Wednesday, October 31, 2018

Experian is Eeeerrilllyy Ironic

I know that this is an advertisement intended for companies who buy customer data (marketing lists) from Experian for marketing purposes.

But, as a credit repair profressional, I find it very ironic that Experian is pointing out the obvious in the errors that are all over the data that it sells to financial institutions in the form of Credit Reports.

The FCRA demands 100% accuracy in the data that is sold to financial institutions - Banks, Credit Unions, Dealerships, any entity who "pulls credit". These entities are buying a credit report every time they use the term "pull credit". In the credit repair industry, our clients in the Mortgage and Automotive space are able to share the original credit reports that they "pull" from Experian. There are errors all over the reports. Missing information primarilly. How can a credit item be 100% accurate if anything is missing? Missing dates of last activity, missing payment history, there is rarely any account listed, good or bad that is displaying information 100% accurately.

How can this be? Eerie Errors Hidden in the Data?

This looks to me that Experian earned 4.335 Billion $ Dollars (USD) of revenue in 2017.

If a company earns 4.335 BILLION dollars, then one would assume that there are safeguards, systems, policies and procedures in place that would demand compliance with United States Federal Laws, mainly the Fair Credit Reporting Act which demands 100% accuracy in the data that it is selling.

Go figure ....

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Monday, September 24, 2018

ECMC screws up: Couldn't prove Mr. Rowe owed on his daughter's student loan

Educational Credit Management Corporation [ECMC]  is the Department of Education's premier student-loan debt collector.

ECMC has appeared in literally hundreds of student-loan bankruptcy cases, and it knows all the legal tricks for defeating a student-loan borrower's efforts to discharge student loans in bankruptcy. And most of the time ECMC wins its cases.

But not always.

 Last June, Judge Catherine Furay, a Wisconsin bankruptcy judge, ruled in favor of Thomas Rowe, who sought to discharge a student loan he said he didn't owe. ECMC claimed Rowe signed a student loan on behalf of his daughter. Rowe said he didn't sign the loan and that any signature appearing on the loan document must be a forgery.

Rowe declared bankruptcy and filed an adversary proceeding to discharge the student loan ECMC claimed he owed. A trial date was set, but neither Rowe nor ECMC filed the disputed loan document with the court.

Judge Furay ordered the parties to file briefs on the burden of proof and concluded the burden was on ECMC to prove Rowe owed on the student loan. Since ECMC did not produce the loan document, Judge Furay discharged the debt.

What the hell happened?

How could ECMC,, the most sophisticated student-loan debt collector in the entire United States, not produce the primary document showing Rowe had taken out a student loan?

I can think of only two plausible explanations. First, ECMC may have had the loan document in its possession but didn't produce it because the document would show Rowe was right-- he hadn't signed the loan agreement.

Second, the loan document may have gotten lost as ownership of the underlying debt passed from one financial agency to another.

Here is the lesson I take away from the Rowe case. If you are a student-loan debtor being pursued by the U.S. Department of Education or one of  DOE's debt collectors, demand to see the documents showing you owe on the student loan.

 Most times, the creditor will have the loan document, but not always.  And, as Judge Furay ruled, the burden is on the creditor to show a loan is owed.

And so I extend my hearty congratulations to Thomas Rowe, who defeated ECMC, the most ruthless student-loan debt collector in the business. Thanks to Judge Furay's decision, Mr. Rowe can tell ECMC to go suck an egg.

Link to source article:


Rowe v. Educational Credit Management Corporation, No. 17-0033-cf ( Bankr. W.D. Wis. June 28, 2018) (unpublished).

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Credit Report Security Freezes Are Now FREE

WASHINGTON, D.C. — The Federal Trade Commission (FTC) issued a reminder that, starting today, consumers who are concerned about identity theft or data breaches can freeze their credit and place one-year fraud alerts for free.

 Credit Repair Security Freeze

Under the new Economic Growth, Regulatory Relief, and Consumer Protection Act, consumers in some states — those who previously had to pay fees to freeze their credit — will no longer have to do so. The new law also allows parents to freeze for free the credit of their children who are under 16, while guardians, conservators, and those with a valid power of attorney can get a free freeze for their dependents.
In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account.
As part of its work to implement the new law, the Federal Trade Commission has updated its website with credit bureau contact information, making it easier for consumers to take advantage of the new provisions outlined in the law.
To place a credit freeze on their accounts, consumers will need to contact all three nationwide credit bureaus: Equifax, Experian, and TransUnion. Whether consumers ask for a freeze online or by phone, the credit bureau must put the freeze in place within one business day. When consumers request to lift the freeze by phone or online, the credit bureaus must take that action within one hour. If the request is made by mail, the agency must place or lift the freeze within three business days.
To place a fraud alert, consumers need only contact one of the three credit bureaus, which will notify the other two bureaus, according to the FTC.
“Credit freezes and fraud alerts are two important steps consumers can take to help prevent identity theft,” the regulator stated on its website. “Identity theft was the second biggest category of consumer complaints reported to the FTC in 2017 — making up nearly 14 percent of all the consumer complaints filed last year. Consumers who believe they have been the victim of identity theft can report it and receive a personalized recovery plan at”

