Why Do Insurance Companies Use Credit Reports and Scores?

September 19, 2014 by · 4 Comments 

credit scores

Section 604 of the Fair Credit Reporting Act says that the credit reporting agencies, Equifax (EFX), Experian (EXPN) and TransUnion, may furnish reports to any company that intends to use that information for the purpose of underwriting insurance. So, at the Federal level, the use of credit reports for underwriting insurance is perfectly legal and many of them do so. The real question is, why do they do it?

Insurance companies have the same issues lenders have: understanding the risk of doing business with certain consumers. It’s not necessarily the risk of being paid or not being paid for their services (premiums). It’s more so the risk of providing a policy for someone who is more likely to file claims and thus be a less profitable customer. It’s all about the money.

The primary difference between banking and insurance is that insurance policies are all secured, essentially. If you don’t pay your premiums they’ll cut you off, which could lead to you losing your home (it’s called a non-monetary default) or you getting arrested for driving without insurance. Determining whether or not you’ll pay your premiums is not the primary reason some of them pull your credit reports and credit scores.

The primary reason is to determine if they even want to do business with you and/or under what terms. Despite what many believe, how you manage your credit is very predictive of what kind of insurance customer you’ll be. It’s predictive not only of your likelihood of filing claims but also predictive of how profitable you’ll be. If it weren’t, insurance companies wouldn’t spend the money buying millions of credit reports and scores each year.

They’re Not The Same Credit Scores

Much like the financial services environment, the insurance environment relies heavily on credit scores. This isn’t anything new. However, the type of score they’re using is not the same type of score banks and other financial services companies use. In fact, they’re very different.

The scores used by insurance companies are called Insurance Credit Bureau Scores or Insurance Risk Credit Scores. They are developed by a variety of companies, including FICO and LexisNexis.  LexisNexis develops the LexisNexis Attract Score, which is very commonly used by insurance companies.

Insurance scores consider credit information and/or previous insurance claim information. So, if you filed an auto claim or a homeowner’s claim it can be considered in your insurance score and it can result in a lower score. And if you’re assuming the presence of claims means that you’re a less profitable insurance customer, well, you’d be right. Yes, it’s all about the money.

But They’re The Same Credit Reports

While the scores used by insurance companies are different, the reports they use are the same as the reports used by financial services companies.  The reason: all credit reports originate from the same three places; Equifax, Experian and TransUnion. Point being, there are no secret credit reports that insurance companies use to set your premiums.

Insurance Inquiries Don’t Hurt Your Credit Scores

Enough bad news. When you apply for insurance, the insurance company may or may not access your credit reports and scores. There is no guarantee that they will, in fact, pull your credit reports. But, it’s a safe bet.

If the insurance company does choose to access your credit report and score, there will an inquiry posted to the credit file.  It will clearly be identified as being from your insurance company.  And, more importantly, it will systemically be coded as coming from an insurance company.  This is good news because insurance related inquiries are not counted in your credit scores.

You will be able to see them, but no other entity will be able to see them.  And, credit-scoring systems don’t not consider insurance-related inquiries so they’ll never lower your credit scores.

I’ll end on that high note.

By John Ulzheimer here

http://www.mint.com/blog/how-to/insurance-credit-score-03072011/

Seven Ways To Defend a Debt Collection Lawsuit

September 18, 2014 by · Leave a Comment 

Seven Ways To Defend a Debt Collection Lawsuit

What happens when you are sued by a debt collector? While it may feel like the end of the world to you, it’s a pretty routine occurrence in courts across the country. “Most debt collection law firms file hundreds of lawsuits a day, assuming that 99% of defendants will not answer,” explains Atlanta bankruptcy attorney Jonathan Ginsberg.
While it would be easy to dismiss these as simply a matter of debtors getting what they deserve, it’s not always cut and dried. It’s not unheard of for a debtor to be hounded by multiple collection agencies for the same debt. Or “zombie debts” may show up in court years after the debtor defaulted.

A recent New York Times story compared the recent spate of debt collection “robo-lawsuits” to the “robo-signing” mess in the mortgage industry and quoted Brooklyn Civil Court Judge Noach Dear as saying, “roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.” Judge Dear says he sees as many as 100 of these cases a day.

