Thrifty Spending Issue 103

FEATURE ARTICLE:  What to do with your tax refund Expecting a hefty tax refund this year? You may have visions of plasma televisions and Hawaiian vacations. But with the economy locked in recession and the unemployment rate at a 25-year high, there might be more practical ways to spend the extra cash.



MONEY SAVING TIP:  The ExtraBucks Rewards at CVS can be overwhelming when you first sign up, but it is one of those loyalty cards that pays off.



DID YOU KNOW…offers to repair your credit can be a rip off?

Credit repair agencies enjoy soliciting their special industry knowledge and insights, and people often assume these firms can do things that individuals can’t.


SafeIDLock Your Credit

In a matter of minutes, your identity could be stolen and you could face a long road of financial problems. This is actually easy to avoid with SafeIDLock. If you have already experienced identity theft, SafeIDLock will help you restore your identity.

Part of DMCC’s mission is to educate consumers on how to improve their credit and provide a prosperous financial future for themselves and their families.  One of the ways DMCC does this is by reviewing consumer’s credit reports. At times, our clients are surprised to find unknown credit lines on their reports. Some of our clients have had to struggle correcting their credit reports after being victims of identity theft. SafeIDLock helps eliminate all of this.   They will protect your identity by monitoring public and private networks and alert you of any suspicious activity associated with your name.  You will also be given access to monitor your own Experian credit report and view your credit score 24/7.

Be proactive and contact DMCC (866-618-3328) to speak to one of our certified credit counselors. They will discuss with you the plan available through SafeIDLock, so you can avoid becoming a victim of identity theft. It is safe and effective.

Check for a recall before purchasing that car!

An auto recall means that a specific vehicle may not meet safety, operating or emissions standards. Recalls can be issued by the either the manufacturer or the Environmental Protection Agency (EPA), according to the Recalls website, which is provided for consumers by the government. Recalls are covered by the manufacturer at a same-make dealership free of charge.

Purchasing a car, even a used model, is the second largest investment we usually make so it is important to do some research before you purchase a vehicle. If you plan a vehicle purchase go to the National Highway Safety Administration website, (NHTSA)  and do some investigation.  Try and visit the site every few months as recalls happen frequently and could happen during your vehicle ownership.

Before making that purchase contact a DMCC Certified Credit Counselor and consider a budget review. Knowing how much you can afford before you buy will help you make an affordable choice.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Are you in debt trouble?

Signs that you may be in trouble with your debt!

The following are indications you have a debt problem:

1. You do not have any savings.

2. You make minimum payments on your credit cards.

3. You use credit cards for things you used to buy with cash, such as groceries.

4. You use increasing amounts of your total income to pay off debts.

5. You have more than two or three major credit cards.

6. After you pay your credit card bill, you increase your balance by the same amount (or more) the following month.

7. You are at or near your credit limit on your credit cards.

8. You count on the float in order to pay your bills, writing a check hoping that you’ll be able to cover it by the time it clears your bank.

9. You are unsure of the total amount you owe on all your debts.

10. You take out cash advances on your credit card to pay other bills.

11. You have tried to make a purchase with your credit card and been declined.

12. You have been denied credit.

13. You bounce checks.

14. You get calls from collectors.

15. You lie to your spouse or other family member about your spending, hide credit card statements or constantly argue with family members about your finances.

Here are some other warning signs that you might be piling up too much debt:

• You cannot pay off the bill in full each month. Even before you get to the stage where you’re only paying the minimum, there are warning signs. If you rarely see your credit card balance drop to zero, you need to start rethinking your spending/saving plan.

• You are charging because you haven’t got the money. If you are making purchases with your credit card because you can’t afford to pay cash for it, that’s a strong sign you are in financial trouble.

• You are near or at the limit with your credit cards. You have spent yourself into a corner, and the credit you need for everyday life is used up.

• You are suffering physically. Your brain is recognizing that your spending patterns are in conflict with your income and your anxiety level increases.

• You are running up unsecured lines of credit. Many institutions offer lines of credit or overdraft protection on checking or savings accounts. If you are utilizing these services on your accounts month to month, then you have a problem. Because these services usually have a cost associated with them, they can be costly every time they are used.

If you realize that you are in over your head, the sooner you act, the easier it will be to get out from under the burden of debt. Beware of companies that promise to fix your credit. Talk to a Certified Credit Counselor at DMCC today and start with a free budget counseling session  and get control of your finances today!

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Payday Loans Equal Very Costly Cash: Consumers Urged to Consider the Alternatives

Payday Loans Equal Very Costly Cash: Consumers Urged to Consider the Alternatives

“I just need enough cash to tide me over until payday.”


The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans, cash advance loans, check advance loans, post-dated check loans, or deferred deposit loans. The Federal Trade Commission, the nation’s consumer protection agency, says that regardless of their name, these small, short-term, high-rate loans by check cashers, finance companies and others all come at a very high price.

Here’s how they work: A borrower writes a personal check payable to the lender for the amount the person wants to borrow, plus the fee they must pay for borrowing. The company gives the borrower the amount of the check less the fee, and agrees to hold the check until the loan is due, usually the borrower’s next payday. Or, with the borrower’s permission, the company deposits the amount borrowed — less the fee — into the borrower’s checking account electronically. The loan amount is due to be debited the next payday. The fees on these loans can be a percentage of the face value of the check — or they can be based on increments of money borrowed: say, a fee for every $50 or $100 borrowed. The borrower is charged new fees each time the same loan is extended or “rolled over.”

