Hey, Credit Heroes!
Are you ready for some Scary Credit Repair Stories?!
In honor of Halloween, I went hunting for tales of Nightmare Customers, Vampire Banks, Zombie Employees, and Demon Debt Collectors.
And on this week's Podcast, I share the scariest Credit Repair stories that will keep you up at night!
Most scary stories are cautionary tales designed to keep people safe when they're out in the real world. And the world of Credit Repair has a whole lotta financial dark alleys and boogeymen to keep us up at night.
Now, a few Halloweens ago, I shared the Scariest Credit Repair Story of my life. I explained that a Bank Error nearly cost me my house, and then I shared how a B of A mortgage SCAM nearly cost me everything – including my sanity. Eventually, I found an excellent Exorcist – aka a Lawyer, and he killed those monsters.
So this year, I decided to collect stories from our Facebook community and around the industry, to have a little more fun while we explore these cautionary tales!
Now, it's important to remember…
Some of these stories were anonymous, and for some, I changed the details to make sure we didn't call out any companies or individuals by name. Other than B of A, of course. I don't like them one bit. But I actually think all banks are scary.
Okay, let's begin…
To start us off with a quick scare, how about a tale of the MOST MONSTROUS INTEREST RATE OF ALL?
About ten years ago, Toni R. of Texas had a motorcycle accident that resulted in medical expenses that she couldn't afford. She went through a bankruptcy, which ruined her credit, and made it hard for her to qualify for credit cards. But she was able to get a Bankcard that specifically targeted people with bad credit and had an initial interest rate of 29.9%. Toni accepted this. Sure it was high but fair, considering her score at the time. Life was finally getting back to normal when six months later, she received a notice informing her that her rate had jumped from 29.9% to 79.9%! She reached out to the media, it was a big news story, and the Bankcard CEO had to say it was a mistake. Her rate was trimmed to 59.9%. Toni still tried to cancel her card, but the process took six months. During that time, the company continued charging her these incredibly high fees and eventually put her into collections when she didn't pay them.
Toni finally got back on her feet after using some time-tested credit-building techniques, but that interest rate sent a chill up everyone's spine!
Are you ready for the next one?
Okay, TheTaxman on Reddit told a story about some TERRIFYING CAR PAYMENTS!
He said, "It amazes me what people don't understand about credit. I have these friends that suck with money, and every time I learn something new about their finances, I'm just floored. The latest is they fell behind on their car payments but apparently, they thought they were told that the missed payments would just get tacked on to the end of the loan. They now have three years straight of 30 days late payments in a row, plus they just bought another new car (yes, NEW), and I can't even imagine what interest rate they are paying, but I know it's over 14%."
Yikes, Taxman. I can't tell you how often I hear stories about credit repair customers with the same bad financial habits as your friends.
So many people "thought they were told" something that turned out to be false, they dug themselves into a hole, and for some reason, they won't stop digging!
Well, we can't force them to change their ways, but we can do our best to show them the numbers and convince them that better habits (like not buying new cars) mean better credit, and better credit means a better financial life.
And if you're curious about what this means in actual dollars, the current most popular car in America is the Toyota Camry, priced at $25,900. If you put $5,000 down and you're paying a rate of 14% over five years. Do you know what you end up paying for this $25,900 car? At the end of those five years, $36,291.39 with interest, tax, and fees included! And that's not even including all those late penalties.
Now that's a scary story!
This next story comes from Henry, who sent in a creepy one about an unwelcomed houseguest and the PRICE OF EVICTION…
He said, "I was stuck living with a horrible ex-girlfriend for months because I didn't know enough about Evictions or Credit. Long story short, my ex-girlfriend from college moved across the country during the pandemic and asked if she could stay with me for a few weeks until she got settled. I said, "okay," but I didn't clear it with my landlord. The situation was cool for a while, but after months and months of her not paying rent, I told her she needed to start paying rent or move out. I figured that was a normal request, but she got super upset because she couldn't find a job, and she guilted me into letting her stay longer. Eventually, months later, I reached my breaking point and told her she had to leave. But she just laughed at me. She actually laughed and told me she looked it up, and I couldn't kick her out. She lived there long enough that she was now technically my "subtenant." Her name wasn't on the official lease, so the only way to evict her was to evict myself. She told me that would destroy my credit and make it hard for me to find a new place to live. Obviously, I felt awful, but I started learning more about credit and evictions, and I found out I actually could "evict myself" and not hurt my credit, just as long as I wasn't evicted for "non-payment of rent." So I did it. I paid my last month of rent and evicted myself. We were both forced to leave, and I was glad to go. All I had to do was explain to my next landlord why I was evicted. I explained that I had broken the terms of the lease, and I explained the situation, adding I would never do it again. I might not date again, either. But everything has been good since. Not sure what happened to my Ex. But that's a different horror story."
