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Saturday, 28 November 2015 06:03

How Much Weight Do You Put in the BBB?

Better Business Bureau: Pay for Play? The Better Business Bureau, one of the country's best known consumer watchdog groups, is being accused by business owners of running a "pay for play" scheme in which A plus ratings are awarded to those who pay membership fees, and F ratings used to punish those who don't. To prove the point, a group of Los Angeles business owners paid $425 to the Better Business Bureau and were able to obtain an A minus grade for a non-existent company called Hamas, named after the Middle Eastern terror group. "Right now, this rating system is really unworthy of consumer trust or confidence," said Connecticut attorney general Richard Blumenthal in an interview to be broadcast as part of an ABC News investigation airing tonight on 20/20. In an official demand letter sent to the national headquarters of the Better Business Bureau Thursday, Blumenthal called on the BBB to stop using its grading system, which he said was "potentially harmful and misleading" to consumers. "The BBB accreditation and the BBB ratings systems is not about generating money," said BBB national president and CEO Steve Cox. He said the A minus grade for Hamas was given in error. "Plain and simple, we made a mistake," Cox told ABC News. Errors seem to abound at the Better Business Bureau. As reported by an anonymous blogger the BBB also awarded an A minus rating to a non-existent sushi restaurant in Santa Ana, California and an A plus to a skinhead, neo-Nazi web site called Stormfront. Each listing cost $425. "They ran the credit card and within 12 hours they were an approved, accredited member," said the anonymous blogger, who runs a site called bbbroundup.com. "They're more interested in the money than their credibility," he said. The BBB's Cox said the three listings were all mistakes made by sales people. "That's an inaccurate statement that business people are able to buy A's," Cox said. "We have more than 500,000 non-accredited businesses who have A ratings," he added. Yet, as part of the ABC News investigation, an ABC News producer with a camera was present as two small business owners in Los Angeles were told by Better Business Bureau tele-marketers that their grades of C could be raised to A plus if they paid $395 membership fees. Terri Hartman, the manager of a Los Angeles antique fixtures store, Liz's Antique Hardware, was told only a payment could change her grade, based on one old complaint that had already been resolved. "So, if I don't pay, even though the complaint has been resolved, I still have a C rating?" Hartman then read off her credit card number and the next business day the C grade was replaced with an A plus, and the one complaint was wiped off the record. In a second case, Carmen Tellez, the owner of a company that provides clowns for parties was also told she had to pay to fix her C- grade, based on a two-year old complaint that she says had already been resolved. The C minus became an A plus the very next day after she provided her credit card number for the $395 charge. "If I'm paying for a grade, then how are the customers supposed to really trust the Better Business Bureau?" she asked. Cox said the examples provided by ABC News were violations of sales policy and not a standard way of doing business. "The BBB is not operating fraudulently," Cox said. In his demand letter to the BBB, the Connecticut attorney general said, "I am deeply concerned that certain BBB practices threaten its reputation and effectiveness as a reliable resource for consumers." Allison Southwick, media relations manager for the BBB, said that the BBB had worked with Attorneys Geneal across the country, including Blumenthal, across the country to fight fraud. "We disagree with his characterization that BBB does not adequately disclose the fact that Accredited Businesses financially support BBB," said Southwick. "However, we are always interested in hearing from our partners in consumer advocacy and are pleased to accept constructive feedback from his office and other consumer advocates." "We have made good progress in working with his office on these issues, and anticipate that we will satisfactorily address his concerns," said Southwick. Better Business Bureau Grading System The Better Business Bureau, a non-profit group that began 98 years ago, instituted its A plus through F grading system just two years ago, replacing a "satisfactory/unsatisfactory" ratings system. Critics say the BBB has used the new grading system as part of an extensive tele-marketing campaign to increase membership and revenue. An ABC NEWS examination of filings with the federal government revealed that at least 25 of the Better Business Bureau's top officers had salaries in excess of $100,000. The head of the Los Angeles Better Business Bureau, William Mitchell, was paid more than $400,000, according to the Better business Bureau. "I think the Better Business Bureau changed course and lost its way by adopting a system of pay to play that maybe enhanced its revenues but also greatly diminished its credibility and honesty," said attorney general Blumenthal, who was elected to the United States Senate from Connecticut last week. "It's very troubling and it could be illegal because the failure to disclose to consumers could well be deceptive and misleading," he added. The ABC News investigation found numerous examples of well known companies that are not members of the Better Business Bureau being branded with F grades, often apparently based on scant evidence or a small number of complaints. The five-star Ritz Carlton Hotel in Boston was given a F rating after only two complaints. "A million customers served, two complaints resulting in an F rating, seems to be somewhat unusual, to say the least, " hotel general manager Erwin Schinnerl told WCVB-TV in Boston. Celebrity chef Wolfgang Puck told ABC News that parts of his food and restaurant empire have received an F grade because he refused to pay to join the Better Business Bureau. "You know, if you become a member, you're sure to get an A, but if you don't pay, it's very difficult to get an A," said Puck, who has been a regular on the ABC News program "Good Morning America" since 1986. "I think where you have to join an organization to get a good grade is wrong," Puck said. This article is courtesy of www.NACSO.org

