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Friday, October 23, 2009

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Tuesday, October 20, 2009

How to handle a call from a debt collector

How to handle a call from a debt collector

Bill collectors have a job to do and many collectors perform this distasteful duty in a very professional manner. Debt collectors who act professionally, usually do so because they received training on how to collect debts without violating the FDCPA. In order to stay focused on their collection efforts (and not violate the FDCPA) many collection agencies and independent bill collectors use a dunning script.

Being aware of what a typical script looks like, can help you prepare answers to a debt collector's questions ahead of time and thus remain focused on protecting your rights!
Below are two sample scripts that, in my opinion, are a good way to handle debt collection calls.

Debt Collection Script #1 - You believe the debt to be invalid 

Collector: "Hello, is Bill Debtor there?" (Or is this Bill's wife)?

You: "Who is calling please?" (Do not let the use of your first name throw you off guard, always confirm who you are speaking with. Under the FDCPA, collectors must identify themselves and their company)

Collector: "This is Mr. Collector from ABC collections, the collection agency representing Way Past Due on your outstanding balance of $3,700. I need to know if you are able to take care of this past due bill at this time.

" You: "Hold on while I turn on my tape recorder." (After turning on recorder ask the caller to repeat his or her name, company and reason for calling.) Then say, "I do not believe I owe this debt. Send me the information on this debt according to the Fair Debt Collection Practices Act so that I may review it."

Expect the collector to use questions or statements in an attempt to get you to admit the debt is yours. Do not answer these questions, stick to the answer outlined above and insist on the collector following the FDCPA by sending you the proper information - stay focused
Their script tells them to ignore your response and press on with asking you a bunch of questions. By refusing to take the "bait" you frustrate their efforts because your answer is not on their script. At this point, many collectors are unsure of what to say or do next so they resort to anger. Remain calm and be sure your recorder is on!
NOTE: Once you've verbally disputed a debt, there is only one legitimate question that you need to answer:

Collector: "Please verify your address?"

You: Go ahead and provide your correct address.
DO NOT answer any additional questions! If the collector insists on asking questions, terminate the call. Expect the collector to call right back. Turn on your recorder and answer the phone. Don't say anything except, "I am recording this call and, since I disputed this debt during your last call, this call from you violates the FDCPA and forces me to report your violation to my State Attorney General. Then, terminate the call again.

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Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Questions you should and shouldn't answer from a debt collector

 Beware of what you say to debt collectors!

If the collector owns the debt and you still wish to pay it, then you must decide on how much to pay. Just remember Junk Debt Buyers purchase old debts for pennies on the dollar.

Questions you can answer:

Do I have your address right at (street), (city) and (state) and (zip code)?

Is this (or what is) your daytime phone ___________?

Note: After answering this question, inform the caller that any future calls between (hours) and on (days) are inconvenient.

Where do you work?

What is the address and phone number of your employer.

Note: Collectors are allowed to call and verify employment BUT that is all! They are not allowed to discuss your information, nor are they entitled to any information about your income or any other personal information.

Questions you do NOT have to answer:

* Are you paid weekly or bi-weekly?

* How much is your take-home pay?

* Is your spouse working?

* If so where, how paid, amount, etc.)

* Do you have other sources of income: (child support, part-time work, in home day care and so forth)?

* Do you rent or own?

* How much per month? Is it current?

* How much is your car payment? Is it current?

* What are the make, model, and year of your car(s)?

* Where do you bank? (checking and savings, name of bank)

* Do you have any bank loans? How much do you owe? Are they current?

* Have you ever borrowed money from (parents, relatives, and friends) in the past? If so, how long ago? How much? Did you pay it back?

If you answered any of the above questions then expect the collector to put you on hold while he figures out the best suggestion for you to pay off the debt. Typically they will come back with, "If I could show you a way to pay this debt off, would you be willing to work with me?

Unless they suggest a payment plan that you can afford DO NOT agree to anything! They'll suggest borrowing from others, refinancing your home or car loan, or putting the debt on another credit card. Using these options means robbing Peter to pay Paul and, more than likely, will just push you deeper in debt.

Consider your answer carefully!! Counter offer with a payment agreement of your own (only suggest what you can truly afford) and ask about credit reporting information. You want to keep it off your credit reports so make this part of your payment agreement.

Collectors are trained to dun (collect or ask for payment) in the following priority...

