Your Credit Rating and Predatory Lending
November 5, 2008
Do you have outstanding accounts in debt collection? If you’ve been unable to pay your bills lately, the three major credit reporting agencies know about it. This can make you the target of predatory lending and even identity theft.
People with poor credit and past bankruptcy are frequent targets of predatory lenders. The New York Times recently reported on bank data collection to target people with credit problems.
Businesses go through many sources, including court and bank records, to create financial profiles for over 100 million Americans. This information is sold to banks, mortgage lenders and credit card companies.
These marketing leads are often called “trigger lists”. Lenders target trigger lists to promote high interest products. They know you are already in debt and don’t care if you get in deeper. Accepting these promotions in the mail or over the phone only gets you into more financial trouble.
Predatory lenders started to use “mortgage triggers” in 2005. Mortgage triggers are lists of people who recently applied for home loans. The lists are sold to lenders by the three major credit reporting agencies, Experian, TransUnion and Equifax.
Steve Ely, president of North America Personal Solutions at Equifax, comments that during the housing boom, “The mortgage industry was coming up with very creative lending products and then they were leaning heavily on us to find prospects to make the offers to.”
Responding to one offer means you will likely be targeted for another. “Predictive modeling” is used by financial institutions to determine who responds to their offers favorably. You are “rewarded” with more offers that tempt you to make more poor financial decisions.
If you receive a letter or telephone call offering to extend credit, think twice. Predatory lenders are only looking out for their own best interests. In light of our recent posts, some predatory lenders even attempt identity theft. You wind up with debts you didn’t even create instead of a loan.
Predatory lenders are not the solution to your debt collection problems. Review your credit reports carefully to ensure their accuracy. Consult with a professional about your options. Remember, if it sounds too good to be true – it probably is.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Comments
Got something to say?
You must be logged in to post a comment.
New York Bankruptcy Litigation- Chase Home Finance, Caught Manufacturing Defaults In Bankruptcy Court, Nears Deal With US Trustee
- Can You Wait For The New Bankruptcy Bill?
- What Debt Are Not Covered By Bankruptcy?
- Violations of the Bankruptcy Discharge - Catching Creditors in the Act
- What Happens to My Pension if My Company Files Bankruptcy?
