Wednesday, April 8, 2009

Stay, FICO, stay!

I recently received a notice from one of my creditors that my interest rate was set to go up in a few months. It went on to explain that all cardholders (with this particular card) were subject to this rate hike and I had a certain amount of days to opt out and close my account. This particular creditor is HSBC.
What does this mean?
One way or another, my credit is about to be affected and the only reason is because I am a customer. Nevermind that I've never made late payments. It wouldn't matter if I'm current on all other credit lines, never miss payments, or if I have been a great customer for a lengthy amount of time.
Unfortunately, this is not unique to me. This is happening to millions of other people in our country.

What about people who keep that one credit card for emergency purposes only? No real emergencies in the last 6 months? Or the last year?
You could be at risk of losing that account. Well known creditor Discover recently reported that they closed 3 million inactive accounts in 2008 alone.

Is this fair? No.

How do they get away with affecting the credit of tons of undeserving people? Because of the terms and conditions of the credit agreement, that's how! You agreed to the CREDITOR'S Terms and Conditions, also known as their total whim, when you filled out the application.

With so many people clinging to their credit scores for dear life, it seems that all that hard work may not play out the way we thought it would.

Thursday, January 29, 2009

If at first you don't succeed...

If you are truly willing to commit to a debt settlement program, you must understand that maintaining communication with your creditors will hinder the process. What did you hire the debt settlement companies for? To stop the calls? To help you resolve the accounts?
If you want the calls to stop, you might consider not answering the phone anymore. Your debt settlement company cannot tell you that you may not speak with your creditors. Often in life we hear the saying, 'Keep your friends close and your enemies closer.'
This DOES NOT apply to your financial situation with creditors. I've said it before and I will say it again: **Creditor calls will begin quite amicably while the process of gathering information takes place. You had better believe they are going to turn on you and become quite aggressive.

Remember the creditor's mentality: If at first you don't succeed, try, try again.
They don't necessarily even need to reach you. Calling your family that may live out of state with still eventually get the message that someone at an 800 number is looking for you. It may be so embarrassing that you return the call with the hope that they will honor your request for them to stop calling your family or distant relatives. They may even call an ex-spouse.

If you've hired a debt settlement company to help you resolve your debts and are willing to truly commit to your plan, you are doing yourself a disservice by maintaining any kind of contact. Let your settlement company do their job.

Saturday, January 17, 2009

Creditor harassment and phone calls

For those of you in debt and delinquent long enough to have been receiving calls from your creditors, you may have noticed that they start out very nice and compassionate. One to two phone calls later, they are now hardened and uncaring. There's a strategy behind this. It's not just that Johnny Callsalot is now frustrated because the nice approach didn't coerce a payment from you.
It's because Johnny wants to talk to you and find out how you got into the debt. Not only that, he wants to find out more personal details to figure out what kind of person you are. Have you been hiding this debt from your family? Talking to Johnny about how you hide your situation from your family because you don't want to worry or upset them could be used as ammunition later. He'll call you and tell you if you don't pay this debt, your family WILL find out. Maybe the entire community.
He will potentially try to use information gathered in the initial conversations to turn against you with threats, scare, and humiliation tactics.

COLLECTORS ARE PAID ON COMMISSION! Every time a collector picks up that phone and dials your phone number, they are not trying to be your friend, they are not trying to be understanding or compassionate of your situation. They are TRYING TO GET PAID! And the sooner you understand that, the better off you will be.