* Balance in full;
* Settlement (in no more than two payments);
* Payments over 3 or more months, usually not to exceed 6 months;
* Good faith payment while you ask others for loan (parents, friends, bank etc.)

...and since they want the full amount as quick as possible, they will refuse just about anything you offer and try to force you to agree to their terms.

Unless you're extremely good at negotiating, never negotiate terms on the phone, you'll lose every time. Offer your terms once (maybe twice) and if they refuse to work with you, end the conversation!

WARNING! Be absolutely certain the Statute of Limitations (SoL) has not expired before agreeing to anything, but especially before making a token payment! In many states, a token payment or a written agreement to pay resets the SoL clock!

Collection agencies, bill collectors and junk debt buyers are trained to get payments in the following priority:

  1. Auto Pay: involves withdrawals from your bank accounts via post-dated checks, automatic electronic withdrawals or similar methods.
  2. Priority Mail
  3. Certified Mail 
NOTE: Although collectors will insist on you paying by their preferred method, there is no law compelling you to pay by any of these methods! Pay by any method that does not provide information about your bank account to the collector. The best method is to pay by bank draft and send it via official mail.
WARNING! Never pay by post-dated check or an automatic withdrawal process. I've seen it happen too many times where the check is cashed early or more funds are withdrawn than authorized! This causes even more problems with returned checks and overdrawn charges!

Once they have a payment agreement, collectors usually end the call by saying:

"Please repeat the arrangement to be sure I've documented it correctly."

"What guarantee can you give me that you'll send the payment?"

"For what reason would you not send the payment?"

Hopefully you have been taking good notes or, even better, tape recording the call (inform the caller at the beginning of the call that you are taping the call) so you can also keep accurate records of what actions were agreed upon.

WARNING! Do NOT send any money until you have a signed payment agreement letter in your possession!

 Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Monday, October 19, 2009

Collector Letters #2 Disputing Debts that You Believe are Still Invalid

 Part 2 of the collector letter series. Disputing Debts that You Believe are Still Invalid

Your Name
Home Address
Phone Number

Attention: {name of collector}
Name of Agency
Agency Address
Account Number: {account or reference number}
Dear Mr. /Ms.
This letter is to inform you that I still dispute this debt. After receiving your response to my original dispute letter, I contacted the original creditor who was unable to verify this account as mine.

In my opinion, you have failed to validate this debt. I must remind you that I originally disputed this debt within the 30-day dispute period outlined in the FDCPA and that I am now also responding in a timely manner to your attempt to validate this debt. Because I still consider this debt as "still in dispute" I do not expect to hear from you again except to provide information or documentation to clear up my reasons for disputing this debt.
I already advised you in my previous letter that I am fully aware of my rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act and that I will not hesitate to take all legal steps necessary to protect myself. Be advised that I am keeping accurate records of all correspondence including tape recording all phone calls.
Signature just above printed name
Your Printed Name

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
Follow me on twitter

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Private schools and your children

What to look for in a private school for your children 

Many parents turn to private schools when it comes to the business of educating their children. While private schools may offer several advantages, often many positive aspects of a private school are not taken advantage of by parents and students. If you are planning on enrolling or have recently enrolled in a private school, consider the following points.

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Speak Up-While some students will make their presence known no matter how large or small their classes  might be, others sometimes get lost in the shuffle. Shy, introverted children may not speak up when they need help or just have a question they'd like to ask simply because they are too intimidated to talk in front of a roomful of other students. Students who attend a private school, however, generally find that their class sizes are smaller and less imposing. Students should take advantage of this by asking questions and participating in class discussions as often as possible. Not only will this allow them to receive the extra help they might need, but it will also give them some practice in speaking before small groups of people...a skill they'll need once they enter college.

Teacher/Student Communication-Private schools typically offer students a more personal, hands-on approach to teaching. Teachers know their students quite well, but they may also be familiar with the families of their students, too.  Because class loads may be lighter, teachers may have more opportunity to speak with their students one-on-one, offering guidance and even counseling, if necessary. Students should take advantage of this fact by taking the time to talk to their teachers about their schoolwork and any other problems or issues that might arise.