Even when debts are legitimate, the additional costs that result from a lawsuit can make it that much harder for the borrower to resolve the debt.

So what can you do if you are sued by a collection agency? Here are seven options:

#1 Respond.
The number one mistake borrowers make when they are sued for a debt is failing to respond to the notice, which usually arrives in the form of a “summons and complaint.” If you owe the debt and can’t pay it, then you may assume there’s not much you can do. If you fail to respond, however, the collection agency will get a default judgment against you. That opens up new avenues of collection for them, including wage garnishment or the ability to take money from your bank account, depending on state law. Worse, the collector may be able to add attorney’s fees, court costs, or interest to the balance. In some cases, the balance can double or triple due to these additional costs.
Responding to a debt collection lawsuit, then, is a must. “Even if you owe the plaintiff money, a two-sentence response denying liability to the lawsuit filed in court will likely lead to a negotiated settlement that will save you money,” advises Ginsberg. “If you do respond and force them to work, they will either back down or offer a settlement on favorable terms.” He adds that it is not sufficient to simply send a letter to the plaintiff (the person bringing the lawsuit). “You must file your response to the lawsuit, called an “Answer,” in the court where you were sued within the designated time to respond — usually 20 to 30 days after service — and you must send a file stamped copy of your answer to the plaintiff’s lawyer.” You can get a file stamped copy from the court where you filed the answer.

When you do respond, don’t just state that you can’t afford to pay the debt. “If you admit liability then 90% of the fight is over and they are not forced to prove their case,” warns Billy Howard, attorney and head of the consumer protection division of Morgan & Morgan. He likens it to a criminal case where the defendant says, “I did it!”

#2 Challenge the lawsuit.
“Challenge the plaintiff’s ability to bring the lawsuit by challenging their standing to sue in their own name,” suggests Ohio consumer lawyer Troy Doucet. He explains that credit card debt is often bought for pennies on the dollar, by collection agencies, which then sue to collect. “The collection company needs to prove they have the right to collect, as evidenced by a transfer of the signed credit card agreement, in order to be in court and ask the court to win. The right to sue is called ‘standing’ and what the consumer should challenge.”

Howard agrees: “Ask the court to dismiss the case because they don’t have standing and lack the chain of custody of paperwork. A lot of judges look at the paperwork (collectors provide) and tell the plaintiff that they must be joking.”

#3 Make them prove what you owe.
“We always demand to see the original signed agreement and a balance on the account from zero to the present,” says Ginsberg. More often than not, the debt collector’s documentation will be inadequate. Debts may have changed hands multiple times before the current collection agency purchased them.

Even original creditors may lack accurate documentation of the debts customers owed. A former employee of JP Morgan Chase says she was fired after she raised questions about the documentation being provided to buyers of the issuer’s delinquent debts. She alleged that as many as a quarter of the files showed incorrect amounts owed, with errors often in the bank’s favor. If credit card issuers can’t provide accurate documentation, there’s a good possibility collection agencies won’t have it either.

#4 Raise the statute of limitations as a defense.
In most states, creditors have a maximum of four to six years to sue to collect a debt. After that, the statute of limitations expires. That doesn’t always stop collectors from suing, however, because they are counting on borrowers failing to show up in court. If the statute of limitations has expired, and the borrower raises that as a defense, the collector will lose. Making a payment on an old debt may start the clock ticking all over again, though, so a debtor should get legal advice before making a payment on a very old debt.

#5 Sue them back.
If a debt collector has violated provisions of the Fair Debt Collection Practices Act, you may be able to sue them. “Once you attach their lawsuit as Exhibit A to your lawsuit against them the tide turns, and if you or your attorney knows what they are doing, the alleged debtors can get damages and attorney’s fees and costs,” says Howard. He’s referring to the fact that consumers who successfully sue for violations of the FDCPA are entitled to statutory damages of $1000, plus punitive and economic damages, if awarded. In addition, the collection agency will be required to pay the attorney’s fees and costs.

