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Loan Shopping and Your Credit Score

Loan Shopping and Your Credit ScoreWhen financing big ticket items like a home or a car, loan shopping can help you find the best rates and options before striking a deal. However, you may be worried that multiple credit inquiries may send your credit score into a nose dive. Before you settle for the first loan you come across, learn more about loan shopping and your credit score to minimize the impact these credit inquiries can have.


Credit Inquiries and Your Credit Score

Multiple loan queries in a 14-day period only count as one inquiry when calculating your credit score.
When you apply for a loan or line of credit, a credit inquiry will be added to your credit report. This happens because the lender or creditor is checking your credit report and credit score to determine your risk factor when paying back the money you borrow. These credit checks are recorded as hard inquiries, and have a negative impact on your credit score.

Compare Mortgage Loan and Car Loan Rates within a Short Period


Although inquiries for mortgage loans and car loans are still marked as a hard inquiry, credit scoring models take certain inquiries – and the circumstances behind them – into account when calculating your three-digit number. Credit score calculations take the fact into consideration that you are likely to go loan shopping for the best rates, creating multiple credit inquiries on your credit report. That’s why car loan and mortgage loan queries within a 14-day period count only as one inquiry when it comes to calculating your credit score.

Loan Shopping Inquiries on Your Credit Report


Despite the fact that credit scoring models count credit inquires made within the same time period as one hard inquiry, each individual mortgage loan or car loan inquiry will remain separately on your credit report for a 25-month period. Even better news is that many credit score calculations typically only use the loan shopping inquiries for 12 months, and then they sit quietly until they age off of your credit report.

In short, when loan shopping, your credit score may be less affected by multiple credit inquiries when you time your mortgage loan or auto loan applications within a short period. However, it is still important to monitor your credit report while shopping for the best rates. Keeping tabs on which lenders are checking your credit report can help you stay on top of your credit activity and see how it affects your credit score along the way!

Alliance One: When the FDCPA Doesn’t Apply

Alliance OneGovernment debts do not fall under consumer protection laws – unpaid parking tickets, traffic fines, student loans, and other debts can crop up from time to time. However, if you are late paying the debt and it is turned over to Alliance One, you will likely have little recourse other than to deal with the collection agency.

This is because Alliance One often operates directly within the courthouse itself – meaning that you won’t be able to clear your record and get your driver’s license reinstated unless you deal with the collection agency. Partial payments are almost never accepted in this instance, so you could end up having to pay hundreds of dollars to get your driving privileges reinstated.

To be clear, Alliance One does not own the debt in these instances. More often than not, the local courts contract with Alliance One to have them handle all debt collection for the city. So what often happens is that the debt collection agency will oper
ate right inside the courthouse, and you will be directed there by all court personnel when you have past due payments.

Because government debt does not fall under the Fair Debt Collection Practices Act, it is perfectly legal for Alliance One to hold your driver’s license “hostage” until the total amount of the fines has been paid in full. Additionally, there are often penalty fees for late payment that increase the amount you are required to pay in order to have your license reinstated.

What to Do about Alliance One Debts

The best course of action when dealing with government debts is to work with the system – most states have payment plans for fines, or allow you to work off the debt in some other way if you just can’t afford to pay.

Once Alliance One is handling the debt, often the only recourse is to pay in full – however, you might still try speaking to someone at the DMV or courts about your particular situation to see if they can help.

What if the Debt Isn’t Mine?

If you are being held responsible for a parking ticket or traffic fine that does not belong to you, you don’t have to pay – even if the debt has gone to Alliance One or another collection agency. What you do need to do is get in touch with someone in the court system who can verify your claims.
Once you have been cleared of the debt, make sure it’s removed from your credit reports. File a dispute with the credit bureaus and supply a copy of any paperwork you have that clears your name. This should ensure that the Alliance Once collection account does not remain on your credit reports.


Alliance One is NOT Above the Law

Alliance One does handle some consumer debts – and we should be very clear, it is the type of debt you have, and not Alliance One, that determines whether or not the Fair Debt Collection Practices Act applies. If you have consumer debt of any kind that has been turned over to Alliance One, you are still afforded the same protections under the FDCPA, regardless of the collection agency that owns the debt.

In the case of consumer debt, don’t let Alliance One bully you into paying on a debt that you don’t owe. Take full advantage of the protections afforded under the law and dispute any unfair debt collection practices.