Close Friendships-Another advantage of private schools involves the close friendships that can develop among students. Smaller graduating classes typically imply that the students form tighter bonds with each other. Those who attend private parochial schools may also find that they have much in common, including their religious beliefs. Those who do come from different backgrounds should still be able to find acceptance into their peer groups by taking advantage of the wide variety of extracurricular activities and becoming as involved as possible in their school.  Students should look for opportunities to reach out to other students, forming lasting friendships that can follow them into adulthood. Save up to 50% with Student Advantage

Curriculum Choices-Many students also benefit from broader curriculum  choices. Extracurricular activities, such as arts and drama, sporting events, and other areas are often a huge draw for those looking for specialized areas in education. Students need to peruse the course offerings of the school in which they are enrolled, and visit the sponsors of clubs and organizations to inquire about the activities that are offered. They should also talk with the coaches of any sporting events they might be interested in participating in. - Online 3D World - Learn More!

School Property and Grounds-Many parents and students immediately decided upon a certain school simply based on their first impressions. Schools which take pride in their surroundings, including buildings and grounds, often echo that pride throughout the hallways of their buildings as well. Students should look for ways to keep their school beautiful. They could join a garden club, volunteer on weekends, and offer to contribute their talents to improving both the school grounds and the neighboring community, for example by organizing a clean-up of a neighborhood park.

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Security-At many private schools, students enjoy a sense of security that public schools may not always be able to offer. While of course, violence can occur virtually anywhere, private school faculties and staff are often more aware of their students' intellectual and emotional needs. Because of the tighter bond between the students and between students and teachers, students may feel that they can approach anyone on staff in regards to bullying and any other threats or problems. If a student finds himself in this situation, he should be able to tell his teachers, counselors or principals about what is happening.

Parent/Faculty Communication-Finally, because parents are paying tuition and other fees for their children to attend a private school, they should expect consistent contact and feedback concerning their children's education. Parents should feel that their needs are addressed. After all, they are spending a considerable amount of money on their child's education and they have a vested interest in the curriculum and the performance of their faculty and staff.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Collector Letters

A constant question I get from readers is "Mr. Dangerfield, how can I fix my credit myself?"
So, I decided to post a series of letters. This is a sample debt settlement letter you can uses if you are looking to settle a debt with a creditor or collection agency. 7-day FREE trial of 3 Bureau Credit Monitoring!  Plus Credit Report & Score - $0


Your Name                                                                                                                              Date
Home Address
Phone Number

Attention: {name of collector or collection agency}
RE: Collection letter dated {date of letter here} or phone call on {date of call here} reference account #: {account or reference number}
Dear Mr./Ms. {Collector's or Collection Agency's Name}
I do not agree that I owe as much as you claim I owe on the above referenced account. In an effort to save both of us a great deal of time and expense I am offering to settle this account for $ _______.

If you accept my offer, please send written confirmation to my address listed above. Once I receive your written confirmation, I will mail payment to your organization within five business days. If you wish to discuss this settlement offer, I can be reached at (insert daytime phone number with area code). However, please understand that I will not make any payment until receiving written confirmation that you accept my offer.
Your Printed Name

Send this debt settlement letter via "return receipt requested" and keep a copy for your records.

Denied due to bad credit?

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
Follow me on twitter up to 70%.

Friday, October 16, 2009

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Getting your children into private school without having to break the bank

 Private school can be for all kids

Many families often believe that they must be wealthy in order for their child to enjoy the advantages of private school. While a private school education can be expensive, there are scholarships available which can ease the burden of expensive school tuition and supplies. Look What's New! Save up to 69% off retail!

Scholarship Sources-Private school scholarships can be funded in a number of ways. For religious or parochial schools, local churches often contribute a portion of their yearly budget for scholarships, as well as other school-related expenses to help support a local private school. Corporations sometimes partner with private schools, offering money that can be used to fund scholarships for those children who might not be able to afford a private education. In some states, businesses are encouraged to donate funds through a corporate tuition tax credit, which allows the contributing company to reduce the amount of taxes they owe by every dollar they donate to a private educational institution. Click here to search for scholarships at

Qualifications-Unlike grants, scholarships aren't usually based on need. Instead, scholarships are given based on the talents of particular students. Students who are high achievers in academics, athletics, music, and/or the arts are typically considered for a private school scholarship. Because there is usually only a small amount of scholarship money available to award, the competition can be stiff.

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Application Process-The application process should be approached much like any other type of financial aid application routine. Before you begin, you'll need to contact the school or schools in which you are interested and ask for a scholarship packet. This packet should include any forms and deadlines that pertain to each scholarship that is available.

