Getting Credit Help

If you feel you're being unfairly treated concerning your credit, you can invoke your rights by filing a complaint and contacting the Federal Trade Commission or your state agency. It always helps to have a witness or some documented proof to verify your claim.

Tips for Getting the Results You Want
Before you blow-up and go into a place of business and start shouting, sit down and figure out exactly what happened and what you want them to do about it. (Do you want a replacement product, an apology, a refund?)

Before you contact federal or state government office for help, you should make the effort to solve the problem yourself. Following the outline below can help you save time and hassles.

• First let the business know you have a problem. Talk to the business owner, manager, main office or whoever is in charge.
• Be clear about your problem and ask the business to remedy the situation. Be specific about the action you want the business to take.
• If your issue is not resolved, follow up with a letter — that way you have a record of your request. Be sure to refer to your initial conversation in the letter.

Keep copies of all correspondence. Also keep all original receipts, cancelled checks and credit card statements. If a business needs to see your documents, provide a copy—never an original.

If you do not have records, start keeping them:

• Keep a copy of all letters and correspondence.
• Keep a log of all calls and conversations with the company and include the date and the time of the call, what was said and the name of the person with whom you spoke.

If you don't get results, contact your federal or state government agency.

Compile here is a list directory of federal and state agencies equipped to handle your complaint. They also have online many consumer resources with could benefit and protect your life and your families.

Federal Trade Commission
Agency
Consumer Protection
File a Complaint


Government Agencies By State - alphabetical order

Alabama
Office of Attorney General
Consumer Protection
File a Complaint

Alaska
Office of Attorney General
Consumer Protection
File a Complaint

Arizona
Office of Attorney General
Consumer Protection
File a Complaint

California
Office of Attorney General
Consumer Protection
File a Complaint

Colorado
Office of Attorney General
Consumer Protection
File a Complaint

Connecticut
Office of Attorney General
Consumer Protection

Delaware
Office of Attorney General
Consumer Protection

District of Columbia
Office of Attorney General
Consumer Protection
File a Complaint

Florida
Office of Attorney General
Consumer Protection
File a Complaint

Georgia
Office of Attorney General
Consumer Protection
File a Complaint

Hawaii
Office of Attorney General
Consumer Protection
File a Complaint

Idaho
Office of Attorney General
Consumer Protection
File a Complaint

Illinois
Office of Attorney General
Consumer Protection
File a Complaint

Indiana
Office of Attorney General
Consumer Protection
File a Complaint

Iowa
Office of Attorney General
Consumer Protection
File a Complaint

Kansas
Office of Attorney General
Consumer Protection
File a Complaint

Kentucky
Office of Attorney General
Consumer Protection
File a Complaint

Louisiana
Office of Attorney General
Consumer Protection
File a Complaint

Maine
Office of Attorney General
Consumer Protection
File a Complaint

Marshall Islands
Office of Attorney General

Maryland
Office of Attorney General
Consumer Protection
File a Complaint

Massachusetts
Office of Attorney General
Consumer Protection
File a Complaint

Michigan
Office of Attorney General
Consumer Protection
File a Complaint

Minnesota
Office of Attorney General
Consumer Protection
File a Complaint

Minnesota
Office of Attorney General
Consumer Protection
File a Complaint

Missouri
Office of Attorney General
Consumer Protection
File a Complaint

Montana
Office of Attorney General
Consumer Protection
File a Complaint

Nebraska
Office of Attorney General
Consumer Protection
File a Complaint

Nevada
Office of Attorney General
Consumer Protection
File a Complaint

New Hampshire
Office of Attorney General
Consumer Protection
File a Complaint

New Jersey
Office of Attorney General
Consumer Protection
File a Complaint

New Mexico
Office of Attorney General
Consumer Protection
File a Complaint

New York
Office of Attorney General
File a Complaint

Consumer Protection
File a Complaint

North Carolina
Office of Attorney General
Consumer Protection
File a Complaint

North Dakota
Office of Attorney General
Consumer Protection
File a Complaint (form)

