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Americans like banks again, but I don’t

Filed under: Banking on September 24, 2014 @ 11:55 am

The recession permanently changed my view of the American banking industry, but it looks as though other consumers are letting go of their resentments.

Every year, Gallup publishes its Work and Education Poll in which Americans rate their feelings on various industries. The choices range from one, “very positive,” to five, “very negative.”

In August 2014, Gallup surveyed 500 people about 24 industries. The survey shows that Americans, for the first time since 2007, have a positive view of the banking industry. How quickly we forget.

I will say that my view about the industry as a whole is different from my view on specific companies. I have generally positive feelings about the institutions where I bank. I like Sun Trust, where I have my checking and savings accounts. I also am happy with my credit card issuer, Capital One. When I think of the relationships I have with banks I use, I focus mostly on their products and how I’m treated.

However, when I think of the banking industry as a whole, my feelings are much less favorable, primarily due to the subprime mortgage mess and the resulting recession in 2008-2009. That was the root cause of other Americans’ negative feelings about the banking and the real estate industries from 2008 to 2013, according to Gallup.

My husband and I experienced the trauma of the recession first-hand, and it affected our lives in a big way.

In 2003, when housing prices were flying high, I bought my first home in Kansas City. I bought a house I could easily afford, and everyone — including my mom — said buying was a smart decision and that I’d make some money when I sold the house.

Fast forward to 2011, and we had to move. My husband, Joe, had lost his job in the middle of the recession, had gone to grad school and finally landed a job in Georgia. After years of being broke, it was a no-brainer for him to take the Georgia job. But we had to sell our house and its value had taken a nosedive. A few relatives told us to stop making payments and let the bank foreclose, but we didn’t want to abandon our obligations or wreck my credit.

When the first real estate agent we called told us she didn’t think she could sell our house, I almost cried. Our inner-city neighborhood was taking a beating from the recession, and a bigger house right behind ours had just sold for $14,000 after a foreclosure. But, we finally found a real estate agent who agreed to help us. He gave us tasks, such as rearranging furniture and painting our walls a fresh, airy cream color. Whenever there was a showing, I’d throw fresh flowers cut from our yard on the table, load the dogs into the car, park a few blocks away and hold my breath. It seemed like a miracle when a buyer put in an offer for $64,000, which was $10,000 less than we still owed. We had to take out a $9,000 personal loan from our new credit union in Georgia to be able to afford to sell the house. The whole situation left us a bit bitter.

At one point, I even called my mortgage bank and to see if it would let us settle the mortgage for less than we owed. I didn’t expect the bank to say yes, but I wanted to at least ask and also let it know what I thought about the huge role banks had played in the housing crisis, due to their backing risky mortgage loans, and the fact that situations like mine were the result.

I told my bank I could easily let the house go into foreclosure and it could then sell it for $12,000 or so. Or, maybe they could accept $64,000 and forgive at least part of the additional $10,000 I would still owe. They said no way.

I’ll never forget that conversation and the (at least it seemed to me) smug and callous attitude of the bank rep I spoke with. “Banks like yours caused this mess,” I told her. “And now regular consumers like my husband and me, who are trying to do the right thing, are paying the price.” It wasn’t much, but it was my little chance to tell the “banking industry” what I thought.

So, we sucked it up, took out the loan, and felt grateful to have sold our house. We paid off what we owed in about a year, but my unhappy feelings toward the banking industry will linger for much longer.

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Breaches make me rethink my debit card swiping habits

Filed under: Debit Card on September 17, 2014 @ 12:47 pm

I’ve had new debit cards issued to me twice in the past year, both times after big data breaches, and it’s causing me to rethink my swiping habits.

Right now, I swipe my debit card anywhere and everywhere, using it to pay for anything from a $150 vet bill for my dog to a $1.50 bottle of water at a convenience store.

In fact, I used my debit card to buy a cart full of household goods at Target right before the news of that data breach broke.