Sell Yourself-Because you will be competing against many worthy scholarship applicants, you must do a good job of selling yourself. Most scholarship review committees require a substantial amount of documentation, and some also require a personal interview as well. You will probably have to submit examples of written work, certificates of achievements, personal recommendations, and any awards you may have received. You'll also need to submit a copy of your school transcript as well as any academic achievement test scores.

Essays-Some scholarship committees require their applicants write an essay on a particular topic. Be sure you research the topic thoroughly and pay attention to the required minimum and maximum word count. Unless otherwise instructed, try to inject a personal note into your essay. Start your essay with an attention-getting paragraph. Keep your ideas clear and concise. Once you've completed your essay, reread it several times, looking for mistakes, including grammar errors and misspelled words. Have someone else read it as well. As you proofread, be sure you've responded to the essay topic clearly and thoroughly.

Interviews-If you are required to participate in a personal interview for the scholarship, dress nicely and try to remain relaxed. Don't be afraid to let your personality show, but conduct yourself in a polite and respectful manner. The whole point of an interview is for the review committee to get to know you.

Deadlines-Finally, before you mail your application, be sure you have answered every question and included all of the requested information. Pay special attention to the deadlines you have been given. In most cases, applications received after the deadline has passed will not even be considered by the review committee.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
Follow me on twitter

Thursday, October 15, 2009

Looking for free rent?

 Ways to live rent or mortgage free

Everywhere you look, the housing crisis is causing homelessness and heartache as the American dream of owning a home goes down the drain. Sub-prime lenders were only a catalyst in what is going down in history as one of the worst housing crisis in history. Buying beyond what was affordable and soaring gas prices have caused casualties that seem to leave those left in the crunch without hope.

Nevertheless, there is hope and you can live without paying rent or owing a high mortgage payment every month. There are three different ways to help you live without paying rent or paying a monthly mortgage and still live in a beautiful home.

There are no Fairy Tales or hokum here, just plain old-fashioned common sense and filling a need where there is a void. However, all of these methods do require flexibility on your part, but in many cases, people have stayed in homes 8 to 10 years and sometimes forever.

How? Here are three ways you can do the same.

* Because the foreclosure rate is so great, there are many houses that have been left unoccupied and without tenants. What happens to a home that is left without anyone living in it? It quickly deteriorates.

Realtors and banks cannot sell a dilapidated house very readily, especially when the lending criteria has become so strict that even people who might be able to afford a dilapidated house, do not qualify for a loan. 0% Real Estate commissions

In order to take advantage of a bad situation, start looking for homes that are in foreclosure and unoccupied and find out who owns them. Offer to live in the house and do the upkeep until it is sold in exchange for free rent and utilities.

To find out who has control of the property, if it’s not listed on a sign outside, check with your local county clerk to find out who handles the foreclosed properties in that area or check the tax collector for the county the house is in. They will be able to give you the tax information. They might even be the dead holders and you might be able to cut a deal with them.

* They say the rich get richer, and that does seem to be the case. With a reported 1% of the entire population holding most of the money in their coffers, the rich also hold numerous houses that lay empty.

They pay gatekeepers to live in their unoccupied houses in order to keep their property safe and make sure the full and part-time staff does their jobs correctly. Most often, you will be able to live in the smaller house that is on the property and is generally the size of a small mansion, in exchange for a monthly salary.

You will need to make sure the staff that comes in does what they are supposed to do and you will be responsible for reporting any problems. In exchange for those duties, you will not only receive a salary, but also all of your expenses will be paid for in most cases such as your rent, utilities, internet, phone, etc.

Additionally, sometimes a stipend for food is put in the as an added bonus, but not always. In addition, you will have full use of the grounds (not the main house) and in many cases, all of the people who come in to clean, etc., will also clean and work on your house as well.

To find this type of job, you will need to go to the expensive neighborhoods and post a signs that you are available to be a grounds keeper. Additionally, network at parties that have swanky clientele.

Ask friends who know the wealthy and post a query on craigslist. The best way to procure this type of job however is by word of mouth. I had a great job like this and I know many other people who have done this as well. You will need references and there will be an interview as with any job as well as a background check.

* Housesit. While house sitting is not as glamorous as being a property manager at a billionaire’s mansion, it’s still a great gig. My best friend and I did this for a few years and while we did have to move every nine months or so, it was free rent and utilities, plus a small paycheck at the end for nine months at a time.

