FTC Returns Money to Consumers in Mortgage Relief Scam

The Federal Trade Commission is mailing 2,653 checks totaling more than $467,000 to consumers who lost money to a scheme that charged large up-front fees for mortgage relief services that were not provided.

The FTC won a court action against Jackson, Crowder & Associates and Crowder Law Group, in which the FTC alleged that the defendants falsely promised to modify consumers’ mortgages and substantially reduce their monthly payments, exaggerated the role an attorney would play, and pretended to be affiliated with a government agency.

Consumers who receive the checks from the FTC’s refund administrator for this matter, Gilardi & Co. LLC, should deposit or cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. The amount of the check will vary based upon each consumer’s loss.

Consumers who receive checks and have questions can contact Gilardi & Co. at 1-888-561-9023. More information about the FTC’s refund program is available on the FTC’s website.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.

Tackling Debt Can Reduce Stress and Boost Your Health

Getting help to tackle problem debt will not only benefit your finances, studies show it can also reduce stress levels and result in improved physical and mental health.

Ireland’s household debt burden is currently the third highest in Europe, standing at €157 billion –  equivalent to €34,089 owed by every person in the country, according to Central Bank of Ireland data.  Behind these stark numbers lies extreme stress in a great many households.

In the United States a Consumer Financial Stress Index charts stress against the economic cycle. Here, few would need a special index to know that debt stress is widely prevalent despite the Irish economic recovery.

One of the most unfair aspects of problem debt is that it is not just your finances that are affected, it affects your quality of life and often impacts on personal relationships too.  We frequently see clients who have been living with acute stress caused by unmanageable debt for years, causing them to struggle with insomnia, anxiety, depression, headaches and sometimes alcohol problems which seriously affect their personal and working lives.

Researchers first made a direct link between stress and immune system deficiencies in the 1930s and since then numerous studies have shown that prolonged stress is harmful and linked to a range of health problems.  One study showed that people in debt have diastolic blood pressure rates 1.3% above the mean which may not sound too bad but a mere 2% increase is associated with higher risk of hypertension and stroke.

Bottling up problems can exacerbate stress – obtaining expert help almost always results in an immediate reduction in the intolerable levels of stress people have been living under. The trigger for seeking help can be persistent calls from debt collection agencies, a final payment demand or threat of repossession – the important thing is to seek help, regain control and begin to turn your life around. Right from the start of the process your PIP or Money Adviser can take away the major stress of having to deal with Creditors directly.

A study by mental health charity Mind found that 79% of people with problem debt are so stressed out that they avoid opening bills or making budgets to help them manage money.  A PIP or Money Adviser can make those tasks easier and will not be fazed if you arrive with a plastic bag full of unopened bills.

When money is tight, people cut back on important things like life cover and that can be a major source of stress as they worry about what would happen if something happens to them and their families are left to cope with their debts. A PIP may be able to help arrange life cover which is an allowable living expense if you enter a formal insolvency solution.

It is better to act sooner rather than later on life cover so you do not find yourself in a Catch 22 situation where you need life cover because you are worried about your health and your family but life cover becomes more expensive and difficult to secure as you get more stressed and it impacts on your health.

If you feel trapped in a vicious circle of stress and debt, the positive message is that there is a way to break out of it: by tackling your debt, you will also be able to tackle your stress and look forward to healthier and happier times as well as a new and more stable financial future.

This article by Peter Dean first appeared on Carrington Dean and was distributed by the Personal Finance Syndication Network.

Shattering the Millennial American Dream: Mom & Dad Don’t Want to Pay for College

As the cost of attending college continues to dramatically increase, parents of college-bound students are rethinking their role in helping their children earn degrees. Sixteen percent of parents with children ages 16 to 18 who plan to attend college said they will not be helping their kids pay for school, up from 12% in 2013, according to the latest edition of an annual survey from Discover Student Loans. That 16% figure is the same as it was in 2014.

Parents who do plan to pay for college may not be paying as much as parents used to: 24% said they couldn’t afford to pay anything (compared to 21% in 2014 and 2013), but the most common answer (31%) is that the parent plans to cover up to 25% of education expenses. Only 9% said they can pay for all of it (down from 11% in 2014 and 2013), 8% said they could pay for three-quarters of it (down from 11% last year and 12% the year before), and 18% think they can cover half the cost (19% in 2014 and 18% in 2013 said the same).

