Unless you’ve been living in a cave, you’re probably vaguely aware of the current meltdown that’s recently hit the financial world. The effects of the mortgage industry debacle have been far-reaching and not always welcome.

As lenders rushed to build their portfolios based on bad business models, greed and predatory practices, the final outcome was pretty much inevitable. Their house of cards has collapsed.

As a result, we’re in the midst of watching as the market starts to shake out the bad players (which was long overdue, anyway) and get back on a solid footing.

Along the way, there have been a lot of ripples that have affected not just the mortgage market, but have extended into other areas.

A couple of these ripples are:

• Fallout from the mortgage mess and its effect on related industries, and

• Fraud – the current mess has given rise to a whole new genre of criminals

We’re going to look at one industry that has been particularly hard hit by the fallout – the Auto Finance industry.

One characteristic shared by the auto finance and mortgage industries is the constant need for new capital. Or, to put it another way – investors. Through both public and private sectors.

Fallout from the Mortgage Mess

As the investors in the mortgage sector entered into their state of panic, it wasn’t long before this fear crept into the auto finance industry. The result has been a lack of confidence on the part of investors to pony up the money needed for continued growth.

The result of this panic has been a significant shake-up in the auto finance industry. Strangled by a lack of new capital, we have seen some pretty dramatic changes occurring.

A significant number of lenders have just closed their doors. Gone. Out of business. Still others have stopped accepting new customers – now focusing on collecting and servicing their business that’s already on the books.

A number of others are still in business but with new, more stringent guidelines that seem to change with the wind.

Just like the mortgage industry, this shake-up is not all bad. The weakest of the lenders have fallen by the wayside. And a number of the really bad players have disappeared from the scene.

Firms that are well-capitalized with realistic approaches to lending are surviving.

Since the auto finance sector lags well behind the mortgage sector, we are now seeing a substantial upheaval in the market today. The same upheaval that the mortgage industry has already been through – and survived.

For the time being, though, the reality is that financing a car loan is a tough proposition for anyone with previous credit issues. More extensive documentation and bigger down payments are the keywords for now.

Will it turn around? Well, if history is any indicator, the answer is yes. The difficulty lies in trying to visualize just how the market will look once it does turn around.

Remember – the auto manufacturers are going through their own little nightmare while the financial market is trying to survive and recover.

Fraud in the Marketplace

Because of the seriousness of fraud in the mortgage industry, we feel compelled to offer some words of warning.

If you happen to be one of the unfortunate that is facing the possibility of foreclosure, take note.

The mortgage mess has spawned a new breed of criminal.

The ads are everywhere. On the side of the road. On the late-night infomercial (Get Rich Quick in Real Estate). On the internet. Maybe in your mailbox.
This new criminal will offer you “great” news – how you can avoid foreclosure.

The rub is this – you’ll either pay them a fee, or you’ll make your payments to them instead of your mortgage lender. Either way, they will flat out steal your money. And do absolutely nothing to head off your impending foreclosure.

The bottom line – run like crazy from this new breed of scammers. If you’ve got a mortgage problem, go to the HUD website and find a HUD counselor in your area. It’s a free service.

And it works.

We’ve all seen the stories of how so-and-so was a victim of identity theft and the awful consequences they encountered.

In case you didn’t realize it, it can tear up your credit rating.

I know – from firsthand experience.

Some years back, I went into a car dealership to buy a car. The finance person, upon pulling my credit report, announced that there was no way I could get a car loan.

He showed me the report and pointed out that I had a charge-off of over $8,000.00 appearing on it.

The report stated that I had defaulted on a loan with a company called Commercial Credit.

I contacted the credit bureau, in writing, to dispute the report.

I got my response some 3 weeks later, stating the credit report was accurate (don’t they always say that?). They even included a new (and somewhat different version) copy of my updated credit report.

Fortunately, the report now listed the address of this company.

Calling this company, I was advised that they had absolutely no record of anyone by my name having had an account with them. Considering that they were located in Baltimore and I lived in Kentucky at the time, this seemed reasonable to me. (I had never even visited Baltimore at this time)

Communicating with them by phone and in writing, I was advised that any changes to my report had to be initiated by their home office in Texas.

Another round of phone calls and letter writing took place. Finally getting a response from the person “in charge of these things” I received a copy of a really strange looking form that had been sent on my behalf to all 3 credit bureaus.

