Archive for August 2009
I read a newspaper article recently that had this headline: “Your Bad Luck Is a Windfall For Airlines”. The article talked about how change fees and cancellation fees produce about $2 BILLION in revenue per year for the airline industry. So missed flights, changed plans, traffic jams, and more… all this “bad luck” leads to billions for the airline industry.
I got to thinking about this and realized that the airline industry isn’t the only industry making a killing off of consumers’ bad luck. Creditors, credit bureaus, and collection agencies make more money when things go downhill for you. (Notice that I included “credit bureaus” in that list… remember, it is more profitable for them if you have bad credit–more on that in a later post!)
These companies can’t really be faulted 100% for this, because it is really widespread and more or less just the way the system works. Your doctor, your mechanic, your attorney, and your plumber also profit from your bad luck… but it’s not like you’re going to do your own brain surgery any time soon, so you’re probably glad that your doctor is around to help.
What we can really take from this is that there is a positive side to everything; and the key for us is finding that and applying it so that it can benefit us. You may think your bad credit is nothing-but-bad for you. Think again. We all KNOW it has a negative side, but look for the positive side.
Many consumers have totally screwed up their credit, and ended up on our web pages in an attempt to dig themselves out. Many of those same consumers then decide that they wanted to help others dig out too, and end up starting their own profitable credit restoration businesses as a result. Some do it part time, some even full time, but in either case they have now crossed over and have learned to profit from their own bad luck.
Even if you don’t want to start a credit repair business, you could still profit from your bad credit. By fixing your credit today, and positioning yourself for the future, you could be setting yourself up to take advantage of one of the biggest financial opportunities of the next 50 years. What’s the opportunity? If you don’t already know, we’ll leave that for another post.
Today I thought I’d share a little snippet of knowledge that I believe is extemely useful and powerful. I’ve been doing research for an upcoming advanced credit course, and this is something that has popped up a couple of times, and that I find really intriguing. If you’re a member of the forum, there is a good chance you’ve seen this discussed in some form or another.
Here is the basic idea: instead of attacking your negative items head-on, find indirect ways of affecting your credit profile that will yield the same results.
The best example of this is disputing name and address variations. Many consumers and professionals have found that by simply disputing old/outdated addresses and other similar personal information FIRST, some negative accounts just “fall off” their report automatically. The reason this works deals with how credit reports are generated and how credit is reported by creditors… but regardless of the nitty gritty details, it does work.
Most professionals agree that the very first thing you should do when cleaning up your credit is get rid of all your incorrect and outdated addresses and personal information (name misspellings,etc). This type of information is the easiest to dispute, meets the least resistence from the bureaus, and often results in more “difficult” items falling off without them ever even being disputed directly.
There are several more “indirect action” methods, as I’m calling them now, that when combined create a whole arsenal of under-the-radar tools for consumers and credit repair professionals that are both effective and low-impact.
In a recent WSJ article it tells how a woman named Susan reduced the asking price of her home by $1,000,000 to $2.25 million… and even after the million dollar discount, nobody was apparently interested.
She got an offer for $1.6 million, which is LESS than what she paid in 1999, and HALF of her original asking price.
These numbers are huge, and I personally would not buy a million-dollar home… but this certainly presents a worthwhile opportunity for those who are paying attention.
Housing prices are dropping and mortgage troubles are multiplying, and if you and I are smart, we will do two things in response to this:
1. Get our “stuff” together now… our ducks in a row, if you will, and start building or rebuilding our credit (and our financial picture) to where it needs to be, and…
2. Hopefully as a result of #1, position ourselves so that when the right half-price housing deal comes our way, we can jump on it. Many who think ahead will jump on not just one, but several.
So rather than stress about the economy and healthcare and whether or not you’ll have a job tomorrow (and believe me, I understand all of these stresses), my advice would be to use that energy to work on positioning yourself for financial success in the future. (That’s what I’m doing.)
Worrying will not make you 1 single cent richer. Getting over it and building credit, saving money, taking action to make more money, and doing more with the money you have–these things will make you a lot of cents richer.
If you start preparing today, EVEN IF YOU MISS YOUR MARK, you will be much better off than those who sat, and worried, and did nothing.