Saturday, 28 November 2015 06:03

6 Steps to Credit Success

The Credit Guys 6 Steps to Credit Success 1. Evaluate: Our Credit Consultants review balances and credit limits, determining if new credit needs to be established, identifying accounts believed to be inaccurate, and determining how to pay off the negative debt. 2. Establish: Often times new, positive credit will need to be established to maximize our clients FICO® scores. We offer tools from Secured Credit Cards to large Unsecured Lines of Credit for clients who need to establish new credit. 3. Dispute: Inaccurate, unverifiable, or misleading information reporting against our clients are aggressively disputed with the Credit Bureaus AND the Creditors to ensure a permanent change - not a Band-Aid. It is not uncommon for our clients to see over 80% of the inaccurate items removed within 4 to 6 months! 4. Settle: Many times accounts report a balance that is past due. We help our client to settle and pay these past due balances to ensure that these accounts do not appear again on the credit report with a different company. 5. Save: When we have seen improvement on our clients FICO® scores we will identify areas that our clients can save money from having better credit scores. This may include refinancing an automobile, re-applying for insurance, consolidating credit cards, or refinancing their home. 6. Equip: Our clients receive the added benefit of financial tools and credit tips to help them sustain lasting credit success. Others who have used these same tools have enjoyed a lifetime of great credit!

Saturday, 28 November 2015 06:02

How Your Balances Affect Your Credit Scores

30% of your credit scores are determined by your balances. So let's take some time to understand this aspect of your credit report and how it can affect you. Understanding Your Balances: FICO® will calculate the ratio of your available credit to your balances when determining your scores. This is very important for you to remember when trying to maximize your credit scores. Generally keeping your balances below 50% of the credit limit or original amount owed will help you to maintain your credit scores at a good level. To maximize your scores you will want to keep your balances below 10%. Remember FICO® trying to determine the likelihood of you going 90 days late and statistically when your balances are high the chances for financial difficulties raise. Proving your ability to manage your credit will provide the best results for your credit scores. Calculating Your Utilization Ratio: There is often much confusion about calculating your balance ratio. FICO® takes the credit limit of revolving lines of credit and the original balance of installment loans to determine your available credit. Then they take the actual balance of the accounts that are reporting to determine the used credit. The dividing the used credit by the available credit will determine your Utilization Ratio. Total Balance / Total Credit Limit or Original Balance = Utilization Ratio Maximizing Your Scores Now here is where the game gets tricky. I have heard hundreds of times that, I have bought a car to raise my credit scores. This is not a wise way to raise your FICO® score! It will take YEARS to get your balances down to maximize your scores going this way. This is also the reason that you DO NOT want to buy a car if you are trying to finance a home - it will have a negative affect on your score while FICO® is determining whether you can handle the debt. To maximize your scores I recommend the following steps: If you don't have credit cards get 1 or 2. I do no recommend or condone going into debt but there are times that you have to dance the FICO® jig to maximize your finances. So keeping this in mind, if you don't have any credit cards get 1 or 2 with a high limit that you can easily pay off monthly. I recommend getting a name brand card (Mastercard, VISA, Discover, American Express) and avoiding junk cards (which will be covered at a later date) that you can use for a part of your budget such as a credit card just for gas or groceries. This way you know that you will have to pay them off monthly to continue using them. If you have credit cards with high balances pay them down or raise the limit. If you can afford to pay down your cards then do it! Another great trick to maximizing your scores is to ask your creditors for a credit limit raise. Being out of debt is the most important aspect to your finances but if you are one of the millions paying 30 to 40% more monthly on your debt and utilities because of your credit scores then again we are going to do the FICO® jig to help you maximize your finances. Don't refinance your auto loans. When you refinance your auto loan your may be lowering your payment but utilization ratio will be raised again. Also keep in mind that an installment loan will charge you a bulk of your interest on the front part of the loan so many times it may be more beneficial financially to keep the loan instead of paying more interest again. Don't open new installment loans. New installment loans will have a negative impact on your scores and will take months (even years) to recoup the points lost. If you are in the market of buying a new home or a new car you may want to explore these steps. Credit is not something that should be leaned on as an everyday part of life (even though the Credit Reporting Agencies would like that!) but used for large purchases so understanding that your scores may drop when you make a large purchase can help you to plan to maximize your finances! As always if you have any questions for our staff please don't hesitate to call us at 816-463-4626 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. Keith Knapp CEO | Owner Credit Guys

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