A payday loan — that is, a cash advance secured by a personal check or paid by electronic transfer is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with $15 the fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Alternatives to Payday Loans

Before you decide to take out a payday loan, consider some alternatives.

  1. Consider a small loan from your credit union or a small loan company. Some banks may offer short-term loans for small amounts at competitive rates. A local community-based organization may make small business loans to people. A cash advance on a credit card also may be possible, but it may have a higher interest rate than other sources of funds: find out the terms before you decide. In any case, shop first and compare all available offers.
  2. Shop for the credit offer with the lowest cost. Compare the APR and the finance charge, which includes loan fees, interest and other credit costs. You are looking for the lowest APR. Military personnel have special protections against super-high fees or rates, and all consumers in some states and the District of Columbia have some protections dealing with limits on rates. Even with these protections, payday loans can be expensive, particularly if you roll-over the loan and are responsible for paying additional fees. Other credit offers may come with lower rates and costs.
  3. Contact your creditors or loan servicer as quickly as possible if you are having trouble with your payments, and ask for more time. Many may be willing to work with consumers who they believe are acting in good faith. They may offer an extension on your bills; make sure to find out what the charges would be for that service — a late charge, an additional finance charge, or a higher interest rate.
  4. Contact Debt Management Credit Counseling, (DMCC) if you need help working out a debt repayment plan with creditors or developing a budget.
  5. Make a realistic budget, including your monthly and daily expenditures, and plan, plan, plan. Try to avoid unnecessary purchases: the costs of small, every-day items like a cup of coffee add up. At the same time, try to build some savings: small deposits do help. A savings plan — however modest — can help you avoid borrowing for emergencies. Saving the fee on a $300 payday loan for six months, for example, can help you create a buffer against financial emergencies.


The bottom line on payday loans: Try to find an alternative. If you must use one, try to limit the amount. Borrow only as much as you can afford to pay with your next paycheck — and still have enough to make it to next payday.

Protections for Military Consumers:

Payday loans (and certain other financing) offered to servicemembers and their dependents must include certain protections, under Federal law and a Department of Defense rule. For example, for payday loans offered after October 1, 2007, the military annual percentage rate cannot exceed 36%. Most fees and charges, with few exceptions, are included in the rate. Creditors also may not, for example, require use of a check or access to a bank account for the loan, mandatory arbitration, and unreasonable legal notices. Military consumers also must be given certain disclosures about the loan costs and your rights. Credit agreements that violate the protections are void. Creditors that offer payday loans may ask loan applicants to sign a statement about their military affiliation.

Even with these protections, payday loans can be costly, especially if you roll-over the loan. You instead may be able to obtain financial assistance from military aid societies, such as the Army Emergency Relief, Navy and Marine Corps Relief Society, Air Force Aid Society, or Coast Guard Mutual Aid. You may be able to borrow from families or friends, or get an advance on your paycheck from your employer. If you still need credit, loans from a credit union, bank, or a small loan company may offer you lower rates and costs. They may have special offers for military applicants, and may help you start a savings account. A cash advance on your credit card may be possible, but it could be costly. Find out the terms for any credit before you sign. You may request free legal advice about a credit application from a service legal assistance office, or financial counseling from a consumer credit counselor, including about deferring your payments.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

What is the Real APR on PayDay Loans?

Recently, several members of an online network were having a discussion about a payday loan. The payday loan company would loan someone $100, and they would have to pay $115.00 back two weeks later. What is the interest rate? (No, this isn’t a word problem on a math test!)

The payday loan company said that the interest rate is 15%, since 15% of the loan is being repaid as interest. While accurate from one perspective, this number is very misleading. The interest rate on nearly all loans is determined on an Annual Percentage Rate, or APR. This means that you look at the interest that would be paid on the loan in a year, divide it by the principal balance, and come up with the APR. For example, if you borrow $100 on January 1 and pay $1 per month in interest for 12 months, the loan has a 12% APR, since 12 ÷ 100 = 0.12 = 12%.

This works for larger loans as well. If you pay $500 per month interest on a $100,000 loan, the APR is computed this way:

$500 x 12 months = $6,000.
$6,000 ÷ $100,000 = 0.06 = 6%

So if you’re paying $500 per month interest on a $100,000 loan, the APR is 6%.

Let’s look at that payday loan again…

$15.00 interest for 2 weeks = $390 per year.
$390 ÷ $100 = 3.90 = 390% APR

So that loan that requires you to pay “only” $115 back in two weeks really has a 390% APR!

If you or someone you know has been overwhelmed with payday loan debt, you may be eligible for a payday loan repayment program. Florida Residents are eligible for a  60-day deferment. Call DMCC 866.618.3328 for more information and free assistance. 

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

New Research: Payday loans become gateway to long-term debt

In the latest of a series of research reports, the Center for Responsible Lending (CRL) has found that payday loan customers remain indebted double the time that the Federal Deposit Insurance Corporation recommends.

“Payday Loans Inc.: Short on Credit, Long on Debt” verifies how what begins as usually a two-week, small-dollar loan becomes a deepening pit of debt lasting on average 212 days in the first year of borrowing and growing to 372 days in the succeeding year. Yet, according to FDIC guidance, no Payday borrower should be indebted for more than 90 days in any 12-month period.