AFNI Inc. How to Avoid Unfair Debt Collection Practices

AFNI Inc.AFNI Inc. is one of the most well-known debt collection agencies in the United States and their debt collection practices have been anything but ethical in the past. If you’ve received a collection letter or telephone call from AFNI, you should be prepared to exercise your rights as a consumer to make sure that the debt in question is legitimate.

AFNI Inc. and Unfair Debt Collection Practices


In the past, AFNI Inc. has been convicted of many types of unscrupulous debt collection practices. They have attempted to collect debts that consumers did not owe, and they have attempted to collect debts with excessive (and illegal) fees added on to the original balance.

Because these debts are often many years old, unsuspecting consumers paid just to make the debt “go away” instead of standing up for their rights. Unfortunately, when people pay for debts that they don’t owe, it only encourages collection agencies like AFNI to continue their scamming efforts.

If possible, you should contact the original creditor directly in order to confirm or validate a debt. You should do this before admitting to owing any debt to AFNI or any other debt collector or collection agency. If the original creditor can’t validate the debt, chances are good that AFNI will not be able to do so either – and this means that you do not have to pay.

If you can’t get in touch with the original creditor, your first step in protecting your rights when contacted by AFNI Inc. is to request debt validation. Specifically, you want to send them a debt validation letter requesting that they validate the debt by providing specific information such as the account number, the amount owed, and any contracts that you signed with the original creditor.

Additionally, you should ask for proof that AFNI is authorized to collect the debt on the original creditor’s behalf – this is a good practice when dealing with any collection agency, but it is especially important when dealing companies like AFNI, who have already been found guilty of violating consumer rights and the Fair Debt Collection Practices Act (FDCPA).

AFNI Inc. – Protecting Yourself from Unscrupulous Debt Collection Agencies


If AFNI can’t provide proof that you owe the debt within 30 days and if they aren’t authorized to collect that debt, then legally they cannot place any derogatory information on your credit report. So your next step is to check all three of your credit reports (read more here) and dispute any negative information that AFNI has placed in your credit file.

You want to be certain that these negative items are removed as soon as possible – if AFNI confirms that the information is correct without providing you with any validation information, they are in violation of federal law and you should contact the FTC.

In general, if there is no debt validation, then the matter will end there. But what if AFNI does confirm that you owe the debt and they are authorized to collect? Well, the next step in that instance is to see whether or not they can legally collect the debt based on the age of the account.

Each state varies on the statute of limitations for collecting on a debt – anywhere from 4 to 7 years is typical. Once you know the statute of limitations on the debt, you will know if AFNI has any recourse to collecting the debt – if the statute of limitations is past, they cannot sue you, and if you request in writing that they stop contacting you about the debt, they must comply.

Additionally, debts past the reporting limit – typically 7 years for most debts – cannot legally be reported on your credit report. So be certain to watch any debts that may be past the statute of limitations for collecting the debt, but not past the reporting limit. You want to be sure those negative items are handled properly and removed after the required time has passed.

AFNI Inc. – Play it Safe


If you are easily intimidated by debt collection agencies, you may have better luck dealing with a professional credit repair agency that will speak with them on your behalf. In this way, you have a professional that knows every facet of consumer law working for you, and you no longer have to deal with harassing phone calls and letters.

Whichever approach works best for you, be sure to follow up consistently – collection agencies such as AFNI Inc. count on most consumers to be uneducated when it comes to their rights. By staying informed and working to be sure that the appropriate laws are upheld, you’ll never have to pay money for a debt that you don’t owe.

Are Credit Repair Lawyers Necessary?

Credit Repair AttorneyFor most consumers, choosing between credit repair lawyers and a credit repair service seems like too much work, especially when working with a reputable credit repair company is usually enough to help improve their credit scores. However, lawyers provide essential services to consumers who have had their rights violated by creditors and credit reporting companies.

For this week’s Fact Check, we look at what credit repair attorneys have to offer in comparison to credit repair companies, and what you should look for in choosing your own specialist lawyer to represent your case.

Credit Repair Lawyers: Do I Need One?


Myth: Credit repair companies and credit repair lawyers are interchangeable. Both offer the same services and benefits.

Fact: The biggest benefit to expert lawyers is that they can help you to recover money that you are owed as a result of violations in consumer law.

For example, if a debt collector threatens to sue you or garnish your wages as a scare tactic (or threatens to garnish wages in a state where that isn’t allowed) you could be owed monetary damages, if you sue the debt collector.

