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BBB warns of scammers offering student loan ‘forgiveness’ | News

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As COVID-19’s impact on daily life lessons, student loan borrowers whose repayments were paused due to COVID-19 may be considering their options for resuming payments on this potentially life-altering debt. This may lead some borrowers to look into debt consolidation. Better Business Bureau (BBB) cautions borrowers to research these options carefully and not give in to the temptation to seek a quick fix that could turn out to be a scam.

BBB Scam Tracker received more than 400 reports of debt relief and credit repair scams in North America in 2020. These scams cost consumers a reported total of more than $246, with the median consumer losing $800. Most commonly, these reported scams involved payment by bank account debit.

Up-front fees, including fees to enter a repayment plan, are a common thread among debt relief scams. These up-front fees are illegal, and according to the U.S. Department of Education’s Federal Student Aid division, borrowers are never required to pay for assistance with their student loans.

Some scam companies ask consumers to sign over a power of attorney for financial decisions, use it to put the consumer’s loans into forbearance — a way to temporarily stop or lower payments, during which loans continue to accrue interest — and ask the consumer to make payments directly to them rather than to the loan servicer. In reality, the company keeps the payments for itself, and the forbearance eventually expires without any repayment progress being made.

Help with loan repayment — including loan deferments, forbearance, repayment and forgiveness or discharge programs — is available directly through the Department of Education and loan servicers alike. Applying for these programs is free.

BBB advises borrowers in search of student loan relief to consider the following tips:

•Do your research on the company and the options available to you. BBB Business Profiles on debt consolidation and other companies are available at BBB.org or by calling 888-996-3887. These include customer complaints and how they were handled, customer reviews and a rating from A+ to F.

•Don’t pay upfront fees to debt repayment companies. If a relief company asks for money before helping you, report it to BBB.

•Think twice before signing a power of attorney or giving a company your bank account information or Federal Student Aid website login information. These actions allow a company to make financial decisions for you.

•Don’t agree to a forbearance or deferment plan long-term without doing your homework. These should be considered only as temporary solutions.

•Don’t be taken in by promises of quick relief. The loan relief and forgiveness options available through the Department of Education still require years of payments, and these loans cannot be discharged through bankruptcy.

For assistance, visit BBB.org or call 888-996-3887.

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Dave says: If you need a cosigner, you're not ready – Northeast Mississippi Daily Journal

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How to improve your credit score in 2021: Easy and effective tips

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If you’ve ever wondered “What is my credit score?” it’s probably time to find out. Having a good credit score can make life a lot more affordable. If you’re about to buy a house or car, for example, the higher your credit score is, the lower your interest rate (and therefore, monthly cost) will probably be.

Your number may also be the deciding factor for whether or not you can get a loan and ultimately determine if you are even able to buy something you want or need.

So, yes, the goal is to have the highest possible credit score you can, but increasing the number doesn’t just happen overnight. There are important steps to take if you want to increase your score, and the sooner you start working on it, the better.

“If you’re trying to increase (your credit score) substantially to accomplish a goal, you’re really going to have to have as much lead time as possible,” said Thomas Nitzsche, director of media and brand at Money Management International, a nonprofit financial counseling and education provider that advises people on how to legally and ethically improve their credit score on their own.

If you have fair credit and you’re trying to improve the number for a house purchase, for instance, you’ll want to start working on it at least a year in advance, he explained to TMRW.

But even though that sounds like a long time away, you can (and should!) start doing things right now to bump that number up. Below, see seven things you should do — and not do — to help improve your credit score:

1. Review your credit report

Review your credit report and look for errors that might be hurting your score. Morsa Images / Getty Images

The first thing you’ll want to do is pull up a copy of your current report so you know where you stand. You can get free reports from all three agencies — TransUnion, Experian, and Equifax — at annualcreditreport.com. Nitzsche said it’s important to take a moment and understand the financial snapshot of where you are today and where you want to be.

You’ll also want to take some time and look for any errors on your report, which could negatively impact your score. “If your name is misspelled, that’s not going to hurt your score,” he explained. “But if you see a late payment or missed payment (that’s in error), or maybe you have an account that should be reporting but isn’t, then that’s a problem and that will impact your score.”

If there is an error, you should dispute it and try to provide as much proof as you can.

One other thing: You can also ask a creditor to remove an issue if it’s been corrected (i.e., if you paid off a collection debt). Nitzsche said it doesn’t hurt to ask and the worst thing they could say is no.

2. Have good financial habits

“The biggest part of your credit score is payment history, so the most critical thing is never missing a due date,” Nitzsche said. Set up a monthly autopay or add all due dates to your calendar so you never miss a bill.

You can also achieve a higher score when you mix different types of accounts on your credit report. It may seem counterintuitive to get extra points for having debt in the form of student loans, mortgages and auto loans, but as long as you’re paying them off responsibly, it shows that you’re reliable.

3. Aim to use 30% or less of your credit at any given time

Know your credit limit and aim to only use 30% or less of it for a better credit score.Tim Robberts / Getty Images

Know your credit card limit, and try not to use any more than 30% of that number each month, otherwise your score could lose points for too much credit utilization.

Another thing you can do is ask your bank to increase your limit. “That will give you more flexibility to spend more,” Nitzsche said. You could also pay it off twice a month to keep the balance low. But he does warn that you never know when the balance is going to be reported to the bureau. It can happen at any point during the month, so it might be the day after you make the payment or the day before. “You don’t necessarily want to use the card and pay it the next day because that doesn’t give the bureau the chance to know that you’re using it,” he said.

4. Avoid requests for new credit

If you’re looking to increase your score around the time you want to buy a house or car, you won’t want to open up a new line of credit, like a retail card, credit card or loan. That’s because “hard” credit inquiries like those can lower your score, and sometimes it comes down to a few points over whether you’re approved or what your rate will be, Nitzsche said.

“Soft” credit inquiries, like when an employer checks your credit or when you pull your own report, won’t affect your score.

5. Keep all accounts open, even ones you don’t use anymore

Even if you don’t use that credit card from college, it’s a good idea to just keep it open because closing it could hurt your score. Nitzsche explained that you’ll be dinged some points for each account that is closed. If you want or need to mentally break up with a card, just cut it up instead.

6. Build your credit if needed

If you haven’t established credit yet, you might not even exist … in the credit report space, that is! “If someone has never fallen in delinquency on any subscriptions or utilities or never had collections on anything and they have not utilized credit cards or loans in the past seven to 10 years, they may not have a credit profile at all,” Nitzsche said. “That presents a challenge when you want to buy a home.”

If this sounds familiar, you may have to get a secured credit card where you put down a deposit, he advised. “You still have to make payments and use it responsibly. Not all banks offer them but you can usually check with your local bank or credit union.”

7. Reach out for help

If you want personal guidance on boosting your credit score, make an appointment with a credit counselor.kate_sept2004 / Getty Images

There are many apps and credit-monitoring services that can help you stay on top of your credit score. You could also reach out to a professional credit counselor who can help you navigate your specific situation. (Here’s a good resource about finding a reputable service.)

One last thing: Nitzsche warned that everyone should beware of credit repair scams that claim to be able to increase credit scores for an advance fee to get accurate negative information removed (even temporarily) from credit reports.

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Lifestyle News | ⚡How J&G Credit Recreations Assists Individuals to Gain Financial Stability Through Credit and Homeownership – LatestLY

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Lifestyle News | ⚡How J&G Credit Recreations Assists Individuals to Gain Financial Stability Through Credit and Homeownership  LatestLY

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