Unfazed by that experience, I continued swiping — including at Home Depot, where I recently bought painting supplies for a house project. Right before details of Home Depot’s breach went public, SunTrust canceled my debit card and notified me that it was issuing me another card due to possible fraud at a retailer where I’d shopped.

As far as I could tell, there was no evidence of fraud on my account either time. That’s partly why I haven’t changed my debit card use yet; I think my bank is doing a good job of being proactive. In fact, it’s fairly common for banks to automatically reissue whole portfolios of debit cards after data breaches at large merchants, according to David Pommerehn, senior counsel for the Consumer Bankers Association, an industry group.

According to a 2014 survey by Pulse, an ATM/debit network, 84 percent of banks reissued all cards exposed in the Target data breach.

While I appreciate my bank’s vigilance, having my debit card reissued has been quite a hassle for me both times. I have my main debit card on file with my auto insurer, my cellphone provider and my life insurance company. I also have it saved with one or two online retailers that I use frequently enough that I don’t want to enter my card info each time.

This time, I forgot that the card was on file with my auto insurer, and I got a cancellation notice and a call from my agent. That was a bit stressful.

And here’s something that really makes me upset — and a bit mad. The blog Krebs on Security notes that data from The Home Depot breach for sale on the online black market includes the full names of cardholders as well as the zip codes of the store locations where the purchases were made. That information makes it easier for fraudsters to perpetrate ID theft.

Now I’m trying to decide what to do. Most security experts I’ve interviewed advise consumers to use credit cards instead of debit cards for purchases. There are more consumer protections, the credit card isn’t tied to your actual money and it’s generally quicker and easier to get fraud ironed out. (That doesn’t help with the ID theft issue, though.)

My husband and I have tried using a credit card for all of our purchases and paying it off in full each month. The problem: We found that we looked at our money differently and ended up spending more.

But, I don’t really want to keep risking the money in our main checking account by continuing to make all of my daily purchases on my main debit card.

I love the idea of using a debit card connected to another account, with a smaller amount of money in it, for everyday purchases. On the other hand, we already have multiple accounts to help us manage our money, and I’d like to simplify our financial life, not complicate it.

So, for now, I’m going to keep checking my bank account daily, a habit that helps me feel fairly secure. And, I’m going to give my insurance company and cell phone company the card number for a credit card I rarely use for purchases. I’ll just set up an alert to remind me to pay that credit card bill every month. That way, if my debit card gets replaced again, I won’t have to worry about updating my information with those providers yet another time.

But, really, I’m starting to wonder if good old cash or “masked credit cards” that hide your personal information are the only options for consumers who are tired of having our information compromised by big retailers, again and again.

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File credit bureau disputes by mail, not online

Filed under: Credit Disputes on September 12, 2014 @ 10:35 am

Whatever you do, don’t file a dispute with the credit bureaus the way I did.

I recently decided to get serious about checking one credit report every four months.

In August, I checked my TransUnion credit report. TransUnion is one of the three major credit bureaus (the other two are Experian and Equifax), and lenders follow closely what the bureaus reveal about your borrowing and repayment activity. You can get those bureaus’ credit reports for free once a year from AnnualCreditReport.com.

There are a couple of important reasons for checking your reports regularly: to correct any mistakes and to identify possible identity theft.

Almost a sixth of all consumer complaints in 2013 were about identity theft, according to the Federal Trade Commission (FTC). While I didn’t find any evidence of identity theft in my TransUnion credit report, I did find errors. The FTC found in December 2012 that 20 percent of consumers disputed errors and had changes made to at least one credit report. It turns out, I had a similar experience.

For me, there were missing addresses, an incorrect address, two past mortgages were listed as open and our current mortgage was not included.

I did not feel the errors on my TransUnion report were malicious, and none of them reflected badly on my record. I had disputed online with success in the past and decided to do the same again.

I filed the dispute online on August 5, 2014, and received notice that my file had been updated on September 2. Everything was updated correctly, and a new credit report was available for me to print.

That’s the second time I’ve disputed errors on my or my husband’s files online and without supporting documentation. But, that’s not the best idea, I’ve learned.