Northern Mariana Islands
Office of Attorney General

Ohio
Office of Attorney General
Consumer Protection
File a Complaint

Oklahoma
Office of Attorney General
Consumer Protection
File a Complaint

Oklahoma
Office of Attorney General
Consumer Protection
File a Complaint

Oregon
Office of Attorney General
Consumer Protection
File a Complaint

Pennsylvania
Office of Attorney General
Consumer Protection
File a Complaint

Puerto Rico
Office of Attorney General

Rhode Island
Office of Attorney General
Consumer Protection
File a Complaint (form)

South Carolina
Office of Attorney General
File a Complaint

South Dakota
Office of Attorney General
Consumer Protection
File a Complaint

Tennessee
Office of Attorney General

Texas
Office of Attorney General
Consumer Protection
File a Complaint

Utah
Office of Attorney General
Consumer Protection
File a Complaint (email)

Vermont
Office of Attorney General
Consumer Protection
File a Complaint (email)

Virgin Islands
Office of Attorney General

Virginia
Office of Attorney General
Consumer Protection
File a Complaint

Washington
Office of Attorney General
Consumer Protection
File a Complaint

West Virginia
Office of Attorney General
Consumer Protection
File a Complaint

Wisconsin
Office of Attorney General
Consumer Protection
File a Complaint

Wyoming
Office of Attorney General
Consumer Protection
File a Complaint (request form by email)

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Non-Profit Organization and Advocate

Consumer Action
Organization
Consumer Protection
File a Complaint
An education and advocacy organization specializing in credit, finance, and telecommunications issues, Consumer Action offers a multi-lingual consumer complaint hotline, free information on its surveys of banks and long-distance telephone companies, and consumer education materials in as many as eight languages. Community-based organizations can receive these free publications in bulk.

Consumer Federation of America (CFA)
Organization
CFA is a consumer advocacy and education organization. It currently represents consumer interests on issues such as, telephone service, insurance and financial services, product safety, indoor air pollution, health care, product liability, and utility rates. It develops and distributes studies of various consumer issues, as well as consumer guides in book and pamphlet form. In addition, CFA publishes several newsletters.

HALT:An Organization of Americans for Legal Reform
Organization
HALT's mission is to enable Americans to handle their legal affairs affordably, equitably, and simply. HALT publishes a series of self-help legal manuals, operates a legal information clearinghouse, and advocates for legal reforms which will benefit consumers.

National Association of Consumer Agency Administrators (NACAA)
Organization
An association of the administrators of local, state, and Federal Government consumer protection agencies, NACAA provides training programs, public policy studies and conferences, professional publications, and other member services.

National Consumer Law Center (NCLC)
Organization
NCLC is an advocacy and research organization focusing on the needs of low-income and elderly consumers. Limited resources prevent the organization from responding to individual inquiries. The Center publishes Surviving Debt: A Guide for Consumers. NCLC Reports, a newsletter on consumer law developments, is published 24 times a year.

Bankruptcy

Your creditors will be more interested in finding a way to get back their money than in forcing you into bankruptcy. But bankruptcy is an acceptable legal process that seeks the best resolution for you and your creditors. Although it's preferable to avoid the intrusion, stigma, and future credit problems that bankruptcy brings, sometimes it's the best solution. Once you apply to the courts, all collection efforts against you must stop, you're not allowed to take on new debts, and your assets are frozen.

You have two options:

Ask for a plan
You can apply for Chapter 7 bankruptcy. Here, you ask the court to create a workable plan and to carry it out. Your assets are frozen and a court-appointed person ('trustee") takes control of your finances. The trustee's job is to analyze your assets, income, and debts, then create the plan to distribute your assets to creditors as fairly as possible and in an orderly manner.

Usually, you'll he allowed to keep a certain amount of "exempt" assets in order to maintain a reasonable, modest lifestyle. Your income is usually protected so you can continue to support your family.

Once your assets have been distributed, the balance of your debts will be forgivenexcept for certain obligations, such as child support, alimony, and criminal liability. So, depending on your circumstances, you could he debt-free; although you'll have a damaged credit record that will take time to rebuild.

The process
1. Good professional guidance is advisable, but there are also self filing forms available from books or the local court. (Filing fees are around $200.1 You may file for Chapter 7 only every six years. There's no limit on filing for Chapter 13.)