During our conversations, we had come to the conclusion that the only way this could have occurred was if someone had gotten my social security number and used it to get credit with the finance company. Then – they had just disappeared after getting the loan.

It took me 7 months to get this removed from my report.

This all doesn’t sound so bad, except for one thing -it wouldn’t go away!

About 3 years after this happened, the company was bought out by Associates Financial. The first thing they did was to go through and update all the account listings they had on file.

You know what’s coming, don’t you?

Yep – same thing all over again. Only now I’ve been reported as having an $8,000.00 charge-off with Associates.

Luckily, I had retained copies of all my old correspondence. This time I was able to clear it up in just 2 months.

As if that wasn’t enough – fast forward another 3 years.

They’re sold again. This time it’s Citifinance. Same dance again. Same 2 months to clear it up.

That brings us up to today.

Awareness of the problems of identity theft is finally growing. You now have the means to fight back.

But it’s still a tedious process. Yes – you can place alerts in your credit file. And then renew them. And renew them.

Or, you can take our recommendation to stop it from happening in the first place.

If Lifelock had been around when I first went through this mess, I would have had it stopped in its tracks before it ever became a problem.

Yes, they charge you. But I have to say – this may just be the best 10 bucks a month you’ll ever spend.

Check it out for yourself. You won’t be sorry.

Click here to get more information.

Update

We just recently read a news report about Lifelock that should interest you – I know it sure interested me.

It seems that they’ve been sued.

Now, before you panic, here’s a question for you – Can you guess who has brought this lawsuit?

One of the credit bureaus has filed the suit.

The first thought that came to mind was   — What better endorsement could you ask for?

If Lifelock has upset the credit bureaus enough to make one of them file suit – they must be doing something right.

• You’ve just gone through a bankruptcy

• Your bankruptcy has discharged

• You’re ready to clean up your credit report

We’ve already given you some of the bad news about your credit report in the article “Bankruptcy – What Just Happened.” At this point, we want to give you some further insights and the means to really do something about your credit report.

Bankruptcy usually will destroy even the best of credit ratings. Your score will take a major hit and all those debts that were put into the bankruptcy are still on your credit report.

Each month that passes usually causes those old debts to show even more delinquent than the previous.

First of all, you must realize that it’s not the credit bureau’s fault. Nor is it your lawyer’s fault. No – the fault lies squarely with your creditors.

Since they are not under any obligation to update your credit file in a timely fashion, a lot of them will drag their heels in taking care of this. Does the term “vindictive” come to mind?

The good news is: you can do something about it.

It really isn’t terribly complicated, but there is a process you need to follow to accomplish your objective.

Will all those old debts “magically” disappear? Nope. So, what’s the point?

The point is this: by simply updating that really ugly credit report and showing that those debts were included in your bankruptcy, you may realize a truly significant rise in your credit score.

How does that reflect in my score?

It’s simple. Instead of having a creditor report your account as “delinquent” with a terrible rating, it now will report as “included in bankruptcy” with no rating attached.

Take, for example, the case of a car loan where a car was surrendered in the bankruptcy. It doesn’t matter if it was voluntary or not – it’s a repossession.

And just what do you think your chances are of getting another car loan now? Remember, you now have a “Repo” in your credit file.

If you guessed “not so hot,” you’re right on the money.

Now, if that same car loan gets reported as “included in bankruptcy” instead of “REPO,” you just increased your chance of getting financing by about 100%.

So, let’s get on with what you need to do in order to get that “fresh start” that the bankruptcy was supposed to give you.

First of all, you will need your bankruptcy papers. That big stack that your lawyer gave you when you filed your bankruptcy.

Find the “Schedule of Creditors.”

You will need 3 copies of this schedule for each person named in your bankruptcy filing.

Now, find your “Letter of Discharge.” Once again, you’ll need 3 copies of this letter for each person named in your bankruptcy filing.

Place a copy of the Discharge on each of the copies of your Schedule of Creditors. You’re going to mail this stack of papers to each of the 3 credit bureaus, along with a cover letter.

The cover letter can be short and sweet. Here’s what we recommend:

Gentlemen:

Please use the enclosed Federal Court Documents to update my credit file.

Sincerely,

That’s it. No excess verbage. No threats. None of that helps, anyway.

Now, here’s the really good news. The credit bureaus are fanatic about accurately reporting your credit file. Not that they’re on your side – they are forced to do this, by law. And they don’t want the Federal Government crawling up their backsides.