The report also shows how the size of these loans grow over time as well. Although the first Payday loan is typically only $279, the average customer will borrow more in principal and reaches $466 over time. The catch is that as the amount borrowed increases, so do the applicable fees and interest that the borrower must also pay.  According to CRL, much of the problem with fully retiring payday debt is due to the industry requirement that borrowers pay the entire loan with the next paycheck. For most borrowers, this specific loan term denies them the ability to financially manage the rest of their lives.  The financial burden of only having two weeks to repay can be insurmountable. For many borrowers, even a $300 loan eats up all remaining funds after the borrower has paid for just their most basic living expenses, because they have such a short time to pay the loan back.

At a time when so many people of modest means are striving to financially piece their lives together, dollars are particularly dear. Quick cash may be available from payday lenders. But, there is nothing quick about getting rid of that debt. Borrowers beware.

If you have Payday Loans that you are struggling to repay, or are caught up in the seemingly never ending cycle of renewing loans, DMCC can help.

Click Here to learn about DMCC’s Pay Day Loan Assistance.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Face Your Mortgage Issues Directly and Realistically

Nobody likes to take a call from the collections department. It doesn’t matter if the call is about a credit card, a utility bill, a bounced check or anything else that may be delinquent. Avoiding the issue may seem like a good strategy to those who really hate conflict, but it is usually the worst thing you can do. This is especially true when it comes to a mortgage.

Your lender does not want your house. Yes, they may be very forward in telling you that foreclosure could happen if you do not pay, but they would much rather have a good loan than face the headache of the foreclosure process, reconditioning a property and finding a way to sell it. In the current economic climate, lenders are more desperate than ever to keep you in your house, but they cannot do it unless you talk to them.

Consider this: Freddie Mac has estimated the cost of a foreclosure to the bank to be around $60,000. Officials at HSBC have estimated that the average loss on a foreclosed home is 20 to 25% of the value of the loan. This means that on a $400,000 home, they could lose $80,000 to $100,000. Doesn’t it make sense that the bank would prefer to cut its losses?

In order to work with you, the lender needs to speak to you. The sooner they can speak to you, the better your chances of working a deal with them. In another article, titled “Mortgage Options to Avoid Losing Your Home”, the specifics of what types of deals you may be able to obtain are spelled out. This article will deal only with what you need to do and what you need to be prepared to provide if you want to avoid foreclosure.

• Find out who actually owns your mortgage and deal with them directly. In most cases, you are making your payments to a company that is merely servicing your loan. That company may not be in a position to make the best deal with you. The actual owner of the mortgage has the most to lose if you reach the point of foreclosure and thus has the most to gain by working something out with you.

• Ask to speak with the “Loss Mitigation” department. Almost every lender has such a department. Those that didn’t in the past have created one because the losses from foreclosure have become so extensive. The collections department has one job: get money from you. The loss mitigation department is there to try to help you either keep your house, or at least make the process of losing it less painful, less expensive and less stressful.

• Don’t wait until they have already begun the foreclosure process. Your best deal will come when the bank has not already spent a lot of money with attorneys. Remember, to work something out, you need to make it easier and less expensive for the lender as well as yourself.

• Be prepared to show need and ability. The loss mitigation department usually has many different options to help you keep your home, but they need to see that you can make some sort of payment and you need to show them that there is a legitimate reason for your delinquency. Too many people are simply taking advantage of bad economic times to try to get a better deal. You will need to be able prove your income and explain your circumstances if you expect to get help.

• Understand that you may need to make sacrifices. You are not going to get a lot of sympathy from your lender if you own a 40 foot boat or you drive almost new luxury cars that are paid in full. You may have to consider liquidating some assets and downsizing to items that fulfill needs and not expensive desires.

• Don’t lose your home in order to salvage credit cards and personal loans. You may have to stop paying unsecured debts altogether or at least put them on a Debt Management Plan or even a Debt Settlement Plan. It might be a good idea to consult with a certified credit counselor at a credit counseling agency to find out about your options with your other debts. A reduction in payments on your other debts could make more of your income available to help save your home.

• Don’t abandon the property or let it deteriorate. Even when there is no way you can keep your home, because of the current difficulties in selling a home, the lender may be willing to offer you some assistance. Some lenders are letting people stay in homes and maintain them for little or even no rent just to keep the value up. Others are offering thousands of dollars in relocation money to people as long as they leave the house in good condition. Be sure you discuss these options with your lender if you are in the worst-case scenario of losing your home. You may find that the lender will make your transition easier or even profitable.

• You don’t have to do it alone. There are HUD approved housing counseling agencies that may be able to help you work something out with your lenders for little or no cost. There are also companies out there that will charge you a fee for their services, but unless the services include a legal challenge to the loan documents, they are unlikely to be able to do more than a HUD approved agency.

If you live in South Florida, DMCC is a HUD Approved Housing Agency that may be able to help you. If you live outside South Florida, you can contact HUD at (800) 569-4287 for a list approved agencies in your local area. For FHA insured loans, if you feel your lender is not being responsive to your requests for help, you can call (800) CALL- FHA.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Beware of Tax Identity Theft

What is tax identity theft?

It’s a fast-growing crime that costs taxpayers billions of dollars a year, and shows no signs of abating. Someone uses a taxpayer’s personal information to commit fraud on tax returns to claim refunds or for other crimes, including:

  • Filing a fraudulent tax return using another person’s Social Security number
  • Claiming someone else’s children as dependents
  • Claiming a tax refund using a deceased taxpayer’s information
  • Earning wages under another person’s Social Security number

How does it work?

Crooks look for discarded tax returns, bank records, credit card receipts, Medicare cards and more, often relying on email or telephone phishing, dumpster diving or stealing from your mailbox. They use that info to file for a tax refund before you do. When you file your return later, IRS records will show the first filing and refund, and you’ll get a notice or letter from the IRS.