#6 Bring in the big guns.
Debtors often hesitate to contact an attorney when they are being sued over a debt they owe; perhaps due to embarrassment, or maybe they figure they can’t afford one. Attorneys who regularly take on these types of cases, however, will typically offer a free consultation. And they will often represent a consumer for free if they think the collector has broken the law. That’s because they will expect to collect their fees from the plaintiff. “Do not be afraid or intimidated to call or email a consumer protection or bankruptcy lawyer for a quick word of advice,” Ginsberg says.
Once the collection agency is notified that you are represented by an attorney, it may be much more amenable to settling the debt, rather than trying to duke it out in court.

#7 File for bankruptcy.
While bankruptcy usually doesn’t make sense when you just owe a small amount of money, if the debt you are being sued for is large or if it is just one of many other debts you owe, it may make sense to file for bankruptcy. When you do, you will be protected by the “automatic stay,” which will halt collection efforts against you.

A tip: If you are thinking about bankruptcy, it’s best to talk with an attorney as soon as you are served with notice of the lawsuit, rather than waiting until the day you’re due in court.

by Gerri Detweiler
for http://www.credit.com/blog/2012/09/seven-ways-to-defend-a-debt-collection-lawsuit/

Mapping the Path to Your Credit Report

September 17, 2014 by · Leave a Comment 

 

Wonder how your credit report is created? Sometimes it’s best not to know how the sausage is made, but in this case some extra knowledge may be enlightening.

John Ulzheimer, a credit expert, worked with the Web site Credit Sesame to create a graphic map showing how various types of information make their way — or not — into your credit report.

In most cases, Mr. Ulzheimer said,  the credit bureaus — like Equifax, Experian and Transunion — receive information from institutions where you have accounts, like credit card issuers or home loans or student loan lenders. In industry lingo, these are known as “trade” or “tradeline” accounts, he said.

Those accounts make up the bulk of the information in your credit report. Institutions provide the data under agreement with the bureaus, in exchange for access to credit files so they can evaluate the creditworthiness of applicants. Institutions aren’t legally required to report credit information — but if they don’t, they lose the benefit of having access to credit reports.

When credit bureaus get customer data, he said, they generally audit it before posting it to your credit file, to help avoid errors and disputes. A batch of data with an unusually high proportion of delinquencies, for instance, might be sent back for double-checking.

When lenders seek your credit report in response to an application for a credit card or a loan, it shows up as a “hard” inquiry. Too many such inquiries may cause your credit score, which is based on information in your credit report, to dip.

Some inquiries don’t affect your score, however. They include requests made as a result of applying for insurance or for service from a utility company, Mr. Ulzheimer said, and requests you make yourself for a copy of your credit report.

Some public records, like bankruptcy filings or federal tax liens, usually appear on your credit reports because the credit bureaus have electronic access to federal courts through the Pacer document system. But civil judgments filed with state and county courts may or may not show up on your report, since not all of those courts make such information available electronically. Credit bureaus may be able to find the information through database services, but its appearance in credit files is generally less consistent than legal information generated by federal courts. (In other words,  you may get lucky.)

Have you ever had a legal judgment appear on your credit report? What impact did it have?

By ANN CARRNS

For Credit Sesame

 

Life After Bankruptcy: 5 Steps for a Newer, Healthier YOU!

September 16, 2014 by · Leave a Comment 

Life After BK
Life After Bankruptcy: 5 Steps to Rebuilding Your Credit, Finances and Emotions

Rebuilding your life after bankruptcy – including your credit rating, finances and your emotional well-being – can sometimes seem like an overwhelming task.

But if you’ve recently filed for Chapter 7 or Chapter 13 bankruptcy protection, it’s important to realize that there is life after bankruptcy. And it doesn’t have to be a life where you’re treated like a financial outcast and banished to years of credit exile.

On the contrary, life after bankruptcy can be enormously rewarding – but only for those who strategize properly and commit themselves to not wasting the second chance that bankruptcy can offer. Ultimately, how well you rebound from a bankruptcy filing depends on the post-bankruptcy steps you take to safeguard yourself against future financial calamities.Here are five steps to speed up your recovery after bankruptcy – and help you get on with the business of living life well without the stigma of the bankruptcy process.