You will find this type of job by word of mouth as well. You can also look at postings on bulletin boards at schools, churches and other such areas. Your job is to keep the house clean and lived in so the owners feel safe while they are on vacation. Sometimes you are also required to watch their pets. If that is the case, make sure you receive money for your time.

Transparent Language

The long and the short of it is, if you are reliable and honest, you can live in a beautiful home free. With a little legwork, networking, posting your information and phone calls, you can live rent-free and mortgage free.

One person told me he has been doing this for the past 30 years. While that seems like a lifetime to most of us, that just a drop in the bucket for him and he is still going strong. That is a lot of money he has saved for other things in his life!

Sidebar: If you are homeless and are unable to do any of the above. Please seek out shelter through places like Mercy Housing, Street Shelters, Above the Line, United Way and other places in your county. They are there to help and can help you as well with transitional housing.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Wednesday, October 14, 2009

Do you know how to ruin your credit?

 Go ahead, you know you want to

Improving your credit score takes some elbow grease. Ruining it, on the other hand, is a piece of cake.
Just a few false moves, and in no time, your credit reputation starts to suffer. It doesn't even need to be something extreme, either. Just a late bill payment here or a retail splurge there is all it takes. Woe to the consumers who make a few missteps in a row and find themselves slogging through suboptimal loans (high rates, high fees) the next time they're shopping for credit.

The surest way to be blacklisted is to break the rules that matter most to the very folks measuring your creditworthiness. Here are the five key gotchas and some ways to stay in the lending world's good graces.

1. Forget to put the check in the mail. Hey, it happens -- you're on the lido deck during your family getaway, and -- doh! -- you remember that the credit card payment was due three days ago. No big whoop, right?

Actually, you are right ... to a point. Credit card companies actually do have a heart (or at least offer a little leeway), and they're willing to let a few missteps slide, particularly in how they treat 30- and 60-day late payments that are brought up to date right away.

Still, if you make a habit of it, prepare for some brutal consequences, since one-third of your credit score -- the most popular being the  FICO® Score & Credit Report from Fair Isaac -- is based on your bill-paying habits. According to, a single 90-day-late payment is as damaging as a bankruptcy filing, a tax lien, a collection, a judgment, or a repossession.

The lesson here is simple: Pay your bills on time. Don't skip any bills -- and certainly not your rent or your mortgage payment. Send in just the minimum amount due, if you have to, but send it in. If you know your payment will be late, call your lender and explain, and he or she might give you a free pass, just this once.

2. Spend up to your credit limit. You've earned it, right? After all, a bunch of bankers in suits have deemed you worthy of a spending limit of $5,000, $10,000, $20,000, or maybe even $40,000 or more on your credit cards. Financing a Bugatti has never seemed so within reach.

Back to earth, Trump wannabe. Sure, you might have a $15,000 credit limit on your card, but that doesn't mean that's how much you can afford to spend. Even a temporary splurge could turn into long-term debt trouble if you're not careful. Just ask Michael Tyson.

Keep those cards in your pockets and avoid coming anywhere near maxing out your credit cards. The measure of debt to your credit limits counts for a whopping 30% of your overall credit score. Mr. Dangerfield's advice is to keep your debt to below 10% of your limit -- and you are paying the bill off every month, right? If you can't handle that, keep in mind that around 30% is "acceptable" to the banking world, and that red flags start waving when your debt-to-available-credit ratio exceeds 50%.

3. Dismiss your youthful indulgences. You may want to deny your past -- that Limited Express charge card you used so often during college was so long ago.

But that's the point. The longer your borrowing history -- particularly if you've been a responsible, card-carrying citizen -- the better your score. Too many people cancel old credit cards when spring cleaning their wallet, and then are shocked when it affects their credit score.

The length of time you've spent in the system determines 15% of your overall score, not to mention the impact of closing lines of available credit that factor into your debt-to-credit ratio mentioned above.

Celebrate and retain your credit history. If you're going to cancel some credit cards, start with newer accounts, since the old ones help establish your long and illustrious credit record.

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4. Sign up for a better card. And then sign up for an even better one. Given the number of credit card solicitations mailed out each year, it seems that everyone is in line to win the plastic popularity contest. Playing the field is tempting, and sometimes you should. If you're trying to pay off debts, shopping around for the best deal makes sense. Most of the time, though, you should stick with what's in your wallet.