As a result, the credit bureaus will do the work for you. They recognize the court documents and will use them to update your file for you.

Doing this on your own would involve your contacting each and every creditor and then forcing them to update your credit files. Let the credit bureaus do it for you.

After you’ve gotten all these papers together, send each of them to the 3 credit bureaus.

Send it by certified mail with a return receipt.

You want to know that they got there. And you want to know when they got there.

The credit bureaus have 30 days to update your file, so don’t get anxious. Our experience has shown that they usually will send you an updated report, showing all the changes, within 2 to 3 weeks.

Now that you’re armed with what you need, there’s no need for you to endure an ugly credit report any longer.

Credit Bureaus and Their Addresses:

Equifax
P.O. Box 740241
Atlanta, GA 30374

www.equifax.com

Experian
P.O. Box 2104
Allen, TX 75013-2104

www.experian.com

TransUnion
P.O. Box 2000
Chester, PA 19022

www.transunion.com

Over the years, we’ve seen an awful lot of people with false expectations and some outright misconceptions about their bankruptcy. The best way to clear the air is to describe what exactly happens when you go through a bankruptcy.

Most people have the false expectation that the debts that were put into the bankruptcy just “disappear.”

I really don’t like being the messenger of bad news, but folks, that just ain’t so.

A quick look at your credit report may just startle you. The debts are still there. And most of the time, these debts are still being reported as past due, delinquent, derogatory – you name it.

The usual reaction for most people is to launch into an angry tirade against the lawyer they used for their bankruptcy. And, they’re wrong in this assumption. Dead wrong.

First of all, unless you hired your lawyer to help in rehabilitating your credit, you got exactly what you paid for. The lawyer did their part. Those debts are now no longer your problem (as far as repaying them, that is).

The debts have been “discharged.” That’s what the court labels them. Once the debts are discharged, you are no longer legally liable for them.

So what about that ugly credit report?

That’s another matter altogether. You must understand this: the credit bureaus merely report the information supplied by your creditors.

Technically, these creditors are supposed to now report those old debts as “included in bankruptcy.”

But there’s a rub. Or, if you prefer, a loophole.

They are under no time limits for updating your credit file. And, unfortunately, there are an awfully lot of them that just never seem to “get around” to updating your file.

That’s the bad news.

Now, for some good news.

You can get that mess cleaned up.

That’s right. You have the ability to actually get your credit report changed. We’re not going to go into the details here – you can follow the easy step by step process in Cleaning Up Your Credit After Bankruptcy.

That’s not the purpose of this article. We just wanted to let you know the bad news. And to let you know, you can do something about it.

So what are you waiting for? Get started now cleaning up your credit after bankruptcy.

Times have changed.

The credit bureaus are now, for the most part, consolidated into 3 major entities. We know them as Equifax, Experian and TransUnion.

Huge corporations. With enormous power and influence. Yet, they have managed to operate in relative obscurity for decades. Only recently have they been exposed to the light of scrutiny.

While time has changed the face of this industry, there are some basic elements that have never changed.

The following is the true account of a visit to one of the credit bureaus. I encourage you to read it through to the end as there are some crucial elements in this account that you need to know if you want any chance at dealing with the credit bureaus.

This is a true story – it took place many years ago, but it’s still relevant today.

*****

Having been denied credit by a local merchant, I was informed that it was due to a bad report from the “credit bureau.” That’s it.

Nothing further. Not even a phone number or an address of this mystical place.

My initial challenge was to first locate this temple of secrecy. And that proved to be a real quest. With no listings in the phone book for “credit bureaus,” it appeared that my search would come to a quick end.

Grumbling about the situation with a friend (who was also a local merchant), he told me that the “credit bureau” didn’t exist. It went by a different name altogether.

Swearing me to secrecy, he was enough of a friend to share that “insider” information with me. I don’t recall the exact name, but it was something on the order of “The Hightower Consumer Information Reports Agency” or some similar claptrap.

Finding them in the phone book, I was struck by the fact that there was no address listed. Just a phone number. So, I called them up. No – they wouldn’t discuss ANYTHING with me.

I was informed that if I wanted, I could make an appointment to come into their office and discuss the “matter.”

I want you to understand that this was a small community that I lived in (population of less than 10,000) and I knew my way around pretty well. The directions to their office were questionable – just enough information to make you drive in circles.