Let Go of the Guilt and Shame

If you’ve gone through bankruptcy – or are contemplating it – you’re certainly not alone. In 2010, personal bankruptcies in the U.S. rose by 9% to 1.53 million filings. Also, a May 2011 survey from FindLaw.com revealed that one in eight adults in the U.S. – 13% of the population – admit they’ve considered bankruptcy. These sobering statistics are telltale signs that many Americans are still battling the lingering affects of the Great Recession.

Nevertheless, people who’ve filed for bankruptcy protection are often wracked by guilt and shame. It’s not uncommon for bankruptcy filers to say things like “I feel like a failure” or “I’m so disappointed in myself.”

But beating yourself up about your predicament won’t make your situation any better. In fact, succumbing to a steady stream of negative emotions about your bankruptcy can even be harmful to you by preventing you from moving forward in a positive way.

A better strategy: Resolve to make peace with the past by letting it go, and don’t dwell on negative thoughts or wallow in self-pity.

“Sometimes things just happen,” says James Feazell, who has counseled scores of financially challenged consumers over the years in his role as vice president of education at the National Foundation for Debt Management in Clearwater, Fla.

Feazell notes that job loss, divorce, medical bills and other personal setbacks can drive people into excessive debt and force them to declare bankruptcy. “So the challenge now is to adopt the right attitude,” says Feazell. “You have to get yourself mentally back in the right place where you can become more disciplined and better educated, and where you can learn from life and not make the same mistakes.”

Reflect and Regroup

How do you get to a healthier place emotionally if you’re disappointed about the past and perhaps experiencing regrets about choices you made?

Once the dust has settled after your bankruptcy, do some soul searching, recommends Chris Bridges, owner of Vision Credit Services LLC in the Washington D.C. metropolitan area.

“You really need to ask yourself several key questions,” Bridges says, “including ‘How did I get here? What could I have done differently? And what have I learned from all of this?’ ” Your answers will help you create a better financial afterlife in the wake of bankruptcy.

Additionally, enlist a great support system, Feazell suggests. “Friends, family, your church or members of civic organizations can all provide you with an emotional charge when you need it, or even just a shoulder to lean on,” he says.

It’s important to have the right people around you, Feazell adds, because “positive people who are in your corner, telling you that you can overcome this, can help you deal with all the bumps, plateaus and valleys you may experience after bankruptcy.”

Create a Realistic Budget and Pay All Your Existing Bills on Time

After a bankruptcy, you must become extra vigilant about your finances. Even if you’ve never created – or stuck to – a budget in the past, now is the time to get serious about doing so. Your budget will act as your spending plan, helping you to manage cash flow and preventing you from racking up unnecessary debt.

“Understanding your budget means you try to live below your means and stop keeping up with the Joneses,” says Dawn Brown, a certified financial planner and senior financial advisor with Altfest Personal Wealth Management in New York City. “Your budget should also have a line for saving, so you can pay yourself first.”

Brown and other experts say having an emergency fund is vital to deal with future emergencies or unexpected events that can derail even the best of budgets.

Also, make it a priority to pay all your current bills in a timely manner. Set up automatic bill payments, and remember to pay your rent on time since rent payments are now being tracked by the credit bureau Experian and will affect your credit score.

Repaying your existing bills as agreed will be one of the single, most powerful things you can do to restore your finances and your credit, according to Bridges, who has also written the free e-book Your First Step to Credit Restoration.

If you can’t pay everything that’s due, says Bill Hardekopf, CEO of LowCards.com, “prioritize your expenses. Pay the ones necessary for survival first, such as food, housing and utilities. This also helps protect your credit score, because a missed mortgage payment can hurt your credit score.”

Pick a Credit Card That Will Help You Rebuild Credit

Experts agree that another key strategy to rebuilding your credit rating after bankruptcy is to obtain a secured credit card. With a secured card, you deposit a given amount of money, such as $500, into a bank account and that $500 becomes your credit limit. By charging small amounts each month and repaying your debts as agreed, you can gradually rebuild your credit.

“Some of these (secured) cards will reward responsible borrowers by upping the limit without an additional deposit,” Bridges says. “Some will even convert the account into a traditional credit card.”

