A week or so ago, Ryan Smith from SpendOnLife had stumbled across some posts I had written about dealing with Collectors. He asked if I’d be willing to mention him in this blog, and I offered to plug his website in exchange for a brief interview.
Q: Could you please introduce yourself and your company? What does your company do?
“SpendOnLife.com is an online resource dedicated to helping consumers achieve healthy credit. Your credit rating can make an enormous difference in your life. By smartly managing your credit, you’ll qualify for low interest rates on new loans and lines of credit. SpendOnLife.com provides you with up-to-date, accurate information and advice about credit reports and scoring
We also educate consumers about the dangers of identity theft and how you can protect yourself from this fast-growing crime. Our goal is to help consumers and students build and maintain a positive credit rating, while raising awareness about the risks of identity theft and credit fraud. We offer knowledge and power: Discover the benefits of developing an advantageous credit history today!” (From http://www.spendonlife.com/aboutus)
Our goal is to be a complete and accurate source for people to get information on credit reporting, credit scores, debt, and identity theft. We try to present this complex information in a way that is useful and applicable to everyday personal finance decisions.
Q: Recently, new legislation was passed that aimed to regulate the credit card companies and help consumers. What affect will this new law have on people’s credit reports and scores?
The Credit Card Accountability, Responsibility, and Disclosure Act (or CARD Act) was passed to try and stop the credit card companies from doing all those sneaky practices like not giving you enough time to pay your bill, allocating your payments towards the balances with the lowest interest rates first instead of the highest, and jacking your interest rate up just because you defaulted with another one of your creditors. In theory, the CARD Act will help consumers pay off their debt faster and build better credit history, credit card companies still find ways around the legislation. For instance, they still can raise minimum payments, adjust interest rates on variable rate cards, and slash limits. Slashing limits in particular has a very negative affect on your score because this raises their utilization rate and lowers their credit score.
Q: In your opinion, what is the biggest mistake people make when it comes to personal finance and personal debt? What can they do to prevent this?
They put in very little time and effort into making big financial decisions. They don’t think far enough ahead about building a credit history, and they only realize the importance of their credit score once it has had a negative impact on their life. The earlier people start building a responsible credit history, the better off they will be.
Q: What are some of the biggest obstacles people face when trying to build or rebuild a credit history?
Most people don’t realize that bad credit history stays on your credit report for seven years. If you are more than 60-days delinquent on an account, your creditor will most likely report that to the bureaus and your score will take a hit. That delinquency will stay on your report for seven years, but usually stops hurting your score after two years or so. I would say the hardest thing for people when building a credit history is practicing patience. There is no quick or easy way to get negative information off of your credit report. You just have to wait it out and try to build positive history in the meantime.
Q: If there was one thing you wish everyone in America knew about credit reporting debt collection, what would it be?
That you don’t have just one credit score. There are tons of different scores based on different sets of information and different scoring models. Each lender uses its own specific set of guidelines.
More info: http://www.spendonlife.com/guide/credit-score-myth
Q: Any parting thoughts?
Credit can have a huge impact on your life. Sure, it’s important when you go to apply for a mortgage or buy a car, but it also affects you on a smaller scale, too, like whether or not you have to pay a security deposit when you activate an iPhone. Your employer, your landlord, and your insurer all have legal access to your credit report, so it’s important you know what’s on there and how you look on paper, so to speak. Checking your credit report yourself will also clue you in to any potential identity theft happening in your name. If you see accounts you didn’t open or credit checks you didn’t authorize, someone could have gotten hold of your personal information.