Lenders like loyalty. Think about it: If you lent someone money, you'd probably get nervous if that person started asking all of his or her other friends for a loaner, too. Lenders check your credit file regularly to see whether you're dating around. (New credit applications affect 10% of your credit score.) If they see you applying for lots of credit at once, they tighten their purse strings and fire a few warning shots at your credit score.

5. Grease a few palms to get ahead. Dressing to impress and picking up the happy-hour tab are classic tools to get ahead in some circles.  (Especially if I'm in the bar with you)So you may wonder whether there's a way to buy your way to better credit.

There's something to be said for variety. Those with perfect credit scores have a demonstrated history with a variety of loans -- such as installment loans, like a car loan or mortgage, and revolving debt, such as your workaday credit card. Types of loans affect 10% of your overall score.

The problem with trying to quickly add variety to your borrowing portfolio is that doing so may put you in a worse situation than where you began. Remember, when you apply for loans, you'll experience a short-term drop in your score. And then there's the money -- paying interest or annual fees or other costs of borrowing just to add some cards to your credit portfolio.

Don't borrow money just to boost your score, and for heaven's sake, don't believe anyone who tells you that you have to carry a balance on your cards to prove your creditworthiness. That's bunk.

There are just two things that are guaranteed to boost your credit score:

1. Time. (Remember, most bad marks fall off your report after seven years.)
2. The proper use of credit. (Responsible bill-paying habits matter most to those judging you.)

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Finding financial aid

 What Type Of Financial Aid Suits You Best? 

Scholarship Basics -- What You Should Know About Free Money For College

Expert Advice provided by

To some students and parents, the word "scholarship" is just another one of those confusing college terms: student loans, FAFSA, tuition and fees, EFC, grants, and work study. Little do they realize that knowing more about the scholarship process could save them thousands of dollars when trying to cover the cost of their education.

What are scholarships?

Scholarships come in a variety of forms, but are generally considered to be "free money" for college. Unlike loans, scholarships do not have to be repaid to the scholarship provider. Some scholarships are awarded directly to the student in the form of a check, while other scholarships are written out to the student's college or university. Several different types of providers issue scholarships: clubs and organizations, charitable foundations, businesses, schools, universities, government agencies, and others.

Who can get scholarships?

It is a common misconception that scholarships are only for straight-A students. In reality, there are all types of scholarships for all types of students, including those with less than perfect academic records. Some scholarships are for athletes; others are for students planning to study in particular fields; and others for community service. Some scholarship providers just want to reward students for living in a certain city or state! Students also mistakenly believe that only college-bound high school seniors can apply for awards. Scholarships are available for all levels of college study, from freshman undergrads to graduate and PhD students.

How do students find scholarships?

Finding scholarships can be a very time-consuming process, but not if students use a reputable and accurate scholarship search service on the Internet. There are several online resources for finding scholarships for college. Students can also ask their high school guidance counselors about any local or state awards that they qualify for. Students should contact the financial aid office at the college or university they plan to attend to learn if they qualify for any awards provided by the school.

When should students look for scholarships?

Scholarship application deadlines vary greatly. There are thousands of scholarship programs with spring and summer deadlines, and thousands more with fall and winter deadlines. The key is to never stop searching for new scholarship leads, even after beginning the freshman year in college. A good rule of thumb is to continue searching for scholarships for the duration of the college career.

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For college kids and kids entering college -- and their parents -- navigating the minefield of financial aid is a huge challenge. As the number of outright aid grants falls, student loans play an ever-larger role in putting kids through college.
These loans come in many varieties. Some have very attractive provisions and guarantees, but others can spell trouble for even the most responsible young adults. Need money for college? Use FastWeb's free scholarship search to find information on more than 600,000 scholarships!

The cream of the crop

The federal government provides the best student loans. The most common form of federal loan is the Stafford loan, which supplies money either directly from the federal government, or through a private lender.
The primary benefit of Stafford loans is that their costs and interest rates are regulated by law. That means that the fees you'll pay when you first get a loan -- including origination and default fees -- can't be more than a certain amount, recently around 2.5%. New loans also carry fixed interest rates that are usually pretty attractive.

In addition, some Stafford loans are subsidized by the government, meaning that the government pays the interest while the student is in school. In contrast, on an unsubsidized loan, interest accumulates while the student is enrolled, resulting in higher payments once loan repayment begins.