What can you to do protect yourself?

Reduce tax time stress. File as early in the season as possible, and mail tax returns directly from the post office. If filing electronically, use a secure network and encrypt.

Stay safe online. Do not respond to emails that appear to be from the IRS, and never click on links! The IRS does not send unsolicited, tax account related emails and never asks for personal and financial information.

Protect your personal information. Never store important account numbers or data in purses or wallets, or on smart phones. Use a shredder for paper documents, and install a locking mailbox.

Monitor your accounts and review financial statements regularly. Sign up for your free annual credit report at

Consider a signing up for credit identity protection service like SafeID Lock which is offered with a substantial discount through Debt Management Credit Counseling. Click on the following link

Think you’re a victim of tax ID theft?

Take these four steps right away:

  • File a report with the local police.
  • Contact your bank and credit card companies. Inform credit bureaus and consider freezing your accounts (a credit freeze restricts access to credit reports, making it unlikely that thieves can open new accounts in your name).
  • Contact the IRS Identity Protection Specialized Unit at 800-908-4490 and complete Form 14039.
  • Get an IP (Identity Protection) PIN from the IRS so they can verify your identity as they work with you on the theft going forward.


DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Facts About Consumer Credit Insurance

What is Credit Insurance?

Credit insurance assures a loan will be repaid in the event of the death, disability or involuntary unemployment of the insured borrower. It can be taken to protect all types of consumer borrowing, including loans to finance or refinance a home. These products may be sold by credit card companies, auto dealers, finance companies, department stores, furniture stores or wherever loans are made and credit extended for the purchase of personal property.

There are five principal types of credit insurance:

1. Credit Life Insurance insures that a borrower’s insured debt will be repaid if the insured borrower dies during the term of the coverage.

2. Credit Accident and Health Insurance, also known as Credit Disability Insurance, pays a limited number of monthly payments on a specific loan or credit card account if the borrower becomes disabled during the term of coverage.

3. Credit Involuntary Unemployment Insurance pays a limited number of monthly payments on a specific loan or credit card account if the borrower becomes involuntarily unemployed during the term of the coverage.

4. Credit Property Insurance pays to repair or replace personal property purchased with the loan or credit proceeds and/or serves as collateral for the credit if the property is lost, damaged or stolen. Unlike the first three credit insurance products, credit property insurance is not directly related to an event affecting a consumer’s ability to pay his/her debt.

5. Credit Card (Fraudulent Use) Insurance simply stated is protection against unauthorized use of your credit card in the event that your card is lost or stolen.

Benefits of Credit Insurance

• Credit insurance is affordable because it is based on group rates. This means that generally all consumers or borrowers who voluntarily select credit insurance pay the same rate in their state.

• The cost of Credit Life Insurance for middle aged and older consumers is generally less than term life insurance.

• Credit insurance is generally offered and written with few, if any, underwriting conditions that apply to other types of insurance.

• Consumers can generally obtain credit insurance, including credit life insurance, without the need to fill out a medical history, take a medical examination, or disclose if they are smokers.

• Federal and state laws require that consumers be told credit insurance is a choice and is not required to obtain a loan. Credit insurance is always optional.

• Consumers can get a “free look” at credit insurance by getting a full refund within a set period that usually ranges from 10-30 days. Consumers can cancel the trial at any time before the set time period and receive a prorated refund of any premiums paid.

• State laws and regulations establish credit insurance rates, which have been adjusted and regulated to protect consumers in a majority of states within the past five years.

• Credit Life and Disability Insurance rates do not rise as an individual ages. There is one rate for everyone, regardless of age or medical condition.

Do You Need This Insurance? Let us look at Credit Disability Insurance and Credit Involuntary Unemployment Insurance. Remember, these insurance plans will pay your credit card bills if you become disabled or you lose your job. These plans may be a good thing if your potential sources of income would not be enough to pay your monthly debts in the event of your disability or unemployment. However, there may be a waiting period before you receive your first benefit payment and the insurance may only pay the MINIMUM card payment each month (up to the policy coverage limit). Consequently, unless you are disabled or out of work for a very long time, the cost of the premiums could easily exceed any monthly benefits.

Likewise, insurance that will pay off card balances in the event of your death make sense only if you have a lot of credit card debt and little or no other life insurance. You might be better off insuring yourself against income loss or death by purchasing regular disability or life insurance instead of credit insurance.

Credit Property Insurance guarantees the purchased item or property value of the loan amount. For example, if you used an item that is collateral for a loan and that item was damaged, then its value as collateral may now be worthless but your obligation for the full loan amount has not changed. That is why the lender may require this insurance in order to guarantee the collateral against the loan.

Some telemarketers are aggressively selling insurance that covers the fraudulent use of your credit card. Do you really need that kind of credit card insurance? Most experts say no. Remember, Federal Law already limits your liability to the first $50 of fraud losses per account, provided you make a reasonable effort to notify the card issuer of any lost or stolen cards within a reasonable period of time. In many cases, the issuer will waive the $50 requirement. If your card issuer insists on the $50 payment, then check with the company that insures your home because your existing homeowner’s policy may cover the loss. If you are considering credit card insurance, ask yourself these questions:

• Why do you want this type of protection?

• What benefits will you gain from it and how much are you willing to pay?