Tara Siegel Bernard of The New York Times advises against filing disputes online. By sending a dispute by certified mail, Bernard says it can help you if your problem isn’t resolved because you have physical proof of your claim. It also helps if you eventually need to provide evidence for a court case.

Kelly Dilworth writes for CreditCards.com that you may also be forfeiting your right to challenge the error in court by filing online. By clicking the “I accept” button, you might be agreeing that you will accept a decision by a single arbitrator rather than a jury, making it potentially harder to prove your case, Kelly writes. Don’t know where to start? The FTC offers a sample dispute letter.

I was lucky that the errors on my report were not malicious and were easy fixes. But if you are faced with potential identity theft, the FTC has an excellent guide for helping identity theft victims. Much of it is geared toward how to help a victim, but it includes sample letters you or an attorney can use.

The three major credit bureaus have some excellent information on filing a dispute, as well as their mailing addresses and the information you need to provide at TransUnion, Equifax and Experian.

As tempting as the convenience of filing online might be, I’m going to file my disputes by certified mail from now on. It just isn’t worth the risk to do otherwise.

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No emergency fund? Crowdfunding is one solution

Filed under: Credit Cards General on September 10, 2014 @ 1:11 pm

You need a new clutch for your car, your kid has to have surgery, or you’re buried in credit card debt. Should you turn to crowdfunding?

More low-income consumers are turning to their social networks to fund emergencies, according to D2D Fund, a nonprofit that works to increase financial security for low-to-moderate income households.

Without an emergency fund in place, crowdfunding may make sense. The 2014 Consumer Financial Literacy Survey from the National Foundation for Credit Counseling found that lack of “rainy day” savings was cited as the top financial worry by 16 percent of consumers. And 34 percent said they didn’t have any savings, not counting retirement savings.

I’ve been there, back when I was less adept at managing money. In fact, throughout my 20s, I didn’t have an emergency savings fund. One car problem was enough to send my financial stability into a downward spiral. In fact, not having an emergency fund was probably the top reason I racked up credit card debt during those years.

That was before crowdfunding became popular. Though it’s certainly no substitute for having an emergency fund, it does seem to be an innovative way to get money quickly without having to rely on a generous relative or credit cards — especially if you have a compelling story.

I know people who have done crowdfunding, and I’ve even contributed a few times. A few years ago, I was on Facebook late one night when a friend of mine shared an urgent post from a friend of hers who worked at a local vet clinic. A young couple had brought in their pit bull, who was suffering from a twisted stomach and was going to die without immediate emergency surgery. But the couple was broke.

I’m a dog lover, and the post was so heart wrenching that I immediately called the vet clinic and donated $100 on my credit card. The dog ended up being able to have surgery, thanks to the crowdfunding effort, and her life was saved.

If you’re considering donating via a crowdfunding site, watch out for scams, the Better Business Bureau recommends, noting that crowdfunding is “the Wild West of fundraising.”  In order to be absolutely sure your money won’t go to a fraudulent cause, you might have to donate only to people you know personally.

Otherwise, make sure you check out the recipient and cause as well as possible, the BBB recommends. Read through the project page to see if there are links to social media profiles, news stories or other sources that back up the claims. And consider requesting additional information from the campaign administrator before donating, the BBB recommends. Finally, be aware that you’re taking a risk.

If you want to turn to crowdfunding for an emergency, you can do it yourself by spreading the word through social media or your blog, or you can use various crowdfunding websites. For example, GoFundMe.com allows fundraising for a variety of personal reasons, including emergencies, medical bills and memorials. Current campaigns include medical bills for a child with cancer, replacing $4,000 worth of camera equipment stolen from a photographer’s van, and paying $20,000 in lawyer fees for an Ohio TV anchor locked in a legal battle with his former employer.

