Payday Loan Scams Revealed

Credit.com has always been avid in warning people about fraud and phony payday loans and finally their efforts have been fruitful. The Federal Trade Commission has been successful in their court hearing last February in closing a $5 million payday loan company who used threats on American citizens, forcing them to pay loans that do not even exist.

This payday loan scam was aired in ABC News, and their modus operandi was revealed to the public. These criminals are usually working in India pretending to be call center agents from debt collecting companies. The payments that the victims make are received by a center in California that is owned by a Kirit-Pate a half Indian, half American citizen who is allegedly one of the leaders of the scams.

However, there seems to be no end to the schemes of these fake debt collection companies for just a few months after the FTC won the case hearing, the phone calls are starting to emerge again, pesteringinnocent citizens.

This scam includes sending threatening emails or messages to a person and his entire family, they require a deadline from their “customers” and they make sure they take advantage of them by making them think they are going to be in serious trouble with the law if they fail to meet the deadline that they imposed. What is worse is that these scammers would often claim to be a legal officer working for the government.

To avoid being a victim of these crooks, here are some things you need to bear in mind:

First, the FTC and Credit.com says that most of the scammers who might call you have obvious Indian accents. Their names may also sound very American.

Second, the callers often claim to be from a company that sounds official or a branch of a court, however if you really check the names of the companies, they do not exist.

Third, these fake debt collectors would pressure you to pay the loan immediately and would insist you would be legally accountable if you do not.

To be safe from being taken advantage of these criminals, you should always put this in mind: never give into intimidation. Loan collectors cannot get you arrested, they cannot call your boss or your friends or anyone from your family to make you pay fake debts. Their only option is to get into your head and get you to do what they want.

Rise in Student Loan Delinquencies Pushes Colleges to Act

College education is a privilege only a few can obtain, and for people like Mercadi Crawford who is only raised by a single parent, getting the money to go to a university would require student loaning. Ms. Crawford is the only person in her family who graduated from high school, and is also the only one in her family to go to college.

She admits she had no idea about the complications of student loaning when she first applied to go to the Texas Southern University. But if there was one thing she did know, it is that she would need to get a loan in order to afford her tuition in college.

But unlike other students like her, she first sought to understand the terms and conditions she would be subjected to when she applies for student loaning. She applied for the school’s financial literacy lessons and she kept her loans low at $10,000.

She says that knowing the money would come with a price, she tried not to borrow much more than she needed. Texas State University is one of the few colleges that offer this kind of program to educate students about the risks and consequences of student loaning.

Some of the topics that are included in the curriculum are Budgeting and Building Credit as a College Student and Managing Your Student Loan. Rice University offers online courses in budgeting, financial planning and student loan payment.

There are also courses that teach freshmen college students how to deal with bad credit and some schools are even hiring personnel to aid students in speeding up their loan payments.

Student loan debt has succeeded the amount of debt people have in their credit cards. In fact, two thirds of seniors in universities have left their colleges with a debt of $25,250 this is five percent more than 2009 according to Project Student Debt.

The unemployment rate for that year has also increased by 9.1 percent, higher than it ever was. DelisaFalks, the executive director of scholarships and financial aids in Texas A and M University says that students ought to be taught how to loan wisely.

In their program, the students are required to fill up an online calculator that estimates their monthly payments for the future.

These safety precautions that colleges are taking are very much necessary to save the nation and its citizens from slipping further into the havoc of debt.

Getting a New Car Despite Low Credit

Getting your hands on a brand new car is now easier if you are an auto manufacturer’s employee or if you have relatives or friends that do. According to Auto Credit Express, there are plenty of car discounts you could take advantage of even if your credit status is not so brilliant.

Auto Credit Express is adept in these kinds of discount transactions because they have been a strong aid in providing automobile buyers with tainted credit. In fact, their website includes a section that answers most asked questions that consumers have about online car loans bad credit, and they have been at it for about 20 years now.

