Welcome to Chez Cliff!

Nearly ten years has passed since I graduated Magna Cum Laude from the University of Debt.  Accumulating this large debt was very easy.  The nightmare which followed was not so easy.  More money was going out than coming in.  That’s never good.

Fortunately I made that debt disappear.  But the memory follows me to this day.  Anyone who has been or IS under a mountain of debt knows this is not a pleasant feeling.

When the people from Debt Consolidation Care (DCC) contacted me for a review admittedly I was skeptical.  I asked them for their mission statement.  Their response:  Help People.

I like that.

Who is DCC?  An online community, boasting nearly 100,000 members.  These members share and participate in all matters of discussion regarding debt. 

What services do they offer?  If your only interest is to get a quick answer to a question, you can do that.  There are many message boards, covering a wide range of topics.  All of which are at your disposal.  To take full advantage of the site, create a profile and enter your debt information.  Their debt
management experts can then assist you by helping put together a real plan.  Members are taught to take control and be responsible for their own situation.

What don’t they do?  Their job is not to negotiate with debt collectors or credit card agencies. 

Who would use this website?  Anyone with debt related questions or problems.  It matters not how much they might have.  DCC is geared towards helping people manage, reduce and eliminate their debt.

How much does it cost?  Free.

Does it make a difference?  Many members are claiming victory.  Some members celebrate their complete liberation from debt; others celebrate successful negotiation with a collector.  When being crushed by debt, all victories are victories no matter what size they may be.

One victory was saving a young lady’s credit.  She had less than $20,000 in student loan debt.  Her low paying job was not enough to cover her living expenses plus her student loan payment.  She felt bankruptcy was her only option.  Everyone quickly informed her student loans survive bankruptcy.  If she had filed, it would have been for naught.

The members saved her credit.  They got her to call the Student Loan lender.  They worked with her to reduce her monthly payment.

In the end, this site gets a solid thumbs up.

Way back in the day, I did a six week series on Credit Scores.  In this, I discussed ways and methods for affecting your credit score.

Many moons ago, I royally screwed mine up.  If there was ever a person who had a credit score in double digits, it was me.  For the longest time, I did nothing with credit cards and hoped that time would heal old wounds.

Since the start of my project, I’ve studied credit scores like crazy and figured out how to manipulate them.  With this, I discovered the other day that my credit score has sailed right on by the 700 mark.  Way beyond the 700 mark.  I’m extremely pleased with this!

To all of you, have a great "4th of July".  Saturday, was the first day for the "Tour de France".  Let me state for the record that I’m really depressed that 90% of the big players were banned for "suspected drug use".  Afterwords, some "World Cup".  Hey, it was the Frenchies versus Brazil.  And France won, to my surprise.

The entire "credit score process" is being overhauled.  The new credit scores are coming!

In a nutshell, credit scores are going to be ranked between 500 and 990, where each level counts in a similar fashion to an academic grade; 9=A, 8=B, 7=C, 6=D, etc.  For example, 900 and above is considered an "A" whereas 600 and below is considered an "F".

First, a positive note.  The way the scores are setup now, people are always asking if their score is good or not.  The only real barometer we seem to have is the national average (678).  The next major milestone is 700.  Beyond that, we’re not sure.  This new scoring method squarely tells us whether we’ve been on Santa’s good or bad list.

Now the negative.  The following statement caught my attention.  Steven R. Katz, spokesman for Trans-Union said:

Home equity: The general rule of thumb is that you should not owe more than 80 percent of your home’s value, Katz said.  "Little or no equity on your home is obviously a problem," he said.

It is statements like this that burn me up.  "The general rule of thumb is . . ."  Or "Little or no equity on your home is obviously a problem . . ."  I’m sure Mr. Katz, living on his six figure salary can easily say these things.  I wonder when these people are going to climb down from their glass cathedrals.  Who is Mr. Katz to decide what the general rule of thumb is? 

I can play this game too!  Having a tiny group of people make decisions that affect millions is obviously a problem.  The general rule of thumb is people who have done this have been dethroned.  That’s why we don’t have royalty.

So what does this mean for investors?  If you don’t own 20% of your investment property, your credit score will drop even if you have positive cash-flow.  In all the research I’ve done on this, nowhere is there listed where your cashflow from your property is counted in your favor.

I certainly hope I’m wrong on this.

My only hope is that the lending institutions make these judgments for themselves.  Afterall, they don’t make money unless they loan money.  That’s what banks do.  They loan money.

Estimated roll-out time for this new credit scoring system:  6 months.

I admit that for this weeks topic, I really struggled.  I would write it up and then it wouldn’t sound right.  So then I’d start from scratch only to find myself in the same spot.

I found this post on another blog that was written perfectly.  It is always different being able to recount experiences first hand.  This post is about as "first hand" as you can get.

This post entitled "Bad debt leads to good credit?" talks about how too much prudence can also be a detriment.  In otherwords you can have a great credit score but unless you have shown that you can provide payments in a timely fashion over a certain period of time, you may have shot yourself in the foot.

As we all know, credit scores have been my obsession.  Last week, I had an interesting conversation with the Real Estate Agent.

Clifford:  Yeah I’m all about getting my credit score up.
Real Estate Agent:  That would be good.  We need to get your score bullet-proof.
Clifford:  I noticed that I have some open accounts from 10 years ago.  I think I’ll close them so I don’t have more credit outstanding.
REA:  Are you kidding me?  I closed out a credit card that I never used and my score dropped 15 points!

He’s right.  Closing out old credit cards actually hurts your credit score.  Why?  I’m glad you asked.  The credit score is also based on credit history.  You close out history and your score drops.  Credit Score’s like to see nice long credit histories that are in good standing.

CNN finally wrote something that I agree with.  Their article entitled "Five Ways to improve your credit score" pretty much outlines what I’ve been rambling about.  It also addresses about today’s topic.