Finally, make sure you are dealing with a legitimate insurance company. If you have doubts about the policy or the company, contact your state government insurance commissioner or office of consumer affairs. Never give your credit card number and information to anyone selling credit card loss protection over the telephone because you may be dealing with a con artist who could make unauthorized charges to your card.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

DMCC and Opa-locka Community Development Corporation Providing Foreclosure Prevention Workshop for South Florida Homeowners

Debt Management Credit Counseling Corp ( and Opa-locka Community Development Corporation ( providing Foreclosure Prevention Workshop for South Florida homeowners at St. Thomas University on February 15, 2014. Attendees will learn their options to prevent foreclosure and be provided assistance from certified housing counselors at no charge.

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Consumers Are Getting Smarter About Credit Scores

These days, many consumers are becoming more conscious about the role their credit scores play in their everyday lives, but at the same time, they may not know exactly what goes into it, and what they can do to improve it.About 42 percent of consumers have checked their credit scores in the past 12 months, and there was a relatively even split on the source of this information, between lenders and the three major credit bureaus, according to a new survey from the Consumer Federation of America. Not surprisingly, when asked to answer questions about how credit scoring works, those who had checked their standing were more likely to respond correctly than those who had not.

Overall, the number of consumers who knew what types of entities check credit scores rose 8 percentage points, while those who knew what types of companies collect the information used to create the scores jumped 7 points, the report said. More also knew that they have more than one score, what constitutes a strong rating, and the ways to increase their score, as well as the importance of making sure their credit reports are accurate.

“In the numerous consumer knowledge surveys we have undertaken over the past several decades, I have never seen such improvement from one year to the next,” said Stephen Brobeck, executive director of the CFA. “However, credit reports and scores are so important to consumers that they should try to improve knowledge that remains deficient in several key areas.”

In all, 97 percent knew that making on-time payments was crucial to maintaining a healthy credit score, while 85 percent understood that keeping balances below one-quarter of their total credit limits was also key, the report said. Another 83 percent said they knew not to open a number of new credit card accounts in a short period of time.

Usually, the only way for consumers to improve their credit score is to make better efforts to pay all their bills and maintain low balances over the course of several months. However, checking their credit report for inaccurate information, and reporting any incorrect data they find to the bureau that issued the document can also help to quickly boost their score.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

How do I obtain my free credit report?

What is a credit report?

If you’ve ever applied for a credit card, a personal loan, or insurance, there’s a file about you. This file is known as your credit report. It is full of information on where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Credit reporting companies such a Experian, Equifax and Transunion sell the information in your report to creditors, insurers, employers, and other businesses with a legitimate need for it.

Why are credit reports important?

Your credit reports are important because lenders, insurers, employers, and others use them to assess how you manage your financial responsibilities.

For example:

– Lenders may use your credit report information to decide whether to provide you a loan and under what terms (for example, the interest rate they will charge you).
– Insurance companies may use the information to decide whether to provide you with insurance and the rates you will pay.
– Employers may use your credit report to decide whether to hire you.
– Telephone and utility companies may use information in your credit report to decide whether to provide services to you.
– Landlords may use the information to determine whether to rent an apartment to you.

What does your credit report say about you?

A credit report is a record of your credit history that includes information about:

– Your identity; Your name, address, full or partial Social Security number, date of birth, and possibly employment information.
– Your existing credit; Information about credit that you have, such as your credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
– Public record; Information about any court judgments against you, any tax liens against your property, or whether you have filed for bankruptcy.
– Inquiries about you; A list of companies or persons who recently requested a copy of your report.

Where do credit bureaus get their information?
Credit bureaus get information from your creditors (i.e.,companies that loan you money) such as credit card issuers and auto lenders. They also get information about you from public records, such as property or court records.

How can I get a free copy of my credit report?

You are entitled to receive ONE FREE credit report every 12 months from each of the three credit reporting agencies by visiting, or by phone,

Your credit scores are not part of your credit reports and are not provided with them unless you pay extra. A nominal fee is charged by the bureaus for each score. The information on your credit reports impact your scores, so it is important to make sure that information is accurate. Your scores are used by lenders to help them assess risk fairly because they are consistent and objective. Consumers benefit from this because no matter who you are as a person, your credit score only reflects the likelihood to repay debt responsibly.

DMCC can help!

DMCC has the ability to simulate changes to your reports.  We will show you what you need to do to improve your score.  

To better assist you reading your report and improving your score, contact one of our certified credit counselors by calling 866-724-3328.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-724-3328 or email

Medical Identity Theft

Could identity thieves be using your personal and health insurance information to get medical treatment, prescription drugs or surgery? Could dishonest people working in a medical setting be using your information to submit false bills to insurance companies? Medical identity theft is a twist on traditional identity theft, which happens when someone steals your personal information. Like traditional identity theft, medical ID theft can affect your finances; but it also can take a toll on your health.

The Ill Effects of Medical Identity Theft

How would you know if your personal, health, or health insurance information has been compromised? According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, you may be a victim of medical identity theft if:

  • you get a bill for medical services you didn’t receive;
  • a debt collector contacts you about medical debt you don’t owe;
  • you order a copy of your credit report and see medical collection notices you don’t recognize;
  • you try to make a legitimate insurance claim and your health plan says you’ve reached your limit on benefits; or
  • you are denied insurance because your medical records show a condition you don’t have.

Medical identity theft may change your medical and health insurance records: Every time a thief uses your identity to get care, a record is created with the imposter’s medical information that could be mistaken for your medical information – say, a different blood type, an inaccurate history of drug or alcohol abuse, test results that aren’t yours, or a diagnosis of an illness, allergy or condition you don’t have. Any of these could lead to improper treatment, which in turn, could lead to injury, illness or worse.