The trend continues: This year, a greater share of parents said their children will borrow student loans to pay for school (54%, up 2 percentage points from last year and 4 points from 2013), though 20% aren’t sure if their kids will need to take out loans, which is a lot of uncertainty for students so close to the traditional enrollment age.

Based on the responses to the survey, money is a huge concern for these parents: 58% said they are very worried about that student loan debt will affect their children’s ability to buy a home, a car or another large purchase, up slightly from 55% in 2014. It seems they want their kids to get a grip on their future finances, as well: 47% said earning potential after graduation is more important to their children’s education than their major (up 7 percentage points from 2014), and 44% said they would be more likely to fund education expenses if their children majored in fields with a higher likelihood of getting a job — just 33% of parents said that last year.

So, college students of the near future, take note: You might want to talk to your parents about how to approach paying for college, because it looks like you’re going to be responsible for some of it, if not bearing the vast majority or all of the expense. Using student loans to finance your education isn’t an inherently bad choice, but if you’re not careful about anticipating your expenses and future earnings, you could end up in a very difficult financial situation upon graduation. Student loans must be repaid — they’re rarely discharged in bankruptcy — and falling behind or defaulting on the debt will seriously damage your credit standing, which you need to buy or rent a home, get a car or even access utilities, without having to pay a hefty deposit. If you’re not sure where you stand credit-wise, there are many ways to get your credit scores for free, including on Credit.com.

This is the fourth edition of the Discover Student Loans survey, which includes responses from a nationally representative sample of 1,000 adults with college-bound 16- to 18-year-olds. The margin of error is plus or minus 3 percentage points.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

The New Grad’s Guide to Student Loan Debt

Finishing college is surely cause to celebrate — but it is also time for some hard realities to hit. Once you send in your last college assignment and get the perfect champagne-popping picture, your mind may start wandering to the future. No matter your post-grad plans, you will likely have to start working on paying back those pesky student loans. You may think you figured all this out freshman year, but check out the guide below to help transition from student to graduate (and debtor).

When to Start

Many federal loans do not require payments until after you graduate and even feature a six-month grace period to help you get financially settled and choose your repayment plan. Interest will likely accrue during this time (so it’s good to remember that!), but at least you will not have to make payments if you are not prepared. You can work with your lender to create a schedule which will state when your first payment is due so it’s important to pay attention and be ready when it comes.

How Much to Pay

The amount you owe depends on the type of loan you received, how much money you borrowed, the interest rate on your loan and the repayment plan that best suits your needs and situation. If the number your lender quotes you seems too high for your budget to handle, there are student loan repayment options, but do your research and make sure you’re OK with the potential downsides. For example, pausing your payments can raise your total student loan bill significantly over the life of the loan.

While your monthly bill will tell you the minimum you must pay each month, a calculator can show you how paying more over a shorter time period can save you in interest. Just be sure that pre-payments don’t come with a penalty fee.

How to Pay

You can submit payments to your lender several ways, ranging from mailed checks to online payments. If your servicer offers the option of withdrawing payments automatically from your bank account each month, you may want to consider this option. Automatic payments can ensure you don’t miss a deadline and help you avoid late penalties.

How to Change Your Repayment Plan

If you are struggling to make payments or want to put down a lump sum on your student loan debt, it’s a good idea to contact your loan servicer. Do not miss payments without reaching out as consequences include default, lowered credit score, withheld tax refunds and negative effects on your ability to borrow in the future. You should be able to switch plans (or simply switch the date your payment is due) to suit your needs and goals. Just keep in mind this might come with changes in interest and the length of your repayment schedule.

Make a Budget & Come to Peace With Debt

When you are out of school and part of the labor force, it’s a good idea to go over your monthly expenses and create a comprehensive budget. This will help you find areas where you need to cut back and work out how you will pay loans, save and spend. Student loans can also build good credit and help you get a car loan, credit card or mortgage down the road if you make on-time payments. (You can see how your loans are affecting your credit scores for free on Credit.com.) Generally the more positively you think about the situation, the more constructively you can tackle your debt.