Lawyers help you to understand your rights in these instances, and can help you to build your case against unscrupulous debt collectors. Furthermore, they will often represent you in court “on contingency” – meaning that they don’t get paid unless they are able to recover money on your behalf.

Do They Really Make a Difference?


Myth: You don’t need a lawyer to recover damages for violations to your consumer rights. It’s easy to sue and win.

Fact:  Lawyers are experts in consumer law and in the inner workings of the court system. Unless you’ve spent a lot of time in litigation before, it’s best to have a lawyer to represent you.

Consumer laws are there for your protection, and there are consequences to debt collectors and credit reporting agencies if they don’t abide by those laws. However, most consumers aren’t aware of the nuances of those laws or what is required to provide proof of a violation.

Lawyers can help to clear up any misconceptions you might have. They’ll also be able to tell you exactly what you need to do in order to be able to prove your case in a court of law. Unscrupulous debt collectors will likely have no problem lying in court – and without proof it will just be your word against theirs.

However, most debt collection agencies don’t want to go up against professional credit repair lawyer and may decide to settle. Even if they don’t, if your case is solid, you can expect to recover damages as well as attorney’s fees, so you don’t need to worry about payment.

How Do I Choose?


Myth: Any lawyer can handle a case involving consumer credit law violations. There are only a few laws on the books about consumer protection, so I don’t really need a specialist.

Fact: No matter what kind of legal issue you face, it’s always better to have someone who specializes in that area, and consumer law is no exception.

Having a lawyer means not only having a specialist that understands consumer law as well as the precedent for how the laws have been applied in the past is essential. Even if only one or two laws apply to your case, lawyers will be able to tell you how courts have ruled in the past, what types of evidence are most likely to be accepted, and what you can expect in the court itself.

Choosing the right credit repair lawyer means finding one who:

  • Specializes in consumer law only
  • Is licensed to practice in your state
  • Has a reputation for successful case outcomes
  • Can offer to represent you on contingency
  • Keeps abreast of the latest changes in consumer credit laws

By putting together the right combination of skill, affordability and experience, you will have a better opportunity to recover monetary damages when debt collectors don’t abide by the rules. Credit repair lawyers, like Lexington Law Firm, may offer similar services to credit repair companies in some ways, but when it comes to litigation and recovering money you are owed, the difference is clear – lawyers are necessary and needed for your own protection.

Four Practical Debt Free Solutions

Four Practical Debt Free SolutionsIf you are in debt for many years,you should know that there is no easy way to reach debt free in a short time. It may take some time for you to become debt free and get your finances under control again. No one can tell the exactly time, maybe several months,or it may take several years, however, the good part is that if you keep reducing your debt step by step, you can clear off your debt.
Today I show you four effective ways to debt free: 

Getting yourself credit counseling

Once you decide to get your debt cleared off, finding credit counseling is an important step you should take.
In fact, you can find many credit counseling companies out there, like Sky Blue Credit, which are much willing to help you out. However,the service quality is different from company to company, before sign up with one company,you’d better look up them carefully.
So you need to compare both their debt free plan for you and the charge fees.You should follow those who offer you detailed debt free plans and those who charges your reasonable fees.Reports show that these companies are reliable.
If you know some professional credit counselors,it is also a good idea to ask them for suggestions. They may be able to offer you a good debt free plan at no or very little cost. So far as I know,some of nonprofit organizations and government agencies do provide credit counseling, which you should check out before an official purchase.

Taking a Debt Consolidation Loan

I am not sure that how much you know about the debt consolidation loan,actually,we have several post in this blog about this section early before. Debt consolidation loan can help your reduce debt cost by remove high interest rate credit cards to a lower interest rate credit cards. There are many companies on the street which can offer you debt consolidation loans, however, you need to pay for some fees for an application, such an application does not require a credit card. Make sure to avoid any scams too as there are unfortunately many operating. 

Refinancing your home

If you find that your mortgage interest rates is rising,you should consider refinance your home, which can help you save several hundreds of dollars in your monthly mortgage repayment. From the new mortgage plan you can save some excess money which can help you to lower your debt.

Cashing Out

Instead of the refinance home,you can choose cash out if you have enough equity with your home. Then you can use the money to pay off your debt.In that case, you can reduce your tax obligation and debt.
What I have showed above are four useful strategies for debt,you can use them and they can help you to reach debt free.