With persistence, I was finally able to narrow down the possible locations to two adjacent offices. Neither had a street-front or a street-level entrance.

No – they were located off what can only be described as an alley-way and neither had ANY identifying marks of any kind. Not even a street number.

Arriving early for my appointment, I went into the first office. SUCCESS! I had found it!

I was greeted by an old woman with a scowl on her face. She didn’t say a word. She just sat there and glared at me.

So I introduced myself and informed her that I had an appointment. I was informed, tersely and rudely, that the ONLY individual that I might speak with had decided to take the day off and there was no one else that could help.

No – I could NOT make another appointment. Call back – maybe tomorrow.

After about a dozen calls, I finally was able to get another appointment. It was starting to dawn on me – in a rather uneasy way – not only did these people not want to be found, they didn’t want ANYTHING to do with a consumer. The only real joy they had was in other people’s misery.

As I entered their office for my next appointment, I encountered the same greeting. The old woman reluctantly got up and went into the back of the office. Some 10 minutes later, she reappeared. She didn’t say a word.

After another 20 minutes or so of waiting, another old woman, just as sour and mean-spirited in temperament as the first, appeared in the doorway leading to the back. She barked a single command – “COME HERE!”

We entered into a room filled with file cabinets and dim lighting. I felt as though I had just stepped into a Dickens novel. After being seated at a huge wooden table, she asked the nature of my business.

So I explained. She demanded my full name, date of birth, social security number and current address. Then she disappeared into the files.

She re-appeared carrying a couple of hand-written 4 x 6 index cards. Seating herself across from me, she announced that yes, there were DEROGATORY items in my credit file.

She was obviously quite pleased and smug with this pronouncement.

Surprised, I asked what they were.

Silence.

I then advised her that I had never had ANY bad accounts with anyone. She just glared back at me.

I asked if I might look over the records to determine the nature of the bad report. I was informed that there was NO WAY that I would EVER be allowed to view their “confidential” records.

It took a great deal of coaxing to get her to share anything that was in my file. She guarded those cards like Fort Knox.

It was only when I suggested that I may be able to PROVE my case if she would just let me know the nature of the derogatory items that she finally relinquished. It seems I had been late in paying the bill at a local tire store.

Not so, said I. That must be a mistake. I had paid the bill before it was due.

Not according to her records – and her records were always accurate.

Well now. Just what did she need to change those records?

Proof. In writing. So I told her I would bring the proof.

When I returned, she took my receipts into that back room again. I could hear her talking on the phone with the tire store. “This man CLAIMS that he paid you on time. He even has a receipt with him, but I SUSPECT that it’s a FORGERY.” (Her emphasis – not mine)

And then, I heard the magic words – “Oh, REALLY? Well, you know that it’s up to YOU to keep these things straight.” Bang! – she slammed the phone down.

She then re-appeared and announced, in a tight-lipped voice – “Well, it looks like you’re right. The tire store gave us mistaken information. I’ll update your record.”

It had only taken me some 3 months to remove an incorrectly reported $200 delinquency.

*****

So how does all this relate to today, you ask. After all, times have changed. Right? Right?

Today we have automated reporting, super computers and databases.

Your assumption would be only partially correct. Yes, the times have changed. But some things haven’t.

The difference between then and now is this-

• Yes – today we do, in fact have automated reporting, super computers, databases and massive data centers to manage records.

However, some things never change -

• Today, the credit bureaus still don’t want you to find them and they still don’t want anything to do with consumers. The ONLY reason you can even get copies of your credit file is because congress made it a law.

• Today, those very same mean, bitter, distrustful old women are still in charge. They still take even greater joy in your misery.

• Today, those very same mean, bitter, distrustful old women stand as self-appointed guardians over the automated reporting, super computers and databases.

And, I suspect, a really big room full of index cards.

While only recently launched, FreshStartIndy.NET is already making waves in the credit and finance circles with its no-nonsense approach to what really goes on behind the scenes in this multi-billion dollar industry. The company’s mission is to provide consumers with verifiable facts and expert help and advice that enables them to make their best decision about which solutions are best suited to their particular situation.

Along with the companion site of FreshStartIndy.COM, this site was launched to provide up-to-date information and assistance for all who have a need for recovering from credit issues.

FreshStartIndy.NET is ideally positioned to become a consumer favorite for straight talk and an unbiased approach to this frequently misunderstood field.

We encourage you to contact us with any questions we may have failed to cover to your satisfaction.