Answering your important questions about credit repair.

What is credit repair?

Credit repair is the process of trying to improve your credit score.  Lenders use your credit report and credit score in order to judge your reliability as a loan candidate. Your credit report indicates your ability to handle debt responsibly and will help banks decide if you are a desirable loan customer, so cleaning up negative and inaccurate items will raise that score and help you save money.

How is your credit score computed?

Your credit score is determined by an algorithm developed by the Fair Issue Corporation (hence its other name of FICO score). Three corporations, called “credit bureaus”, specialize in collecting and reporting on financial histories. Those three companies are Equifax, Experian and TransUnion.  While their calculations are secret, we do know that the basic building blocks of your credit score are founded on: Inquiries, Mix of Credit, Age of Credit, Debt Ratio, and Delinquencies.

Why is a good credit score important?

A good credit score can save you thousands or tens of thousands of dollars on mortgage loans, credit card interest rates, car and student loans, and even insurance.  Many employers are even now looking at credit reports when screening applicants!

Are there quick fixes and tricks that are guaranteed to improve your credit score? 

No.  Credit repair is an ongoing process of making good choices to manage your debt load and finances responsibly, and then making sure accurate information shows up on your credit reports.  Stay far away from anyone who promises guaranteed results, quick fixes, or tricks.

So how does it legitimately work?

Credit repair is a process of identifying incorrect, misreported, and duplicate items on your report and then sending dispute letters to the credit reporting agencies to challenge the validity of negative information.  The credit bureaus are carefully governed by the Fair Credit Reporting Act that requires them to either fix the problem or respond with evidence that it’s true within a certain timeline.  Either they will fix the inaccurate negative credit item or if they don’t have evidence or don’t respond in time, the item will be removed.  Either way helps your credit score to rise to where it should be. 

Are there really that many errors on credit reports?

You’d be shocked!  The credit bureaus are in the business of selling information first and foremost so duplicates, wrong addresses, misspelled names or aliases, identity theft, and old items that should have fallen off are all examples of the common mistakes that show up.  According to the Consumer Data Industry Association, a trade organization for credit reporting agencies, credit repair disputes account for no less than 30% of disputes received by the credit reporting agencies. 

What are credit repair companies?

Credit Repair companies act as advocates for consumers, doing the hard work and exercising the knowledge to dispute and remove negative items.  Credit repair companies work for the client who hires them for their services. 

Why do so many credit reporting companies have a bad reputation?

Unfortunately, it seems there are a lot of bad companies and services in the realm of finances.  Far too many credit repair companies make claims that are not true, offer guarantees and promises just to collect large fees, don’t represent their clients to the best of their abilities, or claim legal representation when none exists. 

Can you try to do it yourself?

Yes, you can try to repair your credit yourself and write dispute letters to the credit bureaus. 

Why would you hire a credit repair company?

“Trying” it and successfully obtaining the desired outcome are two different things.  A good credit repair agency has the knowledge, experience, manpower, systems, and dedication to achieve the best possible result. 

Think of it like this:  Do you do your own taxes?  Trade your own stocks?  Maybe you do, but most people chose to hire the best possible professional because it’s important enough to get right. 

Other than dispute letters, what else should be included in a responsible credit repair plan?

First, devise an action plan for things you can do to maximize your credit profile; simple adjustments to the way accounts are being reported can have a massive impact on your overall credit grade, and profile.  Next, review your credit line by line to identify items that are potentially reporting incorrectly, items that are outdated, unverifiable, misleading, or questionable.  Assess all of your debts and loans to see what is helping you and hurting you, not only in regards to credit score but in the context of your whole financial picture.  Last, there should be continuing education so you’re never left operating in the dark as you make important decisions about your credit score in the future.

What assurances do you have when you use a credit repair company?

Credit repair companies are prohibited from making promises or guarantees.  They also cannot charge customers until after services have been performed.  Make sure they disclose that you can try to improve your score yourself and follow all state and Federal laws and regulations as laid out in the Credit Reporting Organizations Act.  Good credit repair agencies let you log in or check in at any time to track the exact progress of your disputes and your file.  You will have direct access to a professional staff member who answers all of your questions and proactively coaches you. 

How do you make the best-educated decision and find the right credit repair company?

Check in with the Better Business Bureau to make sure a credit repair agency is registered and in good standing with a good rating, or else do not hire them.  You can also ask them for a statistical range of past results.  This is not a guarantee that you will receive the same thing, but a reasonable range of expectations.  Make sure your credit repair company has a physical brick and mortar office you can walk into if you wish and professional counselors you can call any time.  Ask them point blank if all of their practices are ethical and legal and request documentation in compliance with the FTC and CROA.   

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Do you have any questions or would like more information about credit repair?  Feel free to contact us for a complimentary consultation.  

The 5 biggest data thefts in U.S. history.

An indictment came down last summer for what’s being called one of the biggest data theft operations in U.S. and international history, as four Russian men and one Ukrainian man were charged in a sophisticated hacking scheme that may cost its victims hundreds of millions – or even billions – of dollars.  The men stole data that included over 160 million credit card numbers from multinational corporations like Visa, J.C.Penny, JetBlue, 7-Eleven, and even NASDAQ, selling the information on the black market and defrauding countless consumers.

The men utilized custom malware and hacking tools to get on the corporate networks and rip blocks of credit card numbers, security info, and other private date, referred to as “dumps.”  They’d then sell the dumps to data theft wholesalers – or resellers – who resold it to individual buyers, called “cashers,” who would use the cards to make fraudulent purchases or withdraw funds.   According to the indictment, U.S. credit card data would cost $10 each while Canadian cards went for $15 and European bank or credit card access $50.

Their criminal ring took place from 2005 until 2012 where they tapped into computer networks of at least 17 payment companies, financial institutions, and retailers to get the credit card and debit card information.  The companies are still trying to add up their staggering losses, possibly in excess of $300 million for some of them.  The men are looking at a long paid vacation behind bars, but still the damage has been done. 

The scariest thing is that this kind of data and financial theft is not rare – online fraud and data piracy is the fastest growing branch of any crime, so prevalent that it’s highly recommended computer users and online shoppers take proactive measures to protect their financial data, their identity, and their credit scores.   

Let’s look a few of the other biggest data thefts in U.S. history:

U.S. Veterans Affairs - $25-$30 million

In 2006, the names, birth dates, and social security numbers of 17.5 million veterans were pirated from a single laptop that a Department of Veterans Affairs worker had taken home for the evening,  That one leak cost the VA an estimated $25-$30 million dollars if you add up the cost to fix the problem with reimbursements, call centers, mailing warnings, credit monitoring services for the victims, and other “clean up” well over $20 million dollars and counting.  The lesson?  Never take your work home.

Heartland Payment Systems - $140 million

This major payment-processing center was the victim of a cyber crime in 2008 that saw the loss of 100 million credit and debit cards.  A lone hacker from Miami, Albert Gonzalez, was apprehended, arrested, and sentenced to 20 years in Federal prison as the ringleader of the operation that defrauded TJX, 7-Eleven, and the grocery chain Hannaford Bros.  Heartland ended up paying out $140 in fines and restitution. 

TJX – $256 million or more

Speaking of Inmate Albert Gonzalez, the same man was a major player in 2007’s data heist at TJX, the retailer that has TJ Maxx and Marshalls under its umbrella.  Data hackers and Gonzalez stole about 45 million credit and debit card numbers that they used to buy millions of dollars worth of electronics from Wal-Mart and other chains.  The crime cost the company about $25 million in direct costs but the real price tag to consumers and insurance claimants stands to be over $250 million.

Epsilon - ???

The Dallas Marketing firm Epsilon was hacked for millions of names and e-mail addresses in 2011, which the criminal ring used to acquire sensitive financial data from consumers.  The information featured lists from banks and retailers like Best Buy, JPMorgan, TiVo, Walgreen, and Kroger.  The stolen data is still being rounded up and the damage assessed and addressed, so risk analysts estimate the total bill to be anywhere from $225 million dollars to upward of #4 billion once the dust settles.  

Everything you’ve ever wanted to know about chocolate..and then some!

We’ve fought wars over it, it’s inspired epic love poems, and now it’s the one of the world’s most traded commodities.  But we love chocolate for a different, simple reason – it tastes so darn good!  So let’s take a look at everything you’ve ever wanted to know about the creamy brown sweet treat.  

1. Chocolate originate from the seed of the Theobroma cacao tree, a small (15–26 ft.) tall) evergreen tree native to the tropics of the Americas. 

2. Theobroma is the scientific name that means "food of the deities.”

3. Cacao, the common name for the seeds, has been around for millions of years and cultivated for at least 3,000 years in Mexico, Central America, and South America, with earliest documented use in 1100 BC. 

4. In Mayan civilization, cacao beans were used as currency.  100 beans bought you a slave, 10 beans the services of a lady of the evening and a turkey cost 20 beans.  Of course, counterfeiting cacao beans with painted clay became its own thriving industry. 

5. In some areas of Latin America, the cocao beans were still used as currency as late as the 1800’s. 

6. Every cocoa tree produces enough cocoa for about 400-800 bars of chocolate each year.

7. The cacao bean contains about 300 different flavors and 400 separate aromas.

8. The process to make chocolate is somewhat complex:  The beans are fermented and then dried, cleaned, roasted and the shell is removed.  At that point they’re called cacao nibs.

9. The nibs are then ground into cocoa mass, which is the chocolate we know in its rough, base form, liquid called chocolate liquor.  

10. The liquor is then molded, processed, and ingredients added to make it one of two forms:  cocoa solids or cocoa butter.

11. From there, the use of chocolate depends on the proportion of coca solids to butter.  Unsweetened baking chocolate, sweet chocolate, which also contains fat and sugar, milk chocolate which also contains condensed milk or milk powder, and then white chocolate with has all of that except no cocoa solids.

12. Raw chocolate is dark and contains a minimum of 75% cacao. Processing chocolate depletes some vitamins and minerals so raw cacao is a more nutritious form of chocolate.

13. Cocoa solids contain caffeine and alkaloids and caffeine, which have physiological effects on the body and are linked to serotonin levels in the brain.  Even the smell of chocolate increases theta brain waves, which triggers relaxation.

14. However, theobromine, one of those alkaloids, is toxic to some animals, which is why dogs and cats can’t eat chocolate.

15. Chocolate is linked to health benefits when eaten in moderation.  Dark chocolate, especially, contains antioxidants that help the cardiovascular system and reduce blood pressure.

16. Dark chocolate widens arteries and promotes healthy blood flow that can prevent the buildup of plaque that can block arteries. Studies show that eating dark chocolate every day reduces the risk of heart disease by one third.

17. Research shows it increases blood flow to the brain, boosting memory, attention span, reaction time, and problem solving.

18. Although dark chocolate is beneficial to health, milk chocolate, white chocolate, and other varieties are not.  If you want the good stuff, buy darker and make sure cacao or chocolate liquor are the first ingredients listed, not sugar.

19. There are some drawbacks to too much of the over-sweetened, processed chocolate, however.  Since it contains high amounts of caffeine and sugar, it’s been blamed as a contributing factor in ADHD (Attention Deficit Hyperactivity Disorder) in children.

20. Though many people feel like they’re addicted to chocolate, that kind of commercial chocolate, especially in the US, has so much sugar and such little pure cacao solids that it’s probably the sugar they’re getting hooked on.

21. But more good news is that there’s been no link found between eating chocolate and causing acne, as rumored.

22. Probably because of the natural serotonin triggers, people who feel depressed eat 55% more chocolate than their non-depressed peers.   

23. Chocolate milk also makes one of the best after-workout protein drinks, as long as it’s the darker variety. 

24. Chocolate is the only food that melts around 93 degrees Fahrenheit  (just below body temperature) because the nature of cocao butter, which is why it melts in your mouth.

  

25. Cacao may have originated in Central and South America, but these days 70% of the world’s cacao is grown in Africa.  Cote d’Ivoire, the Ivory Coast, is the single largest grower, producing 40% of the world’s supply.

26. Ghana is next at 21% and then Indonesia with 14% of the world’s chocolate supply.  

27. Almost all cacao trees grow within 20 degrees latitude of the equator and 75% grow within 8 degrees of it. 

28. About 50 million people around the world depend on cocoa as a source of livelihood according to the World Cocoa Foundation,

29. Unfortunately, cocoa growing practices and harvesting farms have been linked to unsafe working conditions, unfair wages, and child labor trafficking.  

30. In 2010 alone, 1.8 million children ages 5 to 17 were forced laborers in the Ivory Coast and Ghana.  40% of them were not enrolled in school and only 5% of them were compensated at all for their work.

31. Europeans were the first to sweeten and enrich chocolate by adding refined sugar and milk as early as the 16th century.

32. Briton’s John Cadbury invented an emulsification process in 1842 that turned it into solid chocolate, creating the first chocolate bar and launching the Cadbury Chocolate Company.  

33. Chocolate is a HUGE industry.  The global market is expected to grow from its current level of $83.2 billion a year in revenues to $98.3 billion by 2016.

34. Worldwide, over 3.8 million tons of cacao beans are produced every year!

35. Americans eat about 1.3 billion pounds of chocolate every year.

36. Just in the U.S., manufacturers use 3.5 million pounds of whole milk every day to make milk chocolate.

37. Hershey Kisses were first made in 1907 but in the shape of a square, until a new machine in 1921 formed their current shape.  There are 80 million chocolate Kisses made every day!

38. Speaking of Hershey’s, they’re the largest and oldest chocolate company in the U.S., producing over one billion pounds of chocolate products annually.

39. A Hershey's bar left from Admiral Richard Byrd’s expedition to the South Pole was dug up after 60 years and was edible, since it had been frozen all those years.   

40. World War II rations included chocolate bars because they provided a lot of calories and energy but were small and easy to store. 

41. Incredibly, during that same war the Germans designed a tiny steel bomb that was covered in chocolate that would explode 7 seconds after a piece was broken or bitten off.   

42. Chocolate is HUGE during the holidays in the U.S., with 48 million pounds sold for Valentine’s Day and 71 million pounds for Easter.

43. But Halloween takes the (chocolate) cake, with 91 million pounds purchased and consumed for the frightful holiday!

44. Over 50% of Americans prefer chocolate to any other flavor.

45. In the U.S. we average 12 pounds of chocolate consumed per person each year, but out sweet tooth doesn’t even compare to how much they love the brown gold abroad, good for 11th most in the world.  

46. In Switzerland, each person averages 22 pounds of chocolate eaten per year.  Australia and Ireland are next and 20 and 19 pounds each, respectively.   

47. Belgium (where Godiva originated) has more than 2,000 chocolate shops and produces 172,000 tons of chocolate per year. 

48. By the way, German chocolate cake was not first made in Germany but named after its American inventor, Sam German.  

49. The largest box of chocolate in the world was made in 2002 by Marshall Field’s in Chicago.  It contained 90,090 Frango choco mints and weighed 3,326 lbs.!

50. The most expensive chocolate confection in the world was created by a Danish chef and luxury chocolatier named Fritz Knipschildt whose store is located in Connecticut.  His chocolate truffle, named La Madeline, goes for $250 each!

51. Do you need another reason to go buy some chocolate?  According to a study, women who eat chocolate regularly have a better sex life and higher levels of desire, arousal, and satisfaction during sex.