2.You'll be asked to provide verification of

• income and property owned
• debts
• monthly living expenses
• property you're claiming as exempt

3. After you've tried, you'll attend a "creditors' meeting." Here, creditors can state their cases before the trustee, who then decides what's to he done. Since there usually isn't enough money for everyone, creditors accept a fraction of what they're owed.

4. A bankruptcy stays on your credit report for 10 years. When you begin applying for credit again, some lenders-but not all-will consider you too great a risk. By using tools such as secured credit cards, you can gradually rebuild a positive credit profile.

Create your own plan
Applying for Chapter 13 protection is similar to Chapter 7, but gives you more flexibility to resolve your debts as you see fit.

After filing, you present the court with your own scheme to repay your creditors, usually within three to five years. Generally. you must pledge all your disposable income (what's left after reasonable fixing expenses) to then plan.

If the court accepts your plan, you'll make you, payments to the court-appointed trustee, who will monitor your situation and distribute the money to your creditors. At the end of the process, you'll I w allowed to keep your remaining property, all cI the balance of any debts will he wiped out (unless, by law, they can't be discharged).

If the court doesn't accept your plan, you may he able to submit another plan or switch to Chapter 7.

What's protected, what's not. Some debts are dischargeable (they'll be forgiven even if you don't repay in full). Some assets are exempt (they can't be used to repay debt). Here are some examples of dischargeable and exempt assets in some states; be sure to consult an attorney.


DEBTS:
Dischargeable
back rent, utility bills,
personal loans,
legal or accounting fees,
court judgments

Cannot be discharged
alimony, credit card charges,
child support, tax obligations,
student loans, medical bills,
fines

ASSETS:
Exempt
your main car, tools of your trade, food, clothes, family heirlooms

Not exempt
luxury items, limited personal property, investments, cash


Notes:
Secured loans. Creditors with secured loans loans for which you've specifically pledged your home, car, or other property) are first in line to be repaid from the sale of that property.

Fraud warning. Some people try to use courts to avoid debts. It you've transferred property, withdrawn lots of cash, or bought luxury items immediately prior to filing, a court will investigate the possibility of fraud.

Using the credit you've got to get more

To a lender, the most attractive borrower is someone with assets under the lender's control. If you have proven financial responsibility, you're even more attractive. With these two advantages, you can often get a loan more quickly and at better terms by leveraging the power of your assets.

Your home
One of the most common and most tempting resources for a loan is your home's equity (the difference between what you owe and what the home is worth). Many lenders look for at least a 30% difference. In exchange for the loan, you'll give the lender a secondary interest in your home. (Your original mortgage lender has first interest.) If you fail to make your home equity loan payments, the lender can force the sale of the home but won't receive any proceeds until the lender of the first mortgage is paid in full.

There are two kinds of home equity loans; A "second mortgage" is a lump sum that you repay in scheduled installments. There's also a "home equity line of credit" where you can borrow any amount up to the limit, at any time, for any reason. You then repay it the same way you repay your credit cards.

Your securities
Brokerage firms lend money "on margin." The most they’ll lend is a percentage of the total value of the “marginable” securities in your account (the ones the broker considers valuable enough to protect the firm if you default). The broker gives you the loan and you give the broker the right to sell the securities in your account if you fail to repay. You pay interest on the loan arid repay it as you would any other.

The attraction of margin loans is the interest rate: It is usually a few points less than you'd pay at a hank. Margin loans can he risky, however. If the prices of your marginable securities drop to a point where their value doesn't leave enough protection, the broker will make a margin call" (ask you to put in more money or pledge more securities). Failure to meet a margin call means instant sale of the securities you've already pledged—often at a loss.

Your life insurance
If you have a whole life policy (not term insurance), you maybe able to borrow an amount equal to its "cash surrender value." This is exactly what it says: the amount of cash you'll receive if you decide to stop paying premiums and surrender the policy. The longer you own the policy (and the more premiums you pay), the more the (and surrender value increases.

The interest charged on such a loan varies from company to company. Often, though, it's lower than a bank loan. An insurance company also isn't as concerned about being repaid so long as you make the interest payments on schedule. If you die before the loan is repaid, they'll simply deduct what's owed to them and then pay out the remaining value of the policy.