Entering the workforce with debt already on your plate can be stressful, but you can pay back your student loans. Set a plausible plan and get to work.

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This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.

How to Get a Credit Card With Bad Credit

It’s truly a Catch 22: you need a credit card to rebuild your credit, but how do you get a credit card with bad credit? Millions of people across the country have found themselves in this dilemma after the recession, so you are definitely not alone.

The good news is that there are lenders out there who want your business. Borrowers with severely damaged credit ratings aren’t out of options. In fact, credit card approvals for what’s known in the credit industry as “subprime” borrowers are much more common than they were a few years ago. You just have to know what to look for when shopping around.

Credit Cards for Bad Credit: You Still Have Options

With bad credit, you’ll have fewer options than if your credit scores are great, but that doesn’t mean you shouldn’t shop around. Some credit cards can carry high fees or interest rates, and you’ll want to find the best possible card for your situation.

The first thing you’ll want to do is to check your credit reports and your credit score. You may have some idea of how “bad” your credit is, but you really won’t know until you check it. You can check your credit scores for free on Credit.com to see where you stand. You’ll see what factors are affecting your scores and get strategies for getting back on track. It’s also a good idea to check your credit reports with all three major credit reporting agencies (you can get free annual credit reports) to understand what’s being reported and to make sure the information is accurate.

What’s a bad credit score? It’s impossible to say exactly since there are many different credit scores available to lenders, and every lender decides for itself what credit scores are acceptable. Here’s a rough idea of what you may qualify for:

My Credit Score Is 500 (or Below)

If you have a credit score below 500, qualifying for a traditional card will be extremely difficult, if not impossible. Most lenders view scores below 500 as a very high credit risk, and are therefore unlikely to approve a credit line. You may wish to consider a secured credit card as an alternative. With a secured credit card a security deposit is required as collateral, typically equal to the credit limit on the card. The security deposit offsets the risk for the lender because it serves as a guarantee in the unlikely event that you default on the card. Like traditional credit cards, secured credit cards come in many shapes and sizes and it’s important to shop around before settling on one. Not all lenders offer secured cards so be sure to do your research and review the features each card offers. In addition, not all secured cards report your payment history to the three credit bureaus. If you’re trying to re-establish your credit, choose a card that reports to all three so that your hard work in managing the account properly is reflected in your credit scores.

My Credit Score Is 550

If your credit score falls in the 550 range, you may still have difficulty securing a traditional credit card. While it’s higher than those in the lower 500s, a 550 is still quite low when it comes to credit scores and is considered a high risk by lenders. As with those in the lower 500s, a secured credit card may be a better option initially.

My Credit Score Is 600

Credit scores in the 500s will likely force you to obtain a secured credit card, but once you break into the 600s, you may qualify for a traditional unsecured credit card with some lenders. However, you may still face some obstacles in qualifying for a regular credit card because most lenders will still view you as a high credit risk. As a result, the cards you qualify for will most likely come with high interest rates and fees. Scores in the low 600s have more options than those in the 500s but they’re still considered high credit risks to potential lenders.

My Credit Score Is 650

If your credit scores fall in the 650s, you should have little trouble qualifying for a traditional credit card. It’s important to note that even though scores in the 650 range have an easier time qualifying for traditional credit offers, it still falls within the poor credit range known as “subprime” and is considered high risk by lenders. This means you can likely expect high interest rates and possible fees until you demonstrate a positive payment history and your credit improves. Over time, as your credit improves and you break into the 700s, you’ll be able to take advantage of all the benefits that having great credit affords: the best interest rates and terms lenders have to offer.

You can see from this why it’s so important to know your credit score before you apply for a card. You don’t want to to waste time applying for a card you can’t get, and there can be a big difference in terms of cards available to someone with bad credit versus someone with fair credit, for example.

Moving Forward

Once you get one of these cards, you’ll want to keep your balances low, and pay your bills on time every single month. Two of the most important factors in your credit scores are your payment history and your “utilization ratio” — which compares your balance to your available credit. Make sure these two factors are as strong as possible and you should, over time, see a significant positive impact on your scores.

If you’ve opted for a secured credit card, you may want to try to apply for an unsecured card with better perks and fewer fees after a year or so of use. However, if you do that, you may want to keep this first card open for a while longer. Unless you need to get your deposit back right away (or if it carries a high annual fee), you can continue to use it from time to time for things you’d buy anyway, and pay the bill in full. By doing that, it can continue to help you rebuild credit.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.