As with any service, though, it’s important to read the fine print carefully, find out exactly how the process works and check the fees. Here are examples of fees charged on various crowdfunding sites:

  • GoFundMe.com charges a flat 5 percent of all donations, and the payment service they use, WePay, charges 2.9 percent plus 30 cents per donation. That means if you raise $100, you’d get about $92. (Or, if you raise $10,000, you’d get about $9,200.) So, it’s a significant chunk of money.
  • Indiegogo.com, another popular site, charges 9 percent if you don’t reach your goal, or 4 percent if you do reach your goal. Plus, you have to pay 3 to 5 percent on top of that, depending on your bank, in PayPal processing fees. So, you’d lose between 7 and 14 percent of what you raise. There’s also a $25 wire fee for non-U.S. campaigns.
  • With YouCaring.com, you pay a processing fee of 2.9 percent plus 30 cents per donation. (They also ask donors to contribute more to cover the cost of the service.)

In addition to fees, another issue to consider is taxes: According to InvestmentNews.com, crowdfunding is fairly new, and it’s not always clear whether the money you raise is considered a gift or income.

However, if the money is for a family struck by a tragedy — say a fire — then the money likely would count as a gift, according to InvestmentNews.com.

Consult a tax professional before you spend all of your crowdfunded money. You definitely don’t want to get hit with a big tax bill at the end of the year — then you might have to write a compelling story about your IRS woes and turn to crowdfunding yet again.

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New FICO scoring model unveiled

Filed under: Credit Cards General on September 5, 2014 @ 10:21 am

Your credit score could soon rise without you changing a thing.

The FICO score, which most lenders use to assess your creditworthiness, is getting a facelift. The new FICO Score 9 will become available in the fall, although it could be several months before you see a difference.

How will FICO’s latest incarnation benefit you? In two ways:

  • If you have paid-off collection accounts, they will no longer hurt your score. Right now, an account in collections harms your score, even if you have paid it off.
  • If you have medical debts, they will have less of an impact than, say, that crazy buying spree you went on with your credit card. Credit Card Forum says FICO was likely influenced by a Consumer Financial Protection Bureau (CFPB) report that found that people whose medical debt had gone into collections may have been overly penalized by the old credit scoring system.

So, if you have already paid off an old debt that had been in collections or if you have outstanding medical debt, your FICO credit score could see a boost.

Both changes are huge, as they make a lot of sense.

We have time and again heard from readers who saw limited value in paying off debt in collections. Our experts advise readers to pay the debt to avoid a lawsuit (and to end the relentless cycle of phone calls from creditors), but the credit score damage is done and takes years to fall off your credit report, whether the bill is paid or not.

The medical debt change also addresses a big credit score problem. I know first-hand how oppressive medical bills can be. In the past two weeks, I have received five medical bills from my recent gall bladder surgery. Independent of the expense (more than $2,500 so far), there is the pressure of keeping track of what has been paid, what is pending with the insurance company and what you still owe. Anyone who has faced a medical crisis understands the unique challenges those expenses have.

FICO says its new scoring model will better assess “thin files,” or credit reports of people who don’t have much credit history, by looking at types of payments or debt differently, such as the medical bills. But people who have unpaid debt that isn’t tied to health care would witness a drop in their scores, according to CreditCards.com. In contrast, CreditCards.com was told that a typical credit score of 711 could go up by 25 points for those with medical debts but no other serious problems with their credit.

The FICO score, which ranges from 300-850, factors in payment history (35 percent); amounts owed (30 percent); length of credit history (15 percent); and new credit and types of credit used (10 percent each).

My argument for great scores still stands: Pay bills on time and in full, check your credit reports periodically, and you should be just fine. (You can check your reports for free at AnnualCreditReport.com.) But it’s nice to know that if you do get in credit trouble, there are times when you are recognized for otherwise good behavior.

That doesn’t mean you shouldn’t pay your medical bills in a timely manner. I’ll continue to pay my medical bills quickly, as I’ve been doing, partly because it’s easier to track them that way. And you should avoid having any bill go into collections, if at all possible.

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AmEx, Discover top list of most-loved cards

Filed under: Credit Cards General on September 3, 2014 @ 10:09 am

Do you love or loathe your card issuer? A study from consumer research firm J.D. Power ranks customer satisfaction among the top card issuers every year, and this year’s winners and losers were a surprise.