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Thursday, July 12, 2018

NACSO Washington Update: Equifax Hearings

Today there was a hearing in DC regarding an over of the credit bureaus and the FCRA. We thought you may want to listen in so below is a button that links to the replay. 
You can skip the first 18:40 of the replay.
By the Way, Credit Restoration Associates is the only NACSO certified Credit Repair Company in Virginia. See our rating here:
It is expensive to be a legitimate, legal, licensed and bonded credit repair company. Be careful of working with any company or individual to repair your credit who chooses to not get all of the proper licensing. 
To work with a legitimate licensed professional to assist in repairing your credit to help you and your family get "Mortgage Ready", please call our office today: (804) 823-9601. 

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Wednesday, January 3, 2018

A Fight Over the Credit Score that Lenders Use for Your Mortgage

from: The Wall Street Journal:

Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers.
Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie Mae and Freddie Mac to gauge most borrowers using FICO scores. The Federal Housing Finance Agency's ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S.
Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms Equifax Inc., Experian PLC and TransUnion. These lenders argue the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.
Banks generally want to stick with the current system that uses FICO scores, which have been around for decades and are created by Fair Isaac Corp. Ditching the status quo, they say, could lead to an increase in consumers with riskier credit profiles getting mortgages and a subsequent rise in defaults.

The FHFA, which oversees Fannie and Freddie, is weighing whether to change the requirement to allow for the use of another credit-scoring system. In late December, the agency asked lenders and others for formal input on the issue.
In doing so, the FHFA acknowledged concerns about a "race to the bottom" where credit-scoring systems would compete to offer metrics that make the most loans rather than aspire to be the most reliable.
Credit scores help determine who gets a mortgage and on what terms. They played a role in the last housing boom and bust as lenders lowered credit-score requirements, extending hundreds of billions of dollars of mortgages to subprime borrowers.
After the financial crisis, lenders tightened requirements for potential home buyers. As part of this, they required higher credit scores, making it more difficult for borrowers with spotty credit histories to qualify for a mortgage.
That is why some lenders, mostly nonbank firms, want a change in the kind of scores that can be used. They would like to increase mortgage volume by expanding the pool of borrowers.
These lenders view FICO scores as an impediment since they tend to be more conservative than alternatives.
Nearly half of mortgage dollars made in the U.S. go through Fannie and Freddie, according to Inside Mortgage Finance, so their requirements have huge sway over the mortgage market.

Nonbank lenders argue the current system shuts out borrowers who don't use credit either out of personal choice or because they went through a bankruptcy or foreclosure. That is where VantageScore Solutions LLC, the scoring firm that Experian, Equifax and TransUnion launched in 2006, says it can step in.
The company says it can assign a credit score to about 30 million more consumers than FICO. Roughly 7.6 million of those consumers would potentially be eligible for a Fannie or Freddie mortgage, VantageScore says.
VantageScore, for instance, says it will assign credit scores to consumers if they have a credit card or a loan for as little as one month. FICO requires six months. Separately, FICO creates scores for consumers as long as lenders or other entities update information on their credit reports within the last six months. VantageScore says it will go further back than that.
Banks aren't convinced, even if some big ones have begun to experiment with VantageScore for small pools of applicants whose FICO scores aren't high enough for a mortgage approval. "We've got so much experience using the system we're using now," said Gerard Cuddy, CEO of Beneficial Bancorp Inc., a Philadelphia community bank.

The banks' trade group, the American Bankers Association, says the current system allows for strong underwriting standards. Introducing a new scoring model could put that at risk, said Joe Pigg, senior vice president of mortgage finance at the ABA.
It also could open up mortgage lenders to legal liability, the group says. One feared scenario: If one scoring model is found to approve some borrowers, banks could be accused by regulators of discriminating if they use the other model, Mr. Pigg added.
Nonbank lenders counter that the current system is too rigid and unfairly excludes deserving borrowers. Sanjiv Das, CEO of a major nonbank lender, Caliber Home Loans Inc., said VantageScore could open up homeownership to customers including millennials who don't have a credit history because of their age.
"I strongly believe that a large number of customers are being excluded because of the slavish reliance on FICO," Mr. Das said.
Mat Ishbia, CEO of another major nonbank lender, United Wholesale Mortgage, said he was enthusiastic about a possible change. "Doing something just because you've always done it that way isn't a good enough reason," Mr. Ishbia said.
Both sides agree that Fannie and Freddie's credit-score requirements need an update, partly because lenders using credit scores must employ an old version of the FICO score.
But the FHFA appears to have doubts about adding a new credit score into the mix. When asked during a congressional hearing in October about new credit-scoring models that can assign scores to people with limited credit histories, FHFA's Director Mel Watt said, "The notion that there would be substantially more people credit scored and that would increase access if we had competition is probably exaggerated."
The FHFA has several options as it weighs the debate, including: requiring lenders to check credit scores either from FICO or VantageScore; requiring lenders to check both; or allowing lenders to choose between the two scores.
Not all nonbank lenders are urging change. Stanley Middleman, CEO of the large nonbank lender Freedom Mortgage Corp., supports the continued use of FICO, partly because he doesn't see the point of adapting a whole new system.
"I don't think people are getting boxed out of homeownership," Mr. Middleman said. "And I don't feel like we're guilty of something by asking people to have a credit history."
Write to AnnaMaria Andriotis at and Christina Rexrode at
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Friday, December 8, 2017

