Avoid a Credit Repair Rip-Off

The credit repair industry is a $10 billion dollar per year industry and growing every year. With that much money involved, there will undoubtedly be some dishonest people trying to make money off the unwary. They know that most people who are looking for help repairing their credit have never done it before. They also know that they can take advantage of people who don’t know what to look for when seeking help to repair their credit. Being aware of your rights and the laws that these companies must follow will prevent you from becoming a victim of a credit repair scam.

Some of these unscrupulous companies tell you that they can “hide” your bad credit history. They say you can start over with a new credit file. This is often done by giving you a number that they might call a “credit privacy number”, “credit profile number” or something similar. The number will look exactly like a Social Security number and they tell their customers that this number can be used in place of a Social Security number. They say you can start a completely new credit history with this number. Chances are they are selling a stolen Social Security number. Customers who fall for this credit repair scam can be convicted of identity theft.

A similar credit repair scam is to have customers obtain an Employer Identification Number (EIN) from the IRS. An EIN, also known as a Federal Tax Identification Number, is what businesses use to report financial information to Social Security and the IRS. The scammers tell their clients that it is perfectly legal to use an EIN in place of a Social Security number. It is not! Using an EIN on an application for a personal loan or a personal credit card is considered fraud. Even worse; doing this on a mortgage is considered mortgage fraud which is a felony!

An old credit repair scam that is still used is the “Credit Management Plan Scam”. A credit management plan is when the customer makes payments to the credit repair company and then the company pays the customer’s debts. Legitimate companies provide this service but the scammers never pay the debts. They usually tell the customer not to check their own credit report or talk to their creditors. The say “if a creditor calls, tell them they have to talk to us”. If you agree to a credit management plan, make sure you get a receipt directly from the creditor every time a payment is made.

A credit repair company that wants payment up-front is also a bad sign. Under the Credit Repair Organization Act (CROA) it is illegal for companies to charge for services before the service is performed. The CROA, which is part of the Consumer Credit Protection Act, states “No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed”. So if you find a company that insists on payment before they do any work, look for another company.

The CROA also requires the company to provide you with a written contract that explains what services they will do, how soon you will see results, how much it will cost and what rights you have. One of these rights is the right to cancel the agreement within three days and owe nothing. They are required to inform you of this right. The written contract must also include any guarantees that they have given you.

If a credit repair company tells you to do anything that just feels wrong to you, then it is probably a credit repair scam. It could be something like telling you to dispute an item on your credit report even though you know it’s correct, or encouraging you to falsely claim you were a victim of identity theft. It could also be telling you to lie on an application for a credit card or loan. If you take their advice on any of these suggestions, you might end up with legal problems in addition to your credit problems.

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Adults Need Help From Financial Consultants

It can’t be denied that individuals in the age bracket of 80 and above are higher than those in the middle age bracket. Senior people, since they may experience difficulties especially in making decisions, can be victimized easily especially when it comes to money matters. Sad to say, these people don’t know how to defend themselves from these financial frauds and they can’t just take action when they’re victimized.

With the limitations related to age, one must consider the help of another individual, particularly someone who is an expert on that field.

If you belong to this age group or you know someone from this age group and is seeking for financial advice, it would be better to seek a professional. Financial problems especially during the old age can be tough but through the help of a trustworthy financial adviser, you’d be able to effectively handle money. The consultant will guide you in making decisions involving your money.

Looking for a professional financial adviser isn’t that easy because there are things to consider. One would be to look for a financial consultant with a proven track record. If you don’t know where to look, you can always search the internet.

Make sure that the financial consultant that you are going to choose is someone who is knowledgeable and really an expert to that field. You can verify that by asking for educational background and certificates. These will prove that the financial consultant is indeed an expert when it comes to handling money.

You can find a lot of good and trustworthy financial consultants out there. You can ask help from your relatives or your friends to find a professional consultant to guide you in managing your finances. A firsthand experience from people whom you know can be a good basis to determine whether that financial consultant is trustworthy or not.