An Ounce of Prevention

While there’s no fool-proof way to avoid medical identity theft, the FTC says you can take a few steps to minimize your risk.

  • Verify a source before sharing information. Don’t give out personal or medical information on the phone or through the mail unless you’ve initiated the contact and you’re sure you know who you’re dealing with. Be wary of offers of “free” health services or products from providers who require you to give them your health plan ID number. Medical identity thieves may pose as employees of insurance companies, doctors’ offices, clinics, pharmacies, and even government agencies to get people to reveal their personal information. Then, they use it to commit fraud, like submitting false claims for Medicare reimbursement.
  • Safeguard your medical and health insurance information. If you keep copies of your medical or health insurance records, make sure they’re secure, whether they’re on paper in a desk drawer or electronic in a file online. Be on guard when you use the Internet, especially to access accounts or records related to your medical care or insurance. If you are asked to share sensitive personal information like your Social Security number, insurance account information or any details of your health or medical conditions on the Internet, ask why it’s needed, how it will be kept safe, and whether it will be shared. Look for website privacy policies and read them: They should specify how site operators maintain the accuracy of the personal information they collect, as well as how they secure it, who has access to it, how they will use the information you provide, and whether they will share it with third parties. If you decide to share your information online, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” is for secure). Remember that email is not secure.
  • Treat your trash carefully. To thwart a medical identity thief who may pick through your trash or recycling bins to capture your personal and medical information, shred your health insurance forms and prescription and physician statements. It’s also a good idea to destroy the labels on your prescription bottles and packages before you throw them out.

Detecting Medical Identity Theft

Paying close attention to your medical, insurance and financial records can help you spot discrepancies and possible fraud.

  • Read the Explanation of Benefits (EOB) statement that your health plan sends you after treatment. Make sure the claims paid match the care you received. Look for the name of the provider, the date of service, and the service provided. If there’s a discrepancy, contact your health plan to report the problem.
  • Order a copy of your credit reports, and review them carefully. Credit reports are full of information about you, including what accounts you have and whether you pay your bills in a timely way. The law requires each of three major nationwide credit reporting companies – Equifax, Experian and TransUnion – to give you a free copy of your credit report each year if you ask for it. Visit or call 1-877-322-8228 to order your free credit reports each year, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can download the form at you have your reports, look for inquiries from companies you didn’t contact, accounts you didn’t open, and debts on your accounts that you can’t explain. Check that your Social Security number, your address(es), name or initials, and your employers are listed correctly. If you find inaccurate or fraudulent information, get it fixed or removed. Visit to learn how.
  • Ask for a copy of your medical records. If you believe you’ve already been a victim of medical identity theft, review your medical and health insurance records regularly. The thief may have used your name to see a doctor, get prescription drugs with your health ID number, file claims with your insurance provider, or done other things that leave a trail in your medical records. Try to review your health records for inaccuracies before you seek additional medical care. The Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule gives you the right to copies of your records that are maintained by health plans and medical providers covered by that law. Health care providers and health plans generally are required to give you your files within 30 days after you ask for them. Unlike credit reports, there is no central source for your medical records. You need to contact each provider you do business with – including doctors, clinics, hospitals, pharmacies, laboratories and health plans – that is relevant to your experience. For example, if a thief got a prescription in your name, you may want the record from the pharmacy that filled the prescription and the health care provider who wrote the prescription. Or if you’ve been using the same hospital for 20 years and you think that the identity theft is recent, you may want to limit your request to records of the last few years or months.It’s likely that you have to complete a form and pay a fee to get a copy of your records. Keep track of your communications with your health plan and providers, including copies of postal and email correspondence, and a log of your phone calls, conversations and activities. Be patient: Health plans and providers, particularly small ones, may not have handled a claim of medical identity theft before, and may not be sure how to respond.In most instances, a provider who denies you access to your records must give you the reason in writing. Some providers may refuse to give you copies of your medical or billing records for fear that they’re violating the identity thief’s HIPAA privacy rights. These providers are mistaken: You have the right to know what’s in your file. If your request is denied, you have the right to appeal. Contact the person identified in the provider’s Notice of Privacy Practices or the patient representative or ombudsman, explain the situation and request your file. If a provider still refuses to give you access to your records within 30 days of your written request, file a complaint with the U.S. Department of Health and Human Services’ Office for Civil Rights, at

You also should get a copy of the accounting of disclosures for your medical record from your health plan and providers. It will help you follow the trail of your information and identify who has incorrect information about you. The law allows you to order one free copy of the accounting from each of your providers every 12 months. The accounting is a record of:

  • the date of the disclosure;
  • the name of the person or entity who received the information;
  • a brief description of the information disclosed;
  • a brief statement of the purpose of the disclosure or a copy of the request for it.

Certain disclosures that occur often or as a matter of routine – like each time a doctor’s office sends treatment information to another health care provider, or sends payment information to an insurer for reimbursement – may not be included in the accounting.

For more information about your rights under HIPAA, visit the U.S. Department of Health and Human Services, Office for Civil Rights at, or the World Privacy Forum at

Bouncing Back from Medical Identity Theft

If you are a victim of medical identity theft, here are several steps to take immediately. Keep detailed records of your conversations and copies of your correspondence.