Business Growth Workshop "Raising Capital For Your Business"

They all turn out great, but this one is different than all of my previous events. The upcoming Business Growth Workshop is getting promoted by SKY4 in Hampton, so it is getting massive TV exposure. 

Also, we look forward to our new segment: "Money Mondays" which will be shown once an hour on SKY4 - On Monday's of course! Tune in or view from their website:  

Check the CRA Facebook Page on Monday for pictures of this event.

Robert's Next Presentation for the SBA and SCORE Richmond

How Student Loan Debt Factors Into your Credit Score:

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Friday, October 27, 2017

How Do Lenders Test The Performance of Credit Scoring Models?

Published by VantageScore Oct 2017:

Credit scores have been a ubiquitous and valuable component of the underwriting process for decades. Credit bureau risk scoring models have been available since the late 1980s and have been used for almost three decades by credit card issuers and auto lenders. Further, it’s been almost 20 years since both Fannie Mae and Freddie Mac endorsed the use of credit scores in their respective automated underwriting systems, known as Desktop Underwriter and Loan Prospector.

The measure of a good credit score model is its ability to rank order. This means that the model effectively identifies those who will remain current on their payments versus those who will not.
So-called “generic credit scoring models” are built using millions of credit files to represent the enormous number of patterns of credit management and payment behaviors for a set of products during a specific time frame and economic condition. As long as those patterns and economic conditions remain fairly stable, the model will continue to rank order as well as when it was first developed.
However, when economic conditions change dramatically (i.e., as they did during the recession), models deteriorate and fail to rank order as well.
For a lender, failing to rank order means consumers who will ultimately default (i.e., fall 90 days or more past due) receive high enough scores to result in credit and loan approvals. In the end, lenders experience higher losses, causing their businesses to be less profitable.
A core responsibility for credit score model developers and users is to validate their models in order to assess whether the models are still performing strongly
For the developer, these validation procedures should assess whether the scoring model effectively rank orders populations and key subpopulations, whether the model has implicit bias that could cause a disparate impact, and whether scores reflect the appropriate level of risk.
A substantial deterioration in the performance of any of these tests, the availability of newly developed data or modeling techniques that could materially improve a model’s predictive performance or ability to score more people should cause the developer to consider developing a new model. To aid lenders and regulators, VantageScore Solutions transparently posts the results of its validations publicly on our website.
Similarly, model users – such as credit and risk functions within lending institutions – should periodically consider their own validation processes. These processes, as outlined in the Office of the Comptroller of the Currency’s (OCC’s) 2011-12 guidelines, should be implemented to determine how effectively the scoring model they are using identifies and measures the risk of their lending strategy on their particular customer base.
Typically, when lenders validate their incumbent scoring model, they also evaluate a number of “challenger” scoring models to determine whether more effective risk management tools are available than the one being used. In the event that a challenger model is more predictive or scores a larger population of consumers with equivalent accuracy, the lender will begin a process of replacing the incumbent model with the new model.
This can be an involved process, requiring redevelopment of strategies with new score cutoffs, rebuilding internal models and decision processes, coordinating and aligning reason codes, as well as initiating thorough audit and compliance reviews. Ultimately, the cost of converting to the new model must be offset by the opportunity to enhance profitability through loss reduction and customer revenue.
Quite interestingly, there is a substantial yet generally invisible benefit of these ongoing validation exercises. Today, as a lesson learned through the recession, credit scores are now often tested on an almost continual basis to determine their effectiveness. As soon as a score fails to deliver sufficient value, it is replaced by newer models that leverage more advanced credit data and sophisticated modeling techniques, which are more representative of the current credit environment.
As such, the industry standard for superior predictive performance continues to improve as the competition for better predictive performance and a larger, scoreable population intensifies with the introduction of each new model.
The latest validation results for the VantageScore credit score models can be found at:

Equifax Reveald Huge Data Breach. I cought this the minute the news broke. 

How Student Loan Debt Factors Into your Credit Score:

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