A few caveats about secured cards: First, recognize that at some banks, not everyone qualifies for a secured card, particularly if your bankruptcy is less than a year old. Also, stay away from secured cards that charge high fees, that don’t report your payment history to the credit bureaus, or that ask you to call a 900 number (you’ll be charged for the call).

Separate Fact From Fiction About Bankruptcy

Bankruptcy filers are often force-fed a host of myths and misconceptions about how horrible their lives will be in the wake of a bankruptcy proceeding. While life after bankruptcy certainly won’t be a cakewalk, unfortunately, much of the information doled out is flat out wrong, according to credit experts as well as people who’ve successfully and quickly bounced back from a bankruptcy filing.

First, there’s the incorrect notion that bankruptcy will automatically disqualify you from getting a mortgage for at least 10 years. Wrong! You can actually be in the middle of a Chapter 13 bankruptcy proceeding and still get an FHA home loan.

There’s also the false assertion that getting a credit card will be next to impossible for at least seven years. But this is untrue as well: Most bankruptcy filers receive a slew of credit card offers from banks almost immediately after their bankruptcy is discharged. One study showed that 96% of consumers were offered new credit within a year of declaring bankruptcy.

And then there’s the wrong-headed idea that car dealers and lenders will only approve your application at sky-high interest rates. Not so. As many people who’ve gone through bankruptcy will attest, there are numerous auto companies and lenders willing to finance a vehicle or approve loans at reasonable rates after a bankruptcy.

And while it’s true that bankruptcy will remain on your credit report for up to 10 years, it’s definitely not the case that it will take a decade to re-establish a positive credit rating. In fact, many people’s worst credit problems – even bankruptcy – are often not as bad as they think.

“Because credit scoring models typically lend more weight to your recent activity than to the mistakes you’ve made in the past, you can change your habits right now and begin reestablishing yourself as a good credit risk for a purchase or refinance loan in just six to 12 months,” says Bridges, who offers free credit report consultations to consumers.

FICO credit scores range from 300 to 850 points. Roughly six months after a bankruptcy is discharged, Bridges notes, “it’s not uncommon for people to see their credit scores skyrocket up into the 700s, if they have absolutely no late payments or collections” following the bankruptcy.

On the other hand, says Bridges, “if you do have a late payment or a collection following bankruptcy, you get dinged double by the credit scoring system, because it’s like: Didn’t you learn your lesson?”

 

By Lynnette Khalfani-Cox

http://www.dailyfinance.com/2011/06/03/life-after-bankruptcy-5-steps-to-rebuilding-your-credit-financ/

Legally, how long can bad credit stay on your credit reports?

September 15, 2014 by · Leave a Comment 


Let’s say you’ve made some mistakes with your credit. With over 35% of the population scoring below 650 on the FICO scoring scale, you’re certainly not alone. But now that you’ve made the mistake, how long are you going to have to live with it?
Each and every negative item has a reportable statute of limitations. That means the credit bureaus can legally report it for some period of time before it must be removed. Let’s dive in…
Bankruptcy
This one has possibly the most confusing statute of limitations so let’s get it out of the way first. Chapter 7 bankruptcies can remain on your credit files for ten years from the date filed. Chapter 13 bankruptcies can remain on file for seven years FROM THE DISCHARGE DATE. This is important because most people believe 13s have to be removed seven years from the filing date, which is incorrect. It normally takes three to five years for a Chapter 13 to discharge due to the repayment process. That’s when the 7 years begins. The cap on all bankruptcies is ten years so most 13s remain on file for a full ten years, just like Chapter 7s.
Tax Liens
This one has the longest statute of limitations and must be broken down into three categories; released, unpaid, withdrawn.
Released Tax Liens – Released liens can remain on file for seven years from the date released. This included liens that have been settled for less than you really owe.
Unpaid Tax Liens – Sit down. Unpaid tax liens can remain on your credit file indefinitely. That’s the bad news. Now the good news…
Paid and Withdrawn Tax Liens – Paid tax liens normally stay on file for seven years, but the IRS announced that they will withdraw the lien if paid in full AND the taxpayer requests a withdrawal. The credit bureaus do not report withdrawn tax liens so they will come off your files almost immediately if you get them withdrawn.
Defaulted Government Guaranteed Student Loans
The amount of time is actually governed by the Higher Education Act instead of the FCRA. Defaulted student loans can remain on your credit reports for 7 years from the date they are paid, 7 years from the date they were first reported or 7 years from the date the loan re-defaults. The point you should take away from this…pay your student loans!
The Seven Year Club
Delinquent Child Support Obligations
Judgments – Seven years from the filing date whether satisfied or not.
Collections – Seven years from date of default with the ORIGINAL creditor, not seven years from when the collection agency buys or is consigned the debt.
Charge Offs – Seven years from the date of the original terminal delinquency.
Settlements – Seven years from the date of the original terminal delinquency
Repossessions and Foreclosures – Seven years from the date of the original terminal delinquency.
Late Payments – Seven years from the date of occurrence.
You’ll notice “terminal delinquency” several times above. The seven year period actually begins 180 days AFTER the original delinquency that leads to a collection, charge off or similarly negative action. So, technically these items remain on your credit file for 7.5 years from the date of the last delinquency before the terminal delinquency.
Re-aging
If you’ve never heard of this term let’s hope you never do. Re-aging is the illegal process of changing the “purge from date” so the credit reporting extends past the allowable period of time. This is not common but when it’s done, it’s usually a collection agency or debt buyer who is breaking the law. It’s a clear violation of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act but the debtor has to know it has happened.