Americans Spend $2,600 a Year on Their Commutes

Take your annual take-home pay and subtract $2,600 from it — that’s how much you’re really making, after you factor in how much it costs you to get to and from your job all year. The average American travels 45 minutes commuting to and from work and spends about $10 to do so every day, according to the Citi ThankYou Premier Commuter Index.

The index is based on data collected by Wakefield Research from a nationally representative sample of 3,500 consumers between the ages of 35 to 54 with a margin of error of plus or minus 3.1 percentage points, plus 500 respondents from New York, Los Angeles, San Francisco, Chicago and Miami, with a margin of error of plus or minus 4.4 percentage points. The survey asked Americans, not all of whom are full-time employees, about their commutes, which the survey defined as “your trip from work, school or daily activities.” The survey took place online from May 5 through May 12.

Most people drive to work (77%), so fuel is unsurprisingly the most common commuter cost — 79% of people who incur out-of-pocket expenses for their commute said most of their commuting budget goes toward buying gas, while 14% said they spend the most on public transportation, 3% spent the most on tolls and 2% spent the most on taxis or car services.

As far as commutes in big cities go (at least, the ones included in this survey), L.A. commuters spend the most per day ($16 on average), which makes sense, because it’s a car-dominated city, and fuel is a top cost-driver. New Yorkers spend the most time commuting, with an average round-trip commute taking an hour and 13 minutes — 44% of respondents said their daily commute takes longer than an hour. Miami workers have the shortest commute time of the cities (49 minutes) and Chicago and San Francisco were cheapest ($11 a day). That just includes the people who pay anything to commute — nationwide, 17% of people don’t have daily commute expenses, though it’s unclear how that breaks down among people who work from home, walk, bike or have some form of free transportation.

The responses from the five major cities came from commuters within designated market areas (as The Nielsen Co. outlines media markets), which may include suburbs of those areas.

The logistics involved in earning a paycheck are costly — you can do a lot with an extra $2,600 a year — and if you’re putting those expenses on a credit card without paying your statement balances in full, you’re spending even more on travel, not to mention the damage you could be doing to your credit. Carrying high credit card balances is one of the worst things you can do to your credit score, so it’s important to keep track of your accounts, check your credit scores (you can get two for free on Credit.com) and make adjustments to your habits as you see fit.

There are plenty of ways to save money on a commute, too. If taking public transportation is an option and would help you save money, consider doing so. Many public transit systems have options like a weekly or monthly pass that will allow regular commuters to spend less than if they regularly bought single-trip fare, and if public transportation isn’t an option, you could consider carpooling. Additionally, many large cities have adopted bike-share programs with annual passes that cost less than a typical monthly commuting budget, or you could try riding to work on your own bicycle. Every option has its pros and cons, but it may be worth the time and money to determine your most budget-friendly option.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

Why Auto Loans From Car Dealers Are So Hard to Regulate

When we think about borrowing money, the first thing that comes to mind is how much: How much we need, how much it’ll cost, how much we’ll have to pay each month and how much time it’ll take to get out of debt.

Whether the money’s for a house, a car, college or for an unpaid credit card balance, these four financial variables—principal, interest rate, payment amount and term—are the fundamental building blocks for loans that are designed to be fully paid off by the time the last check is cashed. Typically, three of these four variables are used to calculate the fourth.

For example, suppose a borrower is approved for a $20,000 car loan. Also suppose that the lender wants that to be repaid in equal monthly installments over a period of four years, for which it charges a 5% annual rate of interest. The monthly payment amount calculates at just under $461 (lenders often use a present value calculator for this purpose).

Although the math is cut-and-dried, there is a fair amount of interplay among the four variables. For example, an increase in the interest rate will bump up the monthly payment amount, all other things held constant. But if the payment were to remain the same, that increased rate would either force a decrease in the loan amount (more interest charged on less dollars loaned) or cause the repayment duration to lengthen, provided, of course, the lender agrees to that.

The reciprocal relationship that exists among these four loan variables goes to the heart of a problem that Sen. Elizabeth Warren (D-Mass.) finds troubling.