Note:
Borrowing from 401(k)s. You can also borrow from your 401(k) retirement plan. Different plans have different restrictions, and you'll be required to make regular repayments with interest. So, not only will you borrow from yourself, you'll also be paying interest to yourself.

How credit card payments work

Credit card issuers explain their methods for calculating finance charges (interest) on the back of each statement. The most common method is "average daily balance.' To calculate this balance, the issuer totals what you owed at the end of each day in the billing period, and then divides that amount by the number of days in the period. That reveals the average amount you owed at the end of a day during that period, and determines the interest charged.

Here a comparison
By making a large purchase at the start of a billing period instead of at the end, you end up paying more in interest. You will notice how the average daily balance rises, even without new purchases, because there are more (lays with the higher balance outweighing the days with the lower balance.

Billing period. Many billing periods aren't a month long. Also, they don't always start at the beginning of a month or end at the end of a month. So you could use the card at the end of a month and have if appear at the beginning of your next billing period.

Grace period. Some issuers give you time (a grace period) from the end of the billing cycle to pay your bill (commonly 20 or 25 days). If you start the billing cycle with a $0 balance and pay in full by the due date, you'll pay no interest. The moment you carry over a balance to the next period, the issuer will immediately charge interest on every purchase.

Day 25 Payment due date. You must make at least the minimum payment by this date. If full payment arrives by now, the purchases will be interest-free.

How much goes to pay interest. This example keeps the same minimum payment for the entire payment period (for simplicity's sake). So, while not entirely accurate, it provides a sense of how much you'd pay in interest by making only minimum payments on a $1,000 credit card purchase. In this case, it would take you 43 months to repay in full and cost $360 in interest.

Month | Payment | Interest portion | Total interest | Balance owed
01 | $32 | $15 | $15 | $983
05 | 32 | 14 | 72 | 912
10 | 32 | 13 | 138 | 818
15 | 32 | 11 | 196 | 716
30 | 32 | 06 | 322 | 362
40 | 32 | 02 | 357 | 77
43 | 32 | 00 | 360 | 00

Notes:
Teaser rates. Many card offers promote low introductory rates. When the introductory period ends, the card issuer will automatically begin charging the higher interest rate on any balance you carry at the time.

Can you do better? Many experts say card issuers are often willing to negotiate the annual fee and even the finance charge, particularly for good customers.

Different cards, different credit

Essentially, a card is an authorization-proof that someone has given you credit. By using a card, you tell a seller, "This financial institution has authorized me to buy your product without cash and has guaranteed your payment." The seller then contacts an agent of the card issuer to verify that you still have an account in good standing, and asks you to sign a receipt for the item. The kind of card you carry, therefore, shows the credit requested and received.

Repay at your own pace
The most popular form of credit is an open line you can tap into-and repay-at your own pace (as long as you make at least the minimum payment required). It can take two forms:

Unsecured revolving credit. For this type of credit, you get a "credit card." 'There's a maximum you can borrow, and any amount you repay is immediately available to borrow again. You may pay interest on what you borrow or you may be given a period of time to repay in full without interest. Most credit cards are "unsecured," which means the lender isn't entitled to take specific property if you don't repay.

Secured revolving credit. People with poor credit or no credit history can usually receive a secured credit card through MasterCard or Visa. (Some retailers also offer secured cards.) It looks and works like any credit card, with this main difference: You have to keep money in a savings account (as "security") and allow the card issuer to tap into it if you fail to pay your bills. The amount of credit you receive is usually linked to the amount you deposit.

Repay in full each time
Travel and entertainment cards (also called "charge" cards) show that you've been extended credit, but only for short terms: You're required to pay in full by the due date for any item that appears on your statement. There are, however, no interest charges. American Express (which allows you 30 days to pay) and Diners Club (which allows you 6o days to pay) are the two most famous issuers of this credit.

Pay as you go
You can also get a debit card, which doesn't technically give you credit. Instead, every time ''u use it your bank takes the money from your account ("debits") and sends it directly to the merchant. If the money isn't in your account, the transaction will be rejected. ATM cards (the cards used to do banking at "automated teller machines") are the most popular debit cards.