 

DIY Credit Repair or Hire a Pro?

September 12, 2014 by · 1 Comment 

DIY Credit Repair

Should you DIY credit repair?

5 Biggest Mistakes People Make in Fixing their Own Credit

  1. Putting it off. Repairing your credit takes time; there is no “quick fix”. So putting it off until you have the time or the money only creates more excuses. Here’s a simple equation that may hit close to home:
    debt + interest = more debt
    more debt + time = hard times
    The longer you wait, the worse everything will get: debt, stress, life in general. Do what you have to do to get started even if it means temporary discomfort. Get your credit ready now for buying power later.
  2. Closing credit card accounts. Many people will close credit card accounts in an attempt to detour temptation. Some people may even believe that closing credit card accounts will improve their credit score. Remember, a large portion of your scores are based on how well you manage open credit accounts. So, when you close these accounts, your open credit will be in the main spotlight. This will mean any unpaid derogatory account too.
  3. Disputing items online. It may seem convenient, it may seem easier, but never do this! You will not have any written records of your dispute. You will not be able to send documentation backing up your dispute. In addition, you are giving the credit bureaus an additional 15 days to verify your information.
  4. Failing to document your efforts. The credit bureaus must respond to you within 30 days or the item must come off. If you don’t keep track of when the time is up, you are missing an important advantage. Keep track of when you send and receive letters. Keep track of any and all communication.
  5. Giving up. The process seems overwhelming at first, especially if you are new to the credit repair process. This is where many people just throw in the towel and feel as though it is impossible to do. Insert motivational speech here ___. Just stick with it.
    All in all, everything a credit repair company does, you can do on your own. You should know this and understand this. There are many occupations you can compare this to:
    A Tax Preparer: There is software available. Books& classes too. But, what are the consequences of getting it wrong? YikesA Mechanic: The tools and knowledge are out there. Do you want to get dirty? Do you have the time and patience?A Dentist: Yes, you can pull out your own tooth, but…OUCH!

Finally, I have come across many people in the mortgage industry who will try and do this for you. Usually, they have you pay down a credit card, get a balance letter and rescore that, which works great. I am not knocking that, it’s the more in depth items that they will try and tackle just to end up calling a professional in when it may be too late. Let them do what they are good at; closing your loan. Call a professional in, even if it’s just for advice. Elite Financial does have a program to help the do-it-yourselfer.
As always, we are here to help with a Free Credit Report Analysis and a full line of services to help remove negative information and increase credit scores for both personal AND business files.

CONTACT US RIGHT NOW FOR YOUR DIY HELP!
info@elitefinancialllc.com
(909) 570-9048

5 Cures for a High Doctor Bill

September 11, 2014 by · Leave a Comment 

5 Cures for a High Doctor Bill

Just as the health-care system prepares for an influx of newly insured patients, some consumers are facing hefty doctor bills that they weren’t expecting.