  1. File a complaint with the Federal Trade Commission online at or by phone at 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261.
  2. File a report with your local police, and send copies of the report to your health plan’s fraud department, your health care provider(s), and the three nationwide credit reporting companies. Information on how to file a police report is at
  3. Exercise your right under HIPAA to correct errors in your medical and billing records. Write to your health plan or provider detailing the information that seems inaccurate. Include copies (keep the originals) of any document that supports your position. In addition to providing your complete name and address, your letter should identify each item in your record that you dispute, state the facts and your reasons for disputing the information, and request that each error be corrected or deleted. You may want to enclose a copy of your medical record with the items in question circled. Send your letter by certified mail, and ask for a “return receipt,” so you can document what the plan or provider received. Keep copies of your dispute letter and enclosures.

Generally, your health plan or medical provider must respond: The creator of the information is obligated to amend the inaccurate or incomplete information. It also should notify other parties, like labs or other health care providers, that may have received incorrect information. If an investigation doesn’t resolve your dispute with your plan or provider, you can ask that a statement of the dispute be included in your record.

Other Steps to Consider

A fraud alert can help prevent an identity thief from opening additional accounts in your name. Contact the toll-free fraud number of any one of the three nationwide credit reporting companies to place a fraud alert on your credit report. Contact only one of the three companies to place an alert. The one you call is required to contact the others that, in turn, place an alert on their versions of your report, too.

  • TransUnion: 1-800-680-7289;; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
  • Equifax: 1-800-525-6285;; P.O. Box 740241, Atlanta, GA 30374-0241
  • Experian: 1-888-EXPERIAN (397-3742);; P.O. Box 9532, Allen, TX 75013

A security freeze, also known as a credit freeze, is a warning sign to businesses or others who may use your credit file. It locks down your credit file and blocks access by potential creditors. In short, it makes it less likely that an identity thief can open new accounts. Most states have laws that allow consumers to place a credit freeze with credit reporting companies. In many of these states, any consumer can freeze their credit file; in others, only identity theft victims can freeze their files.

Placing a credit freeze does not affect your credit score, keep you from getting your free annual credit report, or keep you from buying your credit report or score. It doesn’t prevent you from opening a new account, applying for a job, renting an apartment, or buying insurance, either. In these situations, the business usually needs to review your credit report. You can ask the credit reporting company to lift your credit freeze temporarily, or remove it altogether.

There are two key differences between security freezes and fraud alerts:

  • The credit reporting companies are not required to share a request for a security freeze as they are with a fraud alert. If you want to freeze all your credit files completely, you have to contact each company with your request.
  • The credit reporting companies may charge you a fee to place a freeze or to lift it. The fees and lead times to freeze or “thaw” your credit file vary among states, so it’s wise to check with your state authorities or with a credit reporting company in advance if possible. In many states, security freezes are free for identity theft victims; in others, consumers must pay a fee – typically $10. It’s also important to know that each credit reporting company charges a fee for this. More information is at

If you have a valid police or other investigative report about the theft, you usually can place or lift a freeze for free.

If you believe you are a victim of medical identity theft and are concerned that your identity could be compromised further – say, by credit accounts being opened in your name – you may want to consider a freeze as an additional layer of protection.

For More Information

For information about getting and correcting your medical records:

World Privacy Forum
2033 San Elijo Avenue, #402
Cardiff by the Sea, CA 92007

Center on Medical Record Rights and Privacy
Health Policy Institute
Georgetown University
Box 57144
Washington DC 20057-1485

If you believe that a health plan or provider violated your rights under HIPAA, you may want to file a complaint with:

U.S. Department of Health and Human Services
Office for Civil Rights
200 Independence Avenue, SW
Washington, DC 20201

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

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DMCC Receives 2013 Business Partner of the Year Award From Palm Beach County School District

Debt Management Credit Counseling Corp (, a nonprofit credit counseling organization (DMCC), receives Award for Business Partner of the Year from the School District of Palm Beach County for 2013. DMCC has been teaching financial literacy to students at the Adult Education Center in West Palm Beach for over 10 years.

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10 Characteristics of Debt-Free People

Ever wonder how someone with limited income manage to live comfortably while someone with a more desirable income manages to be under water? While some people may believe that inadequate income contributes to their mismanagement of their finances, those who desire to get out of debt and remain debt free believe in a different approach Its not how much you make, its how you spend it.  More often than not, it seems people of modest means who exhibit an ability to properly manage their finances have a combination of multiple characteristics.

1. They’re Detail-Oriented

People who are in a good financial position always pay close attention to their personal finances. They know how much they earn and they keep track of how much they spend and where every penny goes. Because they’ve got a good handle on the state of their personal finances, they are less likely to buy something they can’t afford.

2. They Realize Debt Is A Mortgage on Their Future

I remember somebody once telling me that debt is a form of indentured servitude where we end up sacrificing our future earnings in exchange for instant gratification. Financially savvy people understand that, in most cases, such a trade almost always ends up being a Faustian bargain.

3. They’re Pragmatic

More often than not, folks who are debt-free are also practical people. Because they are practical, they understand the meaning of value. For example, a car is often looked at merely as means to get from point A to point B, so why buy a Lexus when a Corolla will do? In the same vein, why pay double for designer jeans that will last just as long as the no-name alternatives? Such a philosophy even stretches to the grocery store, where name-brand items often give way to their store-brand counterparts.

4. They’re Self-Reliant

Most people who work hard to maintain a life of financial freedom take pride in being self-reliant. To that aim, they make sure they always live within their means, and save as much money as they can for a rainy day or when times get lean. (They’re also quick to give when others fall on hard times.)