Debit cards don't offer as much protection against fraud or billing disputes as credit and charge cards. For one thing, it's harder to recover money already paid from your account.

Other benefits
Depending on who offers you credit and the level of credit you receive (e.g., a basic card era gold card), you might receive added benefits such as:

• guaranteed hotel reservations
• double the manufacturer's warranty and extended service agreements on most products
• free collision coverage on auto rentals (no need to buy the agency's coverage)
• travel and emergency assistance, including medical and legal referrals when traveling and arranging emergency transportation to hospitals
• assistance with replacing lost tickets or luggage
• language interpreters
• delivery assistance for prescriptions, emergency cash, replacement for lost or stolen cards or valuable documents
• trip assistance, from ATM locations to weather reports and health and legal requirements in your destination

To find out your benefits, read the brochure that comes with your card or call the customer service number on the back of the card.

Notes:
Rebates. Some card issuers promote rebates on Purchases. Look at these closely. For example, in one promotion a card issuer offered a 1% rebate-on a year's worth of finance charges, not purchases. So, if You spent $15,000 on the card in a year and paid, for example, $275 in interest that year, you'd receive a $2.75 rebate.

The PIN (personal identification number). To use your card for cash advances or withdrawals, you'll need to create a PIN (a password). Protect your PIN very carefully. Don't write it down, tell it to anyone, or let it be overheard.

Co-branding. You can get a credit card (typically Visa or MasterCard) that offers promotional tie-ins from other companies. Every time you use the card, for example, the company (e.g., an airline or a car maker) awards you points you can then use to buy their products at a discount or get them for tree. Read the terms carefully; some promotions are better than others.

Types of loans

In theory, virtually anyone can lend you money, from an uncle or employer to financial companies. In practice, you could get a better deal if your choice of lender is based on your reason for wanting the money.

For a specific purpose
Some lenders will extend credit only if you'll use the money in I that further their business. To them, the top consideration may he the purpose of the loan; second, whether you're pledging the purchased product as security to protect them; and third, the quality of your credit rating.

Seller financing. To make selling their products easier, many department stores, retail chains, and ear dealerships serve as middlemen for lines of credit just as they do for the products they sell. They don't lend you the money to buy their products; they arrange loans from other lenders. For example, a store or car dealer may get you a loan from a finance company and receive a commission for the deal. In effect, they sell you a product, then sell you a loan to pay for that product.
You often have to pledge the property you're buying as security, in case you fail to repay the loan. The finance company legally owns the product (e.g., your car) until you repay the loan, and it has the right to repossess if you fail to make payments on tune.

Special interest financing. Mortgage lenders don't sell homes, but they'll lend money only if it's used to buy a home. The money they have to lend has been earmarked for home loans and is priced accordingly. Also, since home loan’s are large amounts, lenders need to have a security interest in property of equal or greater value: namely, your home.

Lenders of student loans also insist you use the money for this specific purpose. Since you're buying an education, however, there's no tangible property for you to pledge as security. That's why many student loans are government guaranteed to encourage banks to lend.

For any purpose
Some lenders extend credit without requiring you to specify how you'll use the money. Their first consideration is whether you're pledging all asset as security; second, the quality of your credit rating; and third if considered at all), your purpose for the loan. Here are some examples:

Asset-based loan. A bank, securities broker, or insurance company may let you borrow against the value of your insurance, home, or investments if your property has enough value. typically, these loans have lower interest rates than conventional loans. The lender reasons that if you own these assets, you've already exhibited financial responsibility and credibility. You're also protecting the tender by pledging assets of sufficient value to cover the loan in case you default.

Line of credit. This type of loan is a very useful tool in today's world although it's tempting to use it indiscriminately. You're given a credit limit (a maximum amount you can borrow). Then you're free to borrow up to that limit at any time for any purpose. Credit cards are the most common example, but home equity loans can also he lines of credit. Many banks offer lines of credit and use your checking or savings account as security.