I’m pretty happy with my issuer, Capital One (my main card is its Venture rewards card), so I was shocked to see them near the bottom of the rankings.

For the first time, American Express shared top billing with Discover as the two issuers tied as consumer favorites in the J.D. Power 2014 U.S. Credit Card Satisfaction Study, released on Aug. 27. Both companies scored 819 out of 1,000 possible points. (Overall consumer satisfaction with credit card issuers hit 778, a record high, according to the survey.)

Chase came in third at 789 points. The issuers that ranked in the middle of the pack were: Barclaycard (776), U.S. Bank (773), Wells Fargo (773), Bank of America (766) and, just barely making it in, Capital One at 765 points. The two that scored lowest were Citi at 756 points and GE Capital Retail Bank at 739 points.

The survey asked consumers to rate their credit card issuers on six factors:

  • Interaction with customers
  • Credit card terms
  • Billing and payment
  • Rewards
  • Benefits and services
  • Problem resolution

American Express customers are wealthier, spend more and are less likely to carry a balance than cardholders of other issuers, according to J.D. Power. Discover, in contrast, serves a wider range of customers and keeps its offerings simple: for example, it has a cash-back card with no annual fee.

When Business Insider polled five personal finance experts on what cards are in their wallets, three out of the four who use credit cards said they had an American Express card.

That makes sense. My theory, based on my own experience, is that you’re more likely to love your card issuer — and be treated well by them — if you have more money and manage your credit well.

I think part of the reason I now really like Capital One is that I have a rewards card that comes with nice perks and great service.

Years ago, I was much less fond of the company when I had a basic, low-limit card and was struggling to build my credit after being irresponsible in my 20s. In fact, once, in the middle of a rare nice dinner out with a boyfriend, I remembered in a panic that I had forgotten to pay my bill. As I pulled a scrap of paper out of my purse to jot a reminder, “pay Capital One bill,” the waiter looked over my shoulder and shuddered. “They’re evil,” he said.

But the J.D. Power survey found that only 11 percent of consumers actually reported having had a problem with their credit cards, and that fraud was the most common issue reported (21 percent of all problems.)

According to J.D. Power, fraud represents a chance for card companies to get in good with their customers, if handled the right way. That’s because cardholders then view their card company as an ally against the bad guys.

I can relate. Last summer, a criminal got hold of my credit card number and made a fraudulent purchase. I check my accounts frequently, but Capital One caught the problem before me.

I felt really good about the fact that the company quickly spotted the bogus charge — it felt as though Capital One was protecting me. I also was pleased with the professionalism of the representative from the fraud resolution department, and the fact that I got a new card within a few days. (In fact, the J.D. Power survey showed that getting a replacement card to a consumer within seven days is one of the top way issuers can make fraud victims happy.)

If you’re less than thrilled with your issuer, you might have considered switching. The survey found that 10 percent of consumers switched their primary card in 2014 — and the top reason cited (42 percent) was to get a better rewards program.

If you’re thinking of ditching your card for that reason, The Points Guy recommends crunching the numbers, adding up your costs (such as the annual fee) and comparing that with the dollar value of rewards you receive.

One tip from J.D. Power: Make sure you really understand your rewards before you consider switching to get a better deal. About 37 percent of consumers surveyed admitted they did not “completely” understand their card’s rewards program.

As for me, I’ll be sticking with Capital One, even if that leaves me out of the American Express/Discover love fest for now.

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Frugal when frugal wasn’t cool

Filed under: Credit Cards General on August 27, 2014 @ 12:26 pm

Millennials have gotten a lot of credit for their frugality. And being thrifty is pretty cool amongst my Generation X peers, too — at least, it has been since the Great Recession.

But on a summer visit with my parents, it occurred to me that we of Gen X and Gen Y have a lot to learn about frugality from our parents.