Wow, Henry. I'm glad you found a creative way to get that unwanted guest out of your house, even if you had to leave as well.
But it's a perfect example of how some people will take advantage or scam you until you learn the law and start protecting yourself!
Next, I found a BusinessInsider article that told a shocking tale about a MASSIVE CREDIT SCORE DROP…
I want to include it because the Student Loan Forgiveness application process is now open!
Lisa, a financial expert, said, "How I got into learning about finance and learning how to build my credit is when my credit dropped to the low 500s after just one missed payment on a student loan." She said, "Because my student loan provider listed each loan as 19 individual ones, it reported on my credit as 19 missed payments…My score plummeted, and it took a few years before it disappeared from my credit report, and things balanced out. I learned the hard way to consolidate your loans and pay on time."
Wow, I'm so sorry you went through that, Lisa. But just like me, you used your credit repair horror story to learn as much as possible about the industry, and now you're a financial expert!
During an upcoming episode, I'll dive deeper into my thoughts on Loan consolidation.
Next, we have a sinister post about a customer that got trapped in PAYDAY LOAN HELL…
Todd, who is a financial counselor with a nonprofit agency, told a story that took place about ten years ago. He said he was talking to an adult learners' class about payday loans ("every credit counselor's favorite topic"), and a woman came up to him after class and said she'd taken out three Payday Loans for $500 each. At that time, if you couldn't make the payment every two weeks, you would pay a 15% fee and get another two weeks to make the payment. The extension fees came to $225 every two weeks, and she had been paying them for five years, which came out to $29,000 — for a $1,500 loan! Even worse, she still owed the original $1,500. Meaning, not a single penny of those two-week fees went to pay down the debt."
Wow, Todd. I don't know about you, but I don't understand how this is even legal. It's like death by a thousand fees—it's unarmed robbery.
It makes you wonder what type of creepy company would offer Payday Loans. Well, guess what? B of A offers them. They just call them "Balance Assist" Loans because "Payday Loans" have a negative connotation now.
Did I mention I don't like B of A?
Okay, we go to Marie on Facebook for the last and Scariest Story of the day.
Marie shared a true NIGHTMARE CUSTOMER situation…
She said…"Wow, it has been a day. ONE client has created a total uproar, and I am at a loss. Long story short, she tried to fix her credit independently. She started the process of writing to THE CREDITORS vs. the CB. She contacted me and asked for help because she was lost and had no idea what to do. I sent out appx 19 letters for her in response to creditor responses and starting her dispute process with the bureaus. In addition, I include biweekly coaching in my price, which I did more than provide for her. She calls me 3-4x a week looking for updates, questions my abilities, etc. We both agree it's best NOT to move forward because, clearly, we are not on the same page. 20 days go by, and she's demanding a refund. Telling me, I scammed her. I offered her a partial refund with an invoice of itemized expenses. Months later, a MOMS group I'm in posts about how I'm a scammer and not to trust me, etc. Posting screenshots of my FB business page, my partially done website, and an ad using my information that is NOT my ad. I'm literally getting threatening messages from strange moms I've never even met. They posted negative and false reviews, and they're not letting up. It's so bad I've had to archive my FB group, take down my business page, and block four strangers already. What on earth am I to do? I can genuinely say I did everything I could to help this client."
First, Marie, I'm sorry you had to go through that. When you work at a larger company, Customer Service people shield everyone from that type of negativity and harassment, but when you're a solo entrepreneur, you have to face these sad and angry people yourself.
These interactions can be exhausting and disheartening. To me, nothing you said or did would've mattered. That customer is just an angry person looking for someone to bully.
Others might argue the customer doesn't deserve a refund, and some might even tell you to take legal action against the customer, but I recommend if there's ever any issue with a customer, give a refund and walk away as soon as possible. Remove that source of negative energy from your life and your business as quickly as possible. Time is money. Save your time, save your money. Protect your online reputation and your mental health.
When you're growing a business, you will face all kinds of challenges. But if you start to create a process for each thing that comes up, your business will get stronger and stronger. And if you document those processes, you'll eventually be able to have other people deal with monster clients that sometimes appear.That's why we share scary stories, so you'll get better at noticing potential threats earlier and be safer when you're out there running your business.
I just hope these stories weren't too scary!
I'll end by saying…
If you don’t already have a Credit Repair Cloud account, check it out. It’s the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial
And If you’d like me to hold you by the hand as you launch your own credit repair business, check out our Credit Hero Challenge!
It’s an amazing program where you’ll learn the processes that have made millionaires, and it costs less than you'll spend taking your family to McDonald’s for dinner.
We’ve got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!
Until then, remember, keep the facts on your side…
And keep changing lives!