Personal loan. You may get a loan on the strength of your name, or be asked to pledge an asset as security

Pawning. Pawnbrokers lend money to anyone without checking credit. You bring in something of value, the broker lends you a small percentage of the item's value and holds the item for an agreed period of time. You can pay off the loan within that time and reclaim your property, but if you don't, the broker can sell it. Interest on these loans tends to he high. You may also have to pay for insurance and storage.

Credit unions. A non profit alternative to banks, credit unions are run for and by their members. Some are open to the public but most are sponsored by an employer, association, university, or government, and are open only to members or employees and their families. Loans are made from money deposited by members. Generally, rates are lower than for bank loans.

Private finance companies. Often open to lending to people with poor credit records, these companies offset the increased risk by charging much higher rates. In other words, one of the downsides of having poor credit is you have to be willing to pay a lot more for a loan in order to convince someone to lend you money. (The companies-and the terms they offer-can range from reputable to very questionable.)

Note:
Mutual support. Some retailers and lenders are owned by the same, larger company (e.g., Sears and General Motors), and support each other. For example, if the retailer needs to boost sales, the finance company may offer low-cost loans "for a limited time only." In any case, financing your purchase through the retailer means the larger company earns you as a customer twice; once for the product, and again for the loan.

What's in a loan

The reason for having credit is to get a loan when you need it. A loan can be large or small; It can be instantly available through a card or it can require your signing a complicated set of documents. And although different kinds of loans come with different terms, virtually every credit agreement covers four key points:

How much you can borrow
The amount you borrow is called the "principal." Sometimes you borrow the principal all at once. Other times, with credit cards for example, you have a "line of credit" that lets you borrow up to your "credit limit" at any time.

With credit cards and charge cards (where you pay in full each month and aren't charged interest), any principal you repay becomes available to be borrowed again-as long as your credit remains in good standing. This agreement to let you borrow, repay, and borrow again is called "revolving credit."

In a loan document on most card statements, you may see the words “amount financed.” It simply means the amount you borrowed.

How much it will cost
The most common cost of a loan is the interest (sometimes called a "finance charge"). Usually, your payments are split—part goes to repay what you borrowed and part goes to pay the interest.

There may also be fees of various kinds. Many card issuers charge annual fees similar to dues) that they sometimes waive for special promotions or upon request. Many also charge fees for cash advances. Lenders of mortgages usually charge upfront interest called "points" and other, connected fees for appraisals, closing costs, and more.

Every lender is required to show you the annual percentage rate (APR). It takes into account the interest plus certain fees to show the actual cost of the loan for the first year.

The payment plan
A payment plan has three parts: the length of time you're given to repay the loan, the schedule of payments, and the amount of each payment.

Charge card issuers give you the shortest time-3o or 6o days. Mortgage lenders give you the longest-up to 30 years. Credit card issuers let you take as long as you like, if you always make the minimum payment required.

Although there are many different repayment schedules, the most common is once a month. Your payment amounts may be "fixed" (stay the same each time) or "adjustable" (change according to a formula at periodic intervals.

What if you don't repay
Failing to repay on schedule can put you in default. The lender is then faced with finding another way to be repaid. If your credit report shows you to be a risk, the lender will want "security." In a secured loan, you give the lender the right to sell specific property (called the "collateral") if you default. In this way, you give the lender a sense of security, which makes it easier for him or her to say "yes" to the loan.

Usually, the collateral is the property you're buying with the loan, such as a car, home, or large household item. But lenders can also ask borrowers to pledge an unrelated item of value. (The item chosen is negotiable, and you have to weigh the risk of losing that item against your need for the loan. The law also protects you from being forced to pledge certain necessities.)

By law

• Limits on security. By law, creditors can't ask you to pledge as security any clothes, furniture, or other personal belongings unless they're the actual items you're buying on credit. Also, if your car is repossessed, you're entitled to anything left in it (although you may only have this right if you call within 24 hours).

Articles

A credit series that enables your time, money, and intelligence.

The big picture
The concept of credit
Your credit profile
The credit reporting system
Protecting your credit
What's in a loan
Types of loans
Different cards, different credit
Understanding your credit card statement
Knowing your credit card rights
How credit card payments work
Using the credit you've got to get more
A word to the wise – Buyer beware
Handing too much credit debt
Bankruptcy
Who's who in the credit world
Getting Credit Help