My mom doesn’t call herself frugal. She doesn’t peruse money-saving blogs like I do, and hasn’t ever gone to a clothing swap. She’s never stepped into a thrift store and wrinkles her nose when I tell her about my finds. She and my dad buy cars new, and they shook their heads when my husband Joe and I snapped up a used 1996 Corolla wagon from a Craigslist ad.

But, on my visit home, I realized that my parents, in many ways, serve as much better examples than my friends of how to be smart with money.

While I cooked with my mom, for example, I opened bottles with a wooden giraffe-shaped bottle opener my sister, then age 5, bought my mom at a school craft fair in 1980. I told my mom I couldn’t believe she still had it. “We sanded it once because it had gotten sticky from all the kitchen grease over the years,” my mom said.

During the visit, I also blew my hair dry with the same blow dryer I used in high school. I poured homemade lemonade from a simple glass pitcher my mom has had ever since I can remember.

As cool as thriftiness is now, a disposable mindset prevails. At my house, that bottle opener would have gotten chucked into a Goodwill donation bag eons ago. Ditto the blow dryer and pitcher.

So, here’s what I took away from my visit with Mom and Dad:

  • Buy good quality items, keep them and fix them when they break. As Man vs. Debt points out, while explaining a $500 purchase of quality clothing, frugal doesn’t always mean cheap. Treating everything as disposable, even if you bought it at a thrift store, is anti-frugality. And I admit I tend to get rid of something as soon as it breaks or no longer fits my style. My parents, in contrast, respect and value their stuff more.
  • Spoil yourself a little less. And while my mom and dad almost never go out to eat, my husband and I blow what I’m sure they’d see as a shocking amount of money on Thai, Korean and pizza. Maybe it was growing up with parents who’d been through the Great Depression, but my parents seem to be free from the sense of entitlement my friends and I have about restaurants, vacations and little luxuries. As personal finance blogger Anna Newell Jones writes on And Then We Saved, it’s easy to justify spending money on any “want” by telling yourself, “You deserve it, darling!”
  • Your house doesn’t have to look like a lifestyle blog. Look at all the home decor photos on Pinterest, and it’s easy to feel like everyone’s home is an ideal reflection of their amazing personal style. But I have to wonder how much money Gen X and Y frugalistas have dropped on “cheap” craft projects designed to make their houses look perfect. My mom and dad’s house contains a lot of items from over the years that aren’t necessarily cool anymore, but are tied to good memories (like that giraffe bottle opener.)

It was fun and educational to get a little unexpected lesson from my parents in personal finance — even though they had no idea they were teaching me by example.

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Staggering your credit reports is harder than you think

Filed under: Credit Cards General on August 22, 2014 @ 11:50 am

There are two main things you should do to make sure your credit score is at its best: Pay your bills in full and on time; and check your credit reports periodically.

Paying your bills is (in theory) pretty straightforward. You get the bill, you write the check, you mail it. Even better: You pay through automatic debit each month.

But credit reports? I have yet to come up with a fail-safe system for checking them on time. You can get three free credit reports once a year at AnnualCreditReport.com. You can either pull the reports from each of the three major credit bureaus, Equifax, Experian and TransUnion, at the same time each year, or you can stagger them, and get one every four months.

I prefer to get one every four months, something that Nolo.com recommends. You’ll want to check for inaccurate information, such as an incorrect address, or anything that looks suspect, such as a credit card you aren’t familiar with.

But as convinced as I am that pulling a report every four months is the way to go, it never seems to work out that way. For example, I ordered the Experian report in January 2013 (a New Year’s resolution). Then, I checked Equifax in February 2014 (a late New Year’s resolution). Now, here we are in August, and I’m finally checking TransUnion’s report. That’s three reports in 20 months. Not what I originally intended.

I’m a woman who gives her dog his heart worm medicine every month on schedule. The air conditioner filters are diligently cleaned the first weekend of every month. I adjust our investment portfolio allocation every year on the dot. Why is it that I can’t get on a four-month rotation?

