Q: How do you get false information off of your credit report. We have tried to write and tell the credit bureau that the info they have is incorrect and it is still haunting us.
~S.E., Elk River, MN
A: If you find mistakes on your credit report, you should dispute them. Simply fill out the dispute form provided by the credit bureau. If you're trying to prove an important point –like that you never made a late payment on your credit card-- you should try to provide documentation. If you don't have documentation, but you know you're right, try disputing it anyway. The credit bureau has thirty days to research your claim and get back to you.
If your credit record changes as a result of your dispute, you can ask the credit bureau to send a fresh copy to any business that has received an inaccurate report about you in the past six months.
If the credit bureau says you haven't made your case, and refuses to change your report, you can write a dispute letter and have it placed in your file. You can also write a letter if you agree with entries in your report but want to explain the circumstances. For example, maybe you got behind on your bills because of a serious illness. Future businesses that pull your report will be able to see your letter and take it into account.
Q: Story = My daughter is in college and will be 21 soon. Should she obtain and start using a credit card so she can start building a credit history for when she is out of college?
~JJ
A: Personally, I got into big trouble by getting a credit card in college. I had no job and no means of paying, but all sorts of banks wanted to give me credit. IF your daughter is financially mature and responsible, then perhaps it's OK. The KEY is to use the credit card and PAY IT OFF ON TIME AND IN FULL each month. That is the best way to establish credit. Another trick? Assuming you have good credit, make your daughter an additional cardholder on your account. Although it's your account, most credit bureaus and scoring programs will count it in her favor. And one more thing: as long as you pay your bills in full each month, the OPTIMUM number of open credit cards to have for a maximum credit score is two. JUST two.
Q: I called to file a claim on a vehicle I purchased on February 22, 2006, that caught fire due to an electrical malfunction, only to be told I do not have coverage. I never requested for changes to be made to my policy. My insurance company took off my collision, comprehensive coverage, and my rental reimbursement for my Honda without my authorization. Please read my story. I really need help.
~C.A., Fairbanks, AK
A: I suspect your insurance company mailed you some paperwork when it changed your coverage. But I wouldn't blame you if you didn't read it carefully what with the flood of mail companies send us. Many people in your situation think they either need to contact the Better Business Bureau or a lawyer. Both are fine steps, but the BBB is a private non-profit that can't force a company to do the right thing. And attorneys often cost more money than the dispute was over in the first place. The thing to do is seek out the government agency responsible for regulating the kind of company you have a problem with. In this case, I'm happy to say, that agency is your state insurance commission. File a formal complaint with them and they should investigate and help you resolve your case. If you made mistakes, they may not find in your favor, but the best thing about their review is it's free!
Q: Can you tell me what you know about the craze in selling your home buy owner? What are the big advantages or the big pitfalls that are usually out there?
Thank you for your help since I am now on disability and need to save every penny when selling my home.
~Chicago, IL
A: I sold my home myself a couple months ago and I'm thrilled with the savings. I've also bought and sold properties on my own in the past. Here's some of what I had to say about FSBO deals in my book, The Savvy Consumer.
"The National Association of Realtors surveyed people who sold their homes themselves and only 25% said they would do it again. I'm one of those 25%. I would also buy a home FSBO-style again. I mean, how many times in your life do you get a chance to save not hundreds, but thousands, of dollars? I wouldn't go so far as to say buying or selling a house without a realtor is easy. It's just that it's not that hard –especially not 6%-commission-on-the-sales-price hard. For Sale by Owner deals work best if it's a hot housing market. Don't go this route unless you feel comfortable and confident.
The Realtors' association crows that nine out of ten homeowners end up hiring a realtor after trying to do a FSBO. My answer is "so what?" Why not try to sell on your own to save the money? If you succeed, you're a genius. If you don't, you're right back where you started. Obviously, this advice does not work if you're in a huge hurry to sell. In that case, hiring a real estate agent probably is the best choice. Another option, you could advertise the house yourself, but allow people who come see it to use a "buyer's agent." That way you'll pay half the commission you normally would.
Q: I have lived in the same rental house for 16 years. I am seriously considering buying the house I live in. My landlord has been wanting to sell his rental properties for a long time. He's getting older and doesn't want the hassle. He has told me the cost of this house would be $50,000. I do not think this house is worth 50,000. Alot of work needs to be done. I am wanting to offer $35,000 and possibly going up to $40,000, and I will handle all the things that need to be fixed. Do you think this would be an insult to the landlord, offering this low amount?
~L.H., Dayton, Ohio
Q: I'm in the middle of a divorce and my husband is pressuring me to put the house on the market. I've interviewed five realtors, and there has been a difference of as much as $50,000, in a listing price. Do I go with the highest offer? I don't think so, but i'm not sure what my decision should be based on. Thank you for any advice you can offer me. Honestly, I don't know what I'm doing, and I'm scared.
~C.Z., (please look up 970 area code.)
A: Both of these consumers need to do some comparative market research. The first consumer may not need a real estate agent, since s/he has already found the house and is dealing directly with the landlord. So I suggest attending lots of open houses to see what kind of shape nearby houses are in. Then look in the newspaper to see what other houses in the neighborhood sell for. NOT the listing price! I'm talking about the part of the paper where they list ACTUAL prices after deals go through. Alternatively, if you can get a local real estate agent to share some sales data with you (some send out post cards bragging of the deals they've done) that would help.
Since the second consumer IS in touch with several agents, ask a couple of them to print out comparative sales data from the multiple listing database. Look for houses in your neighborhood that sold in the past year and are similar in size and condition. Your instinct is right not to automatically go with the high bidder. Many homeowners do and their homes sit on the market with no interest. Overpricing really can be deadly.
Q: I just paid $10,000 in closing costs with good credit! What can a consumer do if they find they've been overcharged the day AFTER a rip-off closing?
~C.W., Chicago, IL
A: I received dozens of emails after my story on fake and/or padded closing costs and how to fight back. Just to be clear, in SOME cases, $10,000 in closing costs could be reasonable, because some of the costs, like transfer taxes, are based on the price of the property. But to answer the question, great news: If you feel you've been cheated at closing, you have 3 days after the settlement to CANCEL the transaction! That right is protected by the Truth in Lending Act. As you can see, you really need to do your homework fast. And it's intimidating to try to undo an expensive real estate transaction, but you can if you need to. In fact, if the lender has violated the law in some way, your "right of rescission," or cancellation is extended to 3 years!