit report. You are valued as a customer and that company knows the average consumer will purchase in a lifetime more than $15,000 worth of product or cash advances.

So, it is worth it to a creditor to remove that 30- or 60-day late in order to keep you as a valuable, lifetime customer.

However, if you pay that 30-day late down to a zero balance, your creditor is no longer receiving any principal or interest payments off your account, which might result in your credit card being closed by the credit grantor and can also result in the negative 30-day late remaining on your credit report for seven years after you have fully paid the account (Per Section 605 of the Fair Credit Reporting Act.)

Be very careful about paying off accounts that show “lates.”

In my opinion, it is best to work with your creditors (J.C. Penney, Sears, Texaco, etc.) and not collection agencies in order to have them remove the 30-, 60-, or 90-day late from your report. Then you can pay the account down to a zero balance. In this way, the account will follow its normal process of reporting.

As a consumer in today’s economy, your credit is one of your greatest assets. If your credit is not what it should be, then seek the help of a professional credit consulting firm. There are numerous firms, so choose one that you can check out online or with the Attorney General’s Office of the state in which the company conducts business.

You have to understand that creditors have attorneys, CPA’s, collection agencies, and the credit bureaus, all working for them. When you are unable to pay your bills, they are there to make sure your debts will be paid, regardless of whether there might be any financial damage to you. They are very diligent and determined to make sure you pay your bills.

In closing, I would like to say that one of the best ways in handling any credit issue is to meet it head on and with the assistance of a professional credit, if necessary.
Remember, you are the author of your own destiny and you, too, can have great credit.

— If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Voice.

— Tony Grimes is a local, independent debt consultant.