There’s something jarring about four months. You get your checking statement once a month. You get your retirement statements on a quarterly basis. Some magazine subscriptions are bimonthly. But there’s nothing that I know of that is on a four-month schedule. Add to that, you have to keep track of which report you pulled when, because they are free only once a year from each credit bureau. So, you can’t pull the Equifax report in January, then pull it again in May.

Then it hit me. What if I checked the credit reports on anniversaries, birthdates or other memorable dates? Would I be more likely to remember — and follow through — to order the credit reports? It won’t be a perfect four-month schedule, but I can at least get on a routine. So, here’s what I’m going to do:

January (the new year): Experian

April (a birthday): Equifax

August (the start of school): TransUnion

I’ve put those dates in my trusty 18-month calendar, which means they are now real.

So, why is keeping track of your credit reports so important?

Your credit report isn’t just for taking out a loan. It can affect whether you get a job, your insurance premiums, even renting an apartment, Quizzle points out. And don’t just check your reports for errors and mistakes, says Complex Research. Look for ways to improve your credit. Do you have the occasional late payment? Do you not have variety in your credit, which is one element of your FICO score?

There are five basic parts to your FICO score, the score most lenders track to assess your creditworthiness. They are your payment history, which makes up 35 percent; what you owe compared to what credit you have available, which is 30 percent; the length of your credit history, which is 15 percent; and new credit and types of credit used, which are 10 percent each.

My FICO scores have been in the 800s for years, although not because of any aggressive action on my part. I have simply taken advantage of the different parts of the FICO score by living my life.

But, one way I can improve is by making sure I check my credit reports every year. With my new system of using important events to remember to check the reports, I think I can make it work.

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Erasing credit report errors not an easy fix

Filed under: Credit Cards General on August 20, 2014 @ 2:40 pm

In a perfect world, a dispute over a legitimate error on a credit report would get corrected swiftly — as federal law requires. But that didn’t happen for me this year when I filed a dispute with the credit bureau Equifax.

Last winter, I pulled my yearly free credit reports at AnnualCreditReport.com and was surprised to see a negative item on my Equifax report. It turned out my husband had spaced out on paying his personal credit card, on which I was an authorized user. He was over 30 days late, and the red mark ended up on my report.

I knew that as an authorized user I wasn’t responsible for payment of the card. I immediately asked Capital One to remove me from the account. The customer service representative told me the item would be deleted from my credit report.

A month later, I looked at my credit report again and saw the negative mark was still there, so I filed a dispute with Equifax. That was in February, and the expected completion date for the dispute was listed as Feb. 17, 2014.

Under the federal Fair Credit Reporting Act (FCRA), credit reporting agencies have 30 to 45 days to investigate a dispute. Not resolving disputes quickly can hurt consumers: A 2013 Federal Trade Commission study found that one in four consumers had credit report errors that could cause them to pay more for auto loans, insurance and other products.

In the spring, when applying for a mortgage refinance, I checked to see if the dispute had been resolved. I used Equifax’s online dispute status checker, and found it still listed as pending.

I tried to hunt down the Equifax phone number consumers can call about disputes, but Equifax keeps it well hidden. According to their website, you need a current credit report to access the number.

When I checked again a few weeks ago and saw the dispute still listed as “pending” six months after it was supposed to be resolved, I finally caved in and paid $10.50 for a report. I was relieved to see that my husband’s account was no longer listed. I was lucky because some banks, after an authorized user is removed from an account, keep the history of that account on the person’s credit report. Capital One told me it does not, and the account most likely dropped off thanks to action by Capital One.

On Kiplinger.com, writer Jessica Anderson describes similar problems: Equifax never responded to her dispute within 45 days, and failed to respond again in that timeframe after she refiled it. Ultimately, it took her two years to resolve disputes with all three bureaus about an old water bill she never received after she moved.

Her advice: Go straight to the source, the creditor. For her, that was the utility company, where a customer service rep helped her figure out what happened. In my case, I realize I should have just called Capital One back. I have a perk-loaded rewards card with the issuer, and am always provided with great service. I think someone there would have helped me get my problem resolved much more quickly.