The Issue… & How It Gets Complicated

The senator is worried about auto loans that are originated at car dealerships and the instances where the pricing for these are discriminatory against women and minorities, and those who lack the financial sophistication to know that they’re being unfairly treated. She wants these so-called indirect loans (indirect, because dealerships initiate the loans on behalf of the lenders with which they work) to be subject to the same oversight that governs consumer loans that are originated by regulated entities.

The stumbling block is the Dodd-Frank financial reform legislation that was signed into law soon after the economic collapse. Although it authorized the creation of the Consumer Financial Protection Bureau to safeguard consumers against unfair treatment in finance, the auto industry successfully lobbied for a carve-out of dealer-originated lending, even though the same loans often end up at institutions the bureau oversees.

The CFPB doesn’t have a lot of support in today’s Congress. It doesn’t have a lot of friends within the financial services industry, either. Certainly, not after the multimillion-dollar fines the agency has levied and the added regulatory constraints it has imposed. It’s also a safe bet the bureau has even fewer allies within the auto industry as it seeks authority over nonbank auto lenders, which are also exempt, and, potentially, the type of lending that Sen. Warren is challenging.

Consequently, it’s unlikely that the votes will be there to amend the law so all this falls under the bureau’s purview, as it should. But even if that were to come to pass, how would the CFPB prevent abuse in transactions where a single party controls all the financial variables—in this case, the price of the car and the terms of the financing?

You see, auto dealers don’t have to charge certain customers higher interest rates than others. All they need do is discount the cars a little less.

Go back to the original example. Suppose a customer agrees to pay that $461 per month for his or her new car. Is it a $20,000 car that’s being financed at a 5% rate of interest, or a $19,234 car that’s being financed at 7%? Both scenarios yield the same monthly payment.

Moreover, should the $766 price differential be disclosed? If so, isn’t that tantamount to a roundabout way of controlling sales prices, too? If authorized, would the CFPB’s examiners be directed to audit loan documents and price-check sales agreements, too?

Let’s get real.

As important as it is for the CFPB to gain regulatory control over these last protected pockets of consumer finance, it’ll be hard to protect consumers who choose to finance their auto purchases this way. More likely, the misconduct the bureau is attempting to safeguard against will end up being dealt with on an exception basis — when consumers complain they’ve been unfairly treated. The question is: How will they know?

Unfortunately, not without some effort.

Cars and loans have something in common: They’re both commodities. So it’ll be up to consumers to shop for prices and interest rates online or even face-to-face. The key is to insist on separating the two transactions — buying the car and financing the purchase. It’s the only way to test the relative values of the individual economics. And don’t forget to assess the financing offers on an Annual Percentage Rate basis. APRs mathematically combine interest rates and fees into a single metric that’s easy to compare.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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This article originally appeared on Credit.com.

This article by Mitchell D. Weiss was distributed by the Personal Finance Syndication Network.

A Bad Habit From the Real Estate Bubble Resurfaces

During the heyday of the housing bubble, mortgage sellers made a killing via kickbacks. They often got bonuses for steering borrowers toward more expensive mortgages.

Financial reform, including a strict rule that took effect in 2011 from the Federal Reserve known as the “Compensation Rule,” banned the practice of giving mortgage brokers or loan officers financial incentives for pushing higher-rate loans on consumers. But some mortgage sellers are reportedly still engaging in this practice.

The latest examples come from two lawsuits recently filed by the Consumer Financial Protection Bureau.

In the first, California-based RPM Mortgage – which at one time operated in 18 states — was accused of disguising higher-rate loan bonuses via an employee expense account.

“RPM deposited profits from an officer’s closed loans – profits that were a direct product of the loans’ interest rates – into the loan officer’s employee-expense account, and then used it to pay her bonuses and increased commissions,” the CFPB alleged.

The expense account structure was put into place in 2011 as a direct reaction to the Compensation Rule, which outlawed RPM’s old bonus structure, the CFPB said. More than 500 bonuses were paid out from the expense account, the CFPB says.

To settle the allegations without admitting any wrongdoing, RPM has agreed to repay consumers $18 million and pay $2 million in penalties.

RPM Mortgage did not immediately respond to a request for comment.