5. They Aren’t Addicted to Shopping

We all know there are people out there who get a high on spending money, whether they have it or not. While not physically destructive like a drug or alcohol addiction, an uncontrolled shopping habit will make it virtually impossible to remain debt free.

6. They’re Patient

People who are debt-free didn’t get there because they were impulsive shoppers, or always looking for instant gratification. If the money for something wasn’t in the budget, then they saved their money and waited.

7. They’re Self-Confident

Because they refuse to let their self-worth be defined by their possessions, the financially free never feel any pressure to spend money in order to try and keep up with the Joneses. Those who are debt-free understand that their status in life is more accurately conveyed by self-confidence, rather than dubiously deceptive displays of wealth.

8. They Realize Credit Cards Are a Double-Edged Sword

People who are in control of their personal finances aren’t afraid of credit cards. In fact, they embrace them. And while the financially savvy understand the incredible benefits that credit cards provide their owners, they also know that if they fail to pay them off in full at the end of each month, they will pay a heavy price. This knowledge fosters a healthy respect that keeps their credit cards from being abused.

9. They Believe In Personal Responsibility

Financially responsible people refuse to make excuses. If they lose their job, they know it’s their responsibility to have a rainy day fund in place – and if they don’t they’ve got no one to blame but themselves. Short of an unforeseen catastrophic medical issue or natural disaster, they also understand that when it comes to living within one’s means, they are in complete control of their own destiny.

10. They’re Not Materialistic

The pursuit of expensive toys and other possessions can certainly make life more luxurious. But at what cost? I know it’s a cliche, but most people who are debt-free understand better than most that money cannot buy lasting happiness. As such, they often tend to live simpler lives that focus on the joys of family, rather than the accumulation of material possessions.

How many of them apply to you?

REFERENCE : 10 Key Characteristics of Debt Free People

Avoid Impulse Buying

Impulse buying makes you spend money on items you may not really need or want. It is buying something that isn’t within budget or a part of a monthly spending plan.  It’s a purchase that isn’t necessary, and one of the largest causes of consumer debt each year. To avoid impulse buying you need to ask yourself if you really need the item or just want it. When the temptation for a big impulse buy strikes, take a step back to evaluate the situation. There are a number of ways to stop impulse buying if it’s causing problems for you.

Have a budget made up and don’t spend over this amount.

Have a list of items that you intend to buy and stick to it.

Take 24 hours, a few days, or even a week, to determine if it’s truly a need.

Compare prices between sellers. You may find that someone is selling an item a lower price.

Impulse buying can rob you of your financial security if it goes unchecked. All of those “little” purchases can add up.  Be wise enough to thoroughly think over the necessity of each purchase you make. Though lower price or free shipping may seem attractive and beneficial, make sure to spend time comparing the price to that of other sellers, and thinking of whether that purchase is really what your life lacks. It is best to avoid impulsing buying as much as you can.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Budget + Investment = Reward

If you find yourself using your savings account to pay bills or prevent your checks from bouncing, then its time to reevaluate your spending habits. This may seem like a difficult task at first, but after a short period of time, saving money should become a breeze. To better reap the rewards of a savings account, update your budget on a regular basis and become familiar with your banking options.

It seems tedious and time consuming to keep track of every dollar you make, but starting now is better then walking a tight financial rope. Once you have figured out how much you can safely deposit into a savings account, then your next step is to make the most out of what is being offered by financial institutions. Interest bearing savings accounts are offered with most major banks, but how would you know if there are better rates being offered elsewhere?

The easiest method is researching and comparing rates through the Internet. If you are computer savvy, jump online and check out local banks as well as This one stop shop offers comparisons between many of the local, national, and virtual banking institutions and even includes current promotional information. Linking an existing bank account with a savings account offered by another bank can be tricky, but many of the virtual banks allow you to make deposits and withdrawals as often as you need to. You have completecontrol of your money. Virtual banking is no different then banking online with the traditional bank; both financial institutions offer all of the same benefits. When looking at banks, be sure to compare virtual banks with the standard “brick and mortar” banks. Virtual banks do not have the costs of maintaining physical locations so they can provide their customers slightly higher returns on their investments.

As with budgeting, when you put your money into a savings account, it is a good idea to review your financial goals. What do you have planned for the next 5, 10, or 15 years? When you figure out an amount you wish to save each pay period and a specific goal to achieve, you can safely make timely deposits into and watch your money as it works for you. This can be done through a regular savings account, by purchasing a certificate of deposit or committing to a retirement fund.Before you open a bank account, take the extra time you need to get all of your information. First, make sure that you know exactly what fees they charge and how they assess them. No matter what type of account you open, you want to make sure it is free of monthly service fees and, unless you have enough saved elsewhere, that they do not require a minimum balance. If an emergency comes up that requires you to withdraw an amount that would lower the balance below what they require, being penalized will do you little good. Also be certain to review the banks history, credentials and make verify that it is FDIC insured. Lastly, pay attention to the customer service you and others have received. This will give you an idea of what type of service you can expect to receive in the future. If you are not content, take your money and business to another bank.

Once your strategy for savings is put in motion, the most important thing to do is keep yourself motivated. Dipping into a savings account is tempting and, all things considered, cheaper then using a credit card. If you decide to take out money from your savings account, be sure you set a limit on how much you are going to spend and plan for how you can put additional money into the savings account to cover the withdrawal. It is all too easy to use the money you work so hard for on items you may not need. If you notice the amount in your savings account dropping and havent set up a good plan to put the money back in, then get creative. Bake cookies, paint a picture, write a poem; these are not only great gifts for the holidays are very rewarding activities too.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email