As the Wall Street Journal reported this week, the higher costs reflect a bigger trend in medicine. As more hospitals buy up private physician practices, they’re often able to charge higher rates than those doctors’ offices formerly charged—sometimes more than twice as much for the same procedures. Since insurance plans typically cover a fixed percentage of a doctor’s bill, the patients’ out-of-pocket costs often go up as the total bill gets higher.

It’s an awkward situation that can leave patients at odds with both their doctors and the insurance company. But experts say there are options for sticker-shocked patients besides paying the full bill.

Bargain it Down

In the case of a surprisingly high tab for medical work, patients should approach their doctor, says Matthew Tassey, principal of Scribner Insurance and former chairman of the Life and Health Insurance Foundation for Education. When a patient explains that he or she can’t afford to pay a bill, the doctor or hospital is likely to work out a payment plan; the care provider might also reduce its fees, by charging the patient the in-network rate for an out-of-network service, for example. From the doctor’s perspective, even a partial payment can be better than a non-payment or a long dispute. “It’s much less time consuming and aggravating if you can make a deal to pay half of it in cash,” Tassey says. The first step is visiting the doctor’s office manager or the hospital’s finance office and asking to speak with your doctor. Even if lowering the fee isn’t at the doctor’s discretion, “You need an ally on the inside,” Tassey says. “If you can help that doctor be your advocate, you have a much, much higher success rate at getting the bill reduced.”

Review Your Bill

Insurance experts say that as the medical billing system becomes increasingly automated, billing mistakes are common—and if the doctor’s visit is coded incorrectly, the insurance provider might refuse to reimburse it. The bill can clue the patient in to why the insurer did not pay for the procedure, which could help in an appeals process. Many insurance companies also allow patients to track their bill’s processing online and find out if the insurer has paid it yet.

Appeal

In some cases, an insurance company may refuse to pay some or all of what the doctor or hospital charges, leaving the patient on the hook for even more of the bill. The Affordable Care Act strengthened consumers’ ability to appeal their insurance companies’ reimbursement decisions by requiring an external appeals process through an independent review body, in addition to the internal appeals process that insurers already offered. To appeal, patients have to illustrate why the medical care was necessary or why the insurance plan’s guidelines are outdated. Again, it helps to talk to your doctor first, says Cheryl Fish-Parcham, deputy director of health policy for Families USA, a consumer health advocacy organization: “You definitely need medical evidence to be successful,” says Fish-Parcham.

Get Help Negotiating

Many states now offer so-called consumer assistance programs, funded by grants through the Affordable Care Act, to help people navigate health insurance headaches, including filing appeals with insurance providers. In their first year, the consumer assistance programs recovered more than $18 million for consumers, according to the Department of Health and Human Services. In states that don’t have one of the programs, patients can hire independent health care advocates to help guide them through the appeals process or negotiate with medical providers.

Shop Around

To prevent a future sticker-shock situation, experts advise staying in network whenever possible. If time permits, they add, it’s also worth asking your doctor how much a procedure will cost and if it would be cheaper to get it elsewhere—shopping around can save hundreds of dollars.

By Jen Wieczner

Smart Money Article

http://blogs.smartmoney.com/advice/2012/08/28/5-cures-for-a-high-doctor-bill/?link=SM_home_blogsum

A bad credit score could cost you a job

September 10, 2014 by · Leave a Comment 

I saw this on the web few days ago.
Cesar

Post image for A bad credit score could cost you a job

As a Senate committee considers bill HR 3149 which would make it illegal for employers to use personal credit reports in the hiring process for most positions, more focus has been directed at the way employers currently use credit data when hiring applicants.

Almost half of employers today are doing consumer credit checks along with background checks as part of their employment screenings according data considered by the House Subcommittee on Financial Institutions and Consumer Credit.  The Society for Human Resource Management data shows that only 13% of employers look at credit scores for all job applicants, while 47% consider it when a candidate is being considered for a position that requires handling money.