Being a senior citizen, you might find it difficult to handle your finances or you do not want to worry yourself from all of those money matters. If you want, you can always assign someone to handle them for you. Make sure that the person you assign to handle your finances can be trusted. You can choose a lawyer or a family member to do that for you.

It will be a big help to have a financial adviser by your side because that person would be the one to handle all your financial matters.

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The Things Financial Consultants Do Not Want You to Know

Have you heard about people who work as financial planners? What about financial consultants? If these two terms are familiar to you, then you know they are people who work for investment firms. Investment firms usually earn their revenue by charging you fees and interest after they recommend specific plan of attack or investment product. By leveraging their expertise, you need not work and do your research yourself. But how true is the advice given by these investment firms? Are they solid and sound advises  Could they be deceiving you of your money and gaining on their self-interest only?

The problem with investment firms is that they often have conflict of interest. What is a conflict of interest? It happens when firms pay their salespeople (financial planners, brokers, consultants, etc.) on a commission basis. Therefore, the employees will always push for greater sales and not serving the best interest of the customers (maximizing profit for the particular customer).

You would want to avoid financial people who are involved in broker-dealer networks. Usually, they come from the same source of financial expertise.

Investment types are aplenty out there in the market. There are the bonds, stocks, money-market, mutual funds, options and futures, annuities, limited partnerships and so on. Salespeople often earn the largest percentage of commission from options and futures. How do you know a firm operates on a commission basis? Look for the prospectus and find a term called “load”. If the word “load” is present, it means some of your hard-earned money goes to the commission instead of going straight to your investment.

Beware of salespeople who do not reveal much about the company background, especially with terms like vice president or financial consultant. You have every right to be dubious when you find the investment sounds vague or unclear to you. Never give in to pressure created by the salesperson. You deserve to take all the time in the world to decide on a certain investment type.

You would want to obtain unbiased reviews and opinions on an investment product. Often times, the best in the market can be obtained for free-load (no commission).

Stockbrokers or financial consultant who sells investment products must be professional and responsible. They are largely accounted for giving sound advises to customers who need it. But in reality, most of them are abusing their positions to instill unnecessary fear and devising tedious strategy to boost their own sales.

Personal finance is very important, but you might want to know more on something else, security cameras.

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Roles and Responsibilities of a Financial Consultant

Being good with money is not enough to become an effective financial consultant.

A financial consultant, often called as financial advisor, is an individual who offers professional advice on money management. They serve individuals or organizations who are having issues with debt management, setting up their long term financial goals, developing a savings plan, and who are looking for sound investment advice.

They are also being sought for by couples who are leaning towards expanding their family. They will be asked about a good mortgage rate, when to save for retirement, and how to start a college fund. An effective financial consultant can offer sound advice on all these areas.

A great number of financial consultants work for companies and large organizations that are dealing with financial challenges. Consultants help these entities with their budgeting and debt management issues. Sometimes, they may also be called in to develop retirement and benefits plan for employees.

Individuals who would like to start a career in financial consulting must meet certain requirements. They must have a degree in finance and at least 10-15 years relevant experience. In addition, they must have attended relevant trainings and seminars. It would also be a big plus if they obtain certification from the Society of Financial Advisors.

Aspiring financial consultants can work for mortgage lenders, banks, or tax companies to get valuable experience in handling loans and special financial services. Through this, they’ll get a better understanding of various finance-related issues that they will most likely to deal with when they finally start a career in financial consulting.

Most financial consultants start by working for consulting and financial firms. The good thing about going this route is that these consultants don’t need to think about finding their clients and that they are guaranteed with paychecks every 15th and 30th of the month. In addition, they acquire valuable experience in their profession. They can use this when they decide to work for themselves.

Working as a freelance financial consultant can be extremely overwhelming, frustrating, but rewarding. Although individuals who choose to go this route will do virtually everything to bring in clients to make money, they can have themselves as their own boss and they will have direct control over their working hours. They can also possibly make more money as long as they are dedicated, determined, and motivated. These people can work from the comforts of their own home or can set up their own office.

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