Another federal loan is called the Perkins loan. Reserved for students who have the greatest need, Perkins loans have no origination fee and an even lower fixed interest rate.

Many parents are also eligible for federal loans for their kids' education. Known as PLUS loans, these generally have somewhat higher rates and fees than Stafford and Perkins loans.

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The bottom of the barrel

At the other end of the spectrum are so-called private student loans. Students can get these loans from a variety of private lenders. Large banks usually offer them, and there are also specialty lenders that focus on student loans.

Unlike federal loans, terms on private loans vary widely. Some lenders offer rates below their prime lending rates; others have rates that go into the high teens. Origination fees also come in a wide range, with some lenders charging as much as 12% just to take out a loan.

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Your best strategy

It's important to get the best loan deal you can. With college costs rising far faster than inflation, students can take on tens or even hundreds of thousands of dollars in debt while they earn their degrees.

And it's difficult to fix the credit problems that can result from taking on too much debt. Because of changes to bankruptcy laws, it can be incredibly difficult to get rid of student loan debt -- even when you have a good reason. The consequence of these changes is that students and parents must be just as careful when considering student loans as they would be with credit cards or any other type of debt.

It's most important to understand which kind of loan you have -- the same lenders offer several types of loans, so it's easy to get confused. Federal loans tend to offer better terms than private loans.

In addition, thinking about college as an investment may make it easier to weigh the costs involved with education. A college education increases earning power, but a more expensive, big-name school may not enhance a student's prospects enough to justify the pressure of higher debt. A less expensive school may supply the flexibility to pursue the same wide variety of career options, and perhaps the same opportunities, after graduation.

Whatever you decide, student loans can be a valuable tool to get your degree. If you avoid the pitfalls along the way, a student loan may be the right decision on your path to success.

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Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Does closing accounts hurt your credit score?

Unless your idea of "streamlined" finances is having eight credit cards in your wallet (that's about how many the average card-carrying U.S. citizen hauls around), you've probably considered canceling some of credit cards you don't use often.
Before you dash off "Dear John" letters to your lenders, first make sure you're not doing more harm than good by parting ways.

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The truth about canceling credit cards
Do unused lines of credit hurt your credit score -- or help it? Will removing old information about already closed accounts make you look more (or less) attractive to bankers?

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Great questions. Let's clear up some common misconceptions:

Closing accounts will not undo anything. Once a credit card is in play, there's no denying its existence. It's on your permanent record -- your credit report -- for at least seven years. Yes, even if you cancel the card the next day. Same goes for any red marks (late payments, charge-offs, overspending) associated with your accounts. Sorry, you simply can't deny your past. But at least it will fade away and, for most negative entries, fall off your report in seven years. However, you might not want some entries to disappear ...

Why deny the good? Removing old closed accounts that have no negative items is a bad idea because you benefit from a long credit history, and those accounts speak to that history. (Good entries can remain on your report forever.) Remember, 15% of your credit score is determined by how long you've been borrowing.

Closing accounts might hurt your FICO score. Lenders take a hard look at the ratio between the balances on your revolving accounts and your total available credit. If you do have debt, try to keep it to less than 30% of your available credit. (The ideal number here is, of course, 0%.) Go ahead and keep those lines of credit open, but don't be tempted by untouched lines. When you close out open accounts, those credit lines are no longer factored into your ratio. Thus, your debt as a percentage of available credit will increase. Ouch.

Why cancel cards at all? It may sound like the lending industry loves customers who have gobs of plastic, but as with most things, it's best not to binge. According to Fair Isaac, once you acquire more than seven revolving debt accounts, your FICO credit score begins to suffer a little. And while simply closing accounts won't necessarily have an immediate positive effect, over time it could boost your credit score. So let's see if it's time to break up with some of your banks.

Keep the oldies ... As we said above, commitment counts, and lenders see long-held accounts as proof that you are the responsible citizen that we know you are. So, if it's the choice between parting ways with that dashing new sliver of plastic in your wallet or the faded alumni credit card you got when you still had hair, keep the latter.

... and the goodies. If you get points, miles, cash back, good karma from using a credit card, and -- this is important -- you actually take advantage of the goodies that come with membership, keep the card in play. It's good to know, however, that credit cards with rewards programs are really common. So if the card carries an annual fee, call and ask if it can be waived. If you don't get back what you pay annually to use it, consider cancelling.