In the second case, California-based Guarantee Mortgage Corp. was accused of funneling additional compensation to branch managers and loan originators through third-party marketing service firms.

“The owners of the marketing-services entities … drew the monthly fees as additional compensation. Marketing-services-entity owners included Producing Branch Managers as well as, in some instances, one or more other Loan Originators within the branch,” the complaint alleges. “Owners of marketing services entities received compensation based on the terms of loans they had originated.”

Guarantee, which is no longer operating, was ordered to pay a civil penalty of $228,000, according to the CFPB.

Giving bonuses to sales staff who get more money out of consumers is hardly a new practice. In fact, even the CFPB concedes that in a perfect world, such payments would be regulated by market forces.

“In a perfectly competitive and transparent market, competition would ensure that this incentive would be countered by the need to compete with other loan originators to offer attractive loan terms to consumers,” the agency says in its Loan Origination rule.

But the mortgage market is rarely transparent, particularly when consumers obtain home loans only a few times in their lives. In their most notorious form, financial incentives for loan officers and brokers can be particularly confusing or unclear to consumers. Before financial reform, mortgage brokers were allowed to “double-dip” — receiving payment from consumers in the form of closing costs as well as from banks in the form of “yield-spread premiums” earned by steering consumers into higher-cost loans. That practice is now banned.

However, the recent lawsuits show that it’s still important for consumers to protect themselves when obtaining a mortgage. The best way to do that is to shop around. Always get at least three bids — for now, Good Faith Estimates — from a mixture of lenders and brokers. (New forms simply called “Loan Estimates” will take effect Aug. 1.) An apples-to-apples comparison of bottom-line costs is the best way to make sure there aren’t hidden costs in your mortgage. Maybe the mortgage market can never be perfectly transparent – but vigilantly shopping around can help make the process more so for a consumer.

And before you shop around, make sure you know where you stand — how much house you can afford, what your down payment will be and where your credit score lies. (You can check your credit scores for free on Credit.com.)

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This article originally appeared on Credit.com.

This article by Bob Sullivan was distributed by the Personal Finance Syndication Network.

Help! I Can’t Get a Loan Because I’m ‘Dead’

There are countless ways your credit report can get messed up, all of which can seem pretty annoying to fix. Perhaps one of the most unsettling problems you might find with your credit report is if it says you’re dead, when you’re most certainly alive. It’s not unheard of for consumers to apply for credit and be rejected because their reports incorrectly list them as deceased. But just like all credit reporting errors, it can be disputed and fixed. Unfortunately, it’s not always a simple process.

Why Your Credit Report Says You’re Dead When You’re Not

There are generally three reasons your credit report might incorrectly say you’re dead, said Robert Brennan, a consumer protection lawyer in Southern California. You’re probably dealing with a mixed file, identity theft or a simple mistake, and your course of action will vary slightly depending on the cause of the problem. Either way, you’re going to need to dispute the error with the credit bureaus.

How to Confirm You’re Not Dead

Obviously, having a credit report that incorrectly marks its subject as deceased can be really problematic for the consumer. Not only is a credit report one of the main documents consulted during lending decisions, it’s also something that may be reviewed by employers, insurance companies, landlords and other service providers, as they decide whether or not to work with you. As a result, you want to fix any credit report errors as soon as you find them. That’s why it’s a good idea to check your credit reports and credit scores as frequently as possible — you can get a free credit report summary every 30 days on Credit.com.

Once you realize your credit report says you’re deceased, talk to the credit reporting agencies. The dispute process for each of the three major credit bureaus (Equifax, Experian and TransUnion) is outlined on their websites. Keep in mind that the bureaus do not share information, so you need to check each report for accuracy and dispute issues separately. Brennan said to dispute the error in writing and send it through Certified Mail.

“Provide them with current identification (driver’s license, recent tax return, recent utility bill) and tell them to correct the status to ‘living,’” Brennan said, via email. “If the bureau fails or refuses, then the consumer has rights under the Fair Credit Reporting Act which would include his/her damages plus his or her attorney’s fees.”

What to Do If the Problem Persists

If the error is a result of identity theft, you’ll have more to do than file a dispute with the credit reporting agencies. Victims of identity theft should file police reports, check if fraudulent accounts were opened in their names (and terminate them), put fraud alerts on their credit