The cost of new cars are very expensive nowadays that people with less than average credit tend to settle for second hand cars with low interest rates. Unfortunately for them, they had no clue that they could apply for an automobile loan for a new car that would cost them as much.

You can apply for the A-plan, S-plan or X-plan if you are a Ford employee, or if you are a retired employee or a friend of a retired or currently employed Ford employee. If you or your friend is a current Chrysler employee, or if you are retired or you work for one of its suppliers you can avail the Employee Advantage employee purchase, friends program or the affiliate company program. The GMO or GMS is available for GM employees or their retired employees, you can also avail the discount if you are from one of its preferred supplier company or a friend of an employee from that company.

Most of the time, car buyers are allowed to get a discount of the price of a new car for an even bigger saving for the purchase, however even if you qualify for the program, that does not mean you can use the discount you earned.

Sometimes, you have to follow loan approval guidelines you must follow. The lender will be the one to determine your budget for the car, and the interest rate you will have. It is then up to the deal which cars you can get. But then again, a new car is way better than being stuck with a second hand car loan deal.

Poor Credit Affects Auto and Home Insurance

The majority of consumers know that their credit history is affected by their payments on homes or cars, but only a few understand that it actually affects their insurance policies. Most companies that offer auto and home insurance use credit score as a factor in deciding whether to give out or renew an insurance policy, and the cost of premiums.

In the perspective of insurance companies, there is a relationship between credit scores claims. That is, more claims are filed by drivers and homeowners with bad credit histories than those with good credit histories.

Especially under the Fair Credit Reporting Act, insurers must inform their customers when something in their credit report rejects them of insurance, affects their rates to go up, or alters their coverage one way or another.

According to Bob Hartwig, president of the Insurance Information Institute in New York, low credit scores having a correlation with higher losses are supported by facts and are undeniable. In fact, using consumer credit has made it possible for insurers to price the risk of policies in a more accurate way. Moreover, it has also enable insurers to correctly price policies for risky drivers.

However, consumer advocates disagree with using credit reports in pricing insurance policies. According to them, the practice is unfavorable to those with low incomes and is unjust to those whose credit score might low due to difficulties like sickness, unemployment or divorce.

In addition, consumer advocates approximate that roughly one third of consumers know that insurance companies use their credit reports. Birny Birnbaum, executive director for the Center for Economic Justice, said that insurers do not take actions to inform consumers that their credit reports are being used.

All of these concerns show the significance of accurate credit reports. While errors and problems with credit reports can affect many aspects consumers’ lives, the greatest impact is in insurance.

Five Fallacies About Developing Credit

Having a good credit history is very important because it does not only affect your ability to borrow money but also another aspect of your life, which is employment. If you are currently studying college or starting your career, it is vital to know myths about credit as soon as possible. The following are five myths about building credit.

The first myth is if you don’t borrow money, you don’t need to build credit. Although you pay cash for college expenses, car, or clothes, credit is still needed for things such as insurance policies or employment. Credit can be a factor for the price that insurance companies will give you or credit history can influence employers to either hire or promote you.

The second myth is it is better to use your credit cards frequently. Having a high credit utilization ratio (CUR), a percentage of a limit that is used, can damage your credit score. According to FICO, it is better to keep your CUR less than 30 percent and a few credit experts even suggest a CUR of 10-15 percent.

The third myth is not using credit indicates that you have good credit. Contrary to belief, having small to zero credit history is almost having bad credit because banks have no basis for your worthiness. Start building your credit as soon as possible, and if you don’t have student loans or other credit accounts, ask a local bank to you assist you in building your credit.

The fourth myth is that demographics affect credit. Demographic data such as education, income, gender, race, or location does not affect your credit but your credit score. However, age might affect your credit to some extent because the age of your accounts also matter.

The fifth myth is that minor misbehaviors do not matter. While it’s undeniable that major delinquencies damage your credit more, minor ones can mess things up as well.