Dump the flighty ones. Just because your credit boasted a single-digit interest rate when you got it doesn't mean it will do so indefinitely. Nothing's uglier than paying for a new transmission at a 23.9% interest rate. Those credit cards that have ever-shifting rules and rates require an eagle eye be kept on all those leaflets that come in the mail. If you're not the type to keep your eye on the dealer, this card may be a lot more trouble than it's worth to keep in play.

Keep the ones that stood by you in bad times. If debt was a problem in the past and may become one in the future, keep open those accounts where you have a decent track record -- meaning no (or few) bloopers (like late payments or overages) -- and a longstanding relationship. If the low-interest offers dry up, your room for negotiating a better deal is best with a lender that has fond long-term memories of your time together.

Hold on to your single days. If you're married, don't give up your identity entirely. Simply being an authorized user on your sweetheart's credit cards won't help you establish credit or keep your reputation intact. You must keep at least one line of credit from your single days open and active, and in your name only. If you don't occasionally use the card your file will go dormant and become unscoreable.
In addition to using the nuts and bolts of your credit card program, other factors may play a role in reviewing your lending relationships. Customer service is a biggie for some, and it's usually not an issue until something goes wrong.

Why Wait 3 Months

The right way to close a credit card account
Simply cutting up the card and calling it quits doesn't count. An unused card is still an active account (until expiration), so while you might not be getting a bill in the mail, the bank still counts you as a customer. If your number gets in the wrong hands, you might not notice until it's too late.
To end your relationship with your lender for real, call the 800 number on your card statement and find your way to a live operator. Specify that you want the account closed -- and this is important -- "at the cardholder's request." It's a minor point, but it looks better on your credit report if the account was terminated by the user and not the lender.

Know when to hold them, when to fold them
It's tempting to do a major spring cleaning and dump all the dusty cards from your wallet at one time. However, cutting off too many lines of credit at once can give the wrong impression on your credit score. Again, the level of "acceptable credit" depends on your income. Too high, and you're a risk. Too low, and your banker may wonder why you don't qualify for more. Still, with responsible credit usage -- paying your bills on time, every time -- any short-term blip will be history in no time.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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Tuesday, October 13, 2009

Have you seen the latest Michael Moore movie?

I'm tired of everyman Michael Moore, replete with ballcap and Mom jeans, accosting various corporate headquarters with a bullhorn full of shocking demands. Putting crime scene tape around AIG (NYSE: AIG) and other bailed-out companies was clever, but Goldman Sachs (NYSE: GS) conspiracy theories, politicians' participation in Countrywide's "Friends of Angelo" mortgage program, General Motors' problems, and the concept of a financial coup d'etat have all been done before ... and better.

The rest of the movie is just a series of tangential anecdotal evidence about the perils of capitalism:
  • Companies, including Wal-Mart (NYSE: WMT) and numerous banks, taking out "dead peasant" policies that pay out when rank-and-file employees die.
  • People facing foreclosure ... including one scene in which the bank paid a family $1,000 to get their house ready for sale.
  • Kids sent to a juvenile detention center on trumped-up charges because a judge was getting kickbacks from the private detention center.
  • Airline pilots getting crappy pay.
  • The thoughts of this dude from The Princess Bride ... he is apparently a "Friend of Michael."
Some scenes are heart-wrenching. Some made me angry. But few make any sense. At least not as an indictment of capitalism.

Moore plays on our emotions to hide his lack of rationality. In a country with 300 million stories to be told, it's easy to pick out a few that show the ugly side of capitalism. He asserts that the U.S. should take care of all its people by redistributing wealth. He goes on to voice support for Franklin Roosevelt's concept of a "Second Bill of Rights," which basically says we have the right to live in a utopia where the security, health, and prosperity we all strive for as humans is guaranteed.

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In Moore's mind, we live in the richest country on earth, so everyone should be taken care of. What he fails to grasp is that capitalism is the main reason we have our riches. He also fails to grasp any concept of personal responsibility. Capitalism is a man-made system, so there are plenty of problems -- and we must strive to fix them. But a nanny state with no incentives or personal responsibility is not the answer ... it's a bigger problem.
So, here's hoping that Moore takes an introductory econ course and audits a logic class or two. Then we can talk about his next movie.

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What do you think? Want to sound off on Michael Moore? Have you seen Capitalism: A Love Story? Post a comment below to share your thoughts.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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