Sometimes credit bureaus do flout the law that requires them to investigate disputes in a timely manner, according to Consumerist.com. If you have no luck getting a dispute fixed on your own, you might want to enlist the help of an attorney who specializes in FCRA violations, Consumerist.com advises.

Another option: You can report it to the Consumer Financial Protection Bureau, which offers an online form consumers can fill out detailing their complaint about a credit bureau’s dispute investigation process. The credit bureaus have 15 days to respond to the complaint and issues are expected to be resolved in 60 days.

In retrospect, my issue would probably have been resolved more quickly had I just worked with Capital One or if I had filed a complaint through the CFPB. It would appear that the credit bureaus have morphed into these behemoths that just aren’t equipped to deal with the people whose data they market and sell.

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Avoid financial infidelity by building fiscal trust

Filed under: Credit Cards General on August 15, 2014 @ 9:28 am

When my husband and I were first married, I decided to refinance the mortgage on the house I had bought before we tied the knot. Against the advice of my attorney, who was an old friend, I decided to make my husband Mo co-owner on the house.

My attorney was concerned that if we divorced, I would lose an asset that had solely been my own. But something told me he was wrong, and that by sharing this property with my new, sentimental husband, it would seal our fiscal relationship. I was right.

Mo was overwhelmed with gratitude. He had never owned anything but a car he had bought at the age of 40, and his impoverished childhood made him greatly value ownership. With this one decision, I secured the nature of our financial partnership. For the next 20 years, we would share everything, no matter who made more money, no matter who budgeted the checkbook.

In the years I was home with the kids, not earning a dime, Mo never questioned a purchase I made. When I returned to work, earning half of what he made, he never alluded, even hinted, that I was not pulling my weight. He has repeatedly said we are partners in every way, and his money is my money. In fact, I manage our accounts. He calls me the “finance minister.”

That absolute trust has spared us from money arguments many couples have. If anything, I’ve worried that he puts too much faith in me, and that he needs instructions if something happened to me. So on top of everything in our safe deposit box is a letter that tells him who our lawyers, financial advisers and accountants are and how to reach them. In that letter is a tally of our accounts and what he’ll find in them.

I’ve learned over the years that the fiscal trust we have in each other is not the norm. Other women have told me horror stories about their husbands putting them on austere budgets and questioning their decisions at the grocery store. Some of my friends would respond by buying their kids’ toys on the sly, or sneaking out to buy an outfit while their husband was at work.

I ached for my friends because of the situations they were in, and was thankful that Mo and I didn’t have such a relationship. But whatever the motivation for my friends’ actions, there’s now a term for how they responded: financial infidelity.

An online poll for the National Endowment for Financial Education found that financial infidelity is as significant as sexual infidelity. In the January 2014 survey, which was conducted by Harris Poll for the endowment, 76 percent of those polled said that when financial deception occurs, it affects the relationship. A third of those polled said they had committed financial infidelity against a partner or spouse.

Financial infidelity can come in the form of a secret credit card or bank account, or paying for items in cash to avoid detection.

Daily Worth says there are two main reasons why financial infidelity occurs: The person feels controlled or is ashamed about his or her financial situation. When a spouse is deciding what his or her partner can and can’t buy, the other one might rebel. But also, the infidelity might occur because you put yourself in a financial bind and don’t know how to get out. So, you lie.

Lying about money isn’t just about malicious deception, The Fiscal Times says. There are times when the spouse is trying to be protective; for example, when investments have gone sour.

That’s something I could see myself doing, actually. As I’ve read about financial lies, and congratulated myself that Mo and I would never commit financial infidelity, my conscience has whispered that we are as vulnerable as anyone. Here’s the question I found myself posing: If our investments took a dive, what would I tell Mo?

Reading the study from the National Endowment for Financial Education made me realize that I owe it to Mo to be honest with him if something goes wrong with our investments. While I wouldn’t lie to him about a purchase or a phantom credit card, I might try to protect him from bad news.

And I understand now that if we are going to be the fiscal partners we say we are, then we need to share the bad as well as the good.

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