The items on a credit report which are most likely to affect your chance at getting a job are pending debt lawsuits and having accounts in debt collection.   Foreclosures and medical debt are least likely to prevent you from getting a job.

by Vanessa Price on October 12, 2010

Never Dispute Online

September 9, 2014 by · 1 Comment 

 

In my daily grind, I come across many real estate professionals trying to lend a helping hand to their clients in helping with credit issues. In some cases it can be considered as “minor” work. But for most, I find that they prefer using the online websites for generating a dispute to the credit bureaus. This is a Big NO-NO!  For several reasons detailed below, this online dispute does very little to help you out. Not to mention most real estate professionals, unfortunately, are handling the dispute process incorrectly to begin with. But when  they do go beyond their scope of expertise, the following usually happens;

1)      Time – The credit reporting agencies do not have to process an online request. The online dispute gets tracked automatically and a request to verify is automatically forwarded to the data furnisher through e-oscar. The restrictive 30 day clock is accomplished easier if everything is automated.

2)      Paper trail- with online disputes there is no paper trail to evidence the details of the dispute, and creating a paper trail during credit repair is essential.

3)      Limited Dispute Reasons- With the limitations of dispute reasons, an accurate description of the dispute is difficult in most cases. It will all get broken down to its most simple form.

4)      Expeditious Dispute Resolution- The Fair Credit Reporting Act section 611a(8) changes the standard requirements and protection afforded to the consumer by the FCRA.

When the Fair Credit Reporting Act was amended, they put in a section for “Expedited Dispute Resolution” Section 611a(8) the on-line dispute system. It reads as follows…

“…the agency shall not be required to comply with paragraphs 2, 6 and 7 with respect to that dispute if they delete the tradeline within 3 days.”

Paragraph 2 requires the CRA to forward your dispute and all related documentation you provide to the furnisher. They rarely forward the documentation.

Paragraph 6 requires the CRA to provide you with written results of the investigation.

Paragraph 7 requires the CRA to provide you with the method of verification on request from the consumer.

What they are doing is…

The Credit Reporting Agency (CRA) can delete a disputed trade line for 30 days, then, the trade line can reappear when the furnisher (creditor or collector) reports it again in the next cycle. That is because the CRA is not required to tell the furnisher you disputed it thanks to section 2 being omitted.  This is sometimes called a “soft delete” and it is not permanent.

Furthermore, you lose your rights to request “Method of Verification” (MOV) so you lose this powerful tool in the dispute process thanks to Paragraph 7 being omitted.

Finally, another powerful tool we use often is the five-day written notice of re-insertion.  Essentially, what that means is that if a credit bureau is going to re-insert a previously deleted item, they must inform you in writing five days prior to re-inserting it. I have rarely ever seen them give that notice.

That five-day notice is only required if the credit bureau takes longer then 45 days to complete. IF it is deleted via the expedited system, often completed in three days, the five-day written notice is no longer required.

 

So, let’s let the experts handle their own respective expertise and call a professional credit repair company when help is needed.

Credit Score Recovery…Post Foreclosure

August 29, 2014 by · Leave a Comment 

Credit Score Recovery…

POST Foreclosure

Wondering how long it will take your credit score to recover from a home foreclosure or short sale? That depends on how good your credit was in the first place, says John Ulzheimer, a credit score  expert who blogs on the subject for mint.com.

Somewhat depressingly, the better your credit score was before your mortgage woes started, the longer it will take you to recover. Citing data from credit reporting firm FICO, Mr. Ulzheimer said it would take roughly three years for a consumer with a 680 FICO to recover to that level after a foreclosure, compared with seven years for someone with a 780 score. That’s because high scores require “pristine” credit files, he said, while a middling 680 doesn’t.

Late mortgage payments follow the same pattern. A person with a 680 score who pays 30 days late can bounce back to that level in about six months, compared with three years for someone with a 780 score. His (somewhat obvious) advice? Don’t miss payments.

This is where we can help. Want to get back to that status from earlier? Simply contact us for information on how to get your credit life back on track.

By Cesar Marrufo
ELITE FINANCIAL, LLC
Cesar is an expert in the credit repair field, with over 10 years experience reading and analyzing credit reports. For more information or for help with your credit, visit www.elitefinancialllc.com or call (909) 570-9048