not worth the jingle

douchebag[1]If you’ve been following along my various blogs, you’ll know since moving to the US I’ve been totally focussed on getting my credit rating in shape. Despite showing up with a letter of referral from my UK bank in 2006 that I’d been a total rockstar managing the mortgage on a $1.2 million dollar home loan, I couldn’t get so much as a contract cellphone.

Credit ratings are everything. I didn’t have one. So I’ve tackled this over the past 7-years like a religious zealot. Monitoring it, bumping my rating up to 771/748/771 on my 3-Bureau report. Feeling good, Oh happy days I’m in the 10%. As part of that effort I paid off my mortgage, managed payments, used cards I didn’t didn’t need, and only once missed a payment and that was due to a processing error in what was supposed to be the set-up for an automated payment system by my FCU Amplify here in Austin.

Still, no matter. Turns out I’m considering another investment opportunity, and I got a call from Amplify about a Home Equity loan, or Line of Credit. I agreed, applied and sent in all the usual documents. I heard back today the interest rate was going to be almost 1.5% higher than we’d discussed, due to my credit rating being only “674”. How could that be I asked, and then pulled my 3-bureau score and sent it along.

Turns out that Amplify uses Equifax. When Equifax is asked for a commercial rating, it doesn’t use the one it gives your potential lenders, it uses something called the PLUS Score. Turns out this really isn’t the same score, and in my case it’s a whole 60 points off the real score. Seriously. It’s right here on the website. Right there it says “Your PLUS Score is a numerical representation of your credit risk on a scale very similar to those used by lenders.” Similar, not worth the calculation they did to make it up is more like it. Experian themselves use the same bogus PLUS Score. It doesn’t matter which of these services you sign up for, the result won’t be what they report to a lender. You have been warned.

Turns out, that most of the three credit score agencies do the same, yes Experian, Equifax and TransUnion all only provide fake credit ratings when you sign up for their online services. Is it any wonder why people spend so much time and effort gaming the system?

If you ended up here looking for help, I can’t. Robert Palmer has a great video on this.

Hate Mail

One thing I’ve grown to hate in my last 9-years in the USA, and increasingly in Austin as I’ve lived at the same address for 7-years, is the scam and fake mail that arrives at regular intervals.

There are those “official” looking envelopes that include seals, official government like crests and demand attention and immediate opening and often a response. I got a letter today from the Worth Finance Corp. They apparently have offices all over central Texas. They at least got my information from Transunion Credit, who pre-screened me.

Right at the top of the letter it says “It’s true, You are holding a real check for $800.00” and goes on empathise with me and my need to be ready for the “expenses the new school year can bring”. Which only goes to show they know absolutely nothing about me.

19895_10151794977230915_1445898368_nThe letter, with attached $800 check, helpfully included pictures of good looking kids. Inside the horror of the letter and the scam is revealed. You can borrow $800, at a staggering 81.26% interest rate.

Which means it will cost you a minimum of $396 in interest almost half of what you borrowed. If you pay everything on time, you’ll pay back $1194. This is total daylight robbery at a time when interest rates are at record lows. The worst you can do from the credit union I use is 9.5% and I consider that 3x what I’d pay, and certainly for much more than $800.

These letters are no more than scams and fishing trips to lure poor, uneducated , the elderly and needy people in America into into doing something they wouldn’t otherwise do. The sorts of information in these letters includes details which are in most civilised societies considered private, like the amount of the mortgage you have on your house; the status of your insurance etc. In many cases the types of information included is not only private, but would be subject to data protection laws in the UK, Germany, France etc. Not just because it is private information, but exactly to stop this sort of high pressure scam and selling which can frighten those who don’t know better.

I would call Transunion at 1-888 567-8688 but took the risk of doing it via the web – I’m also going to spend some time in the morning tracking down the CEO and send him/her a fake Cease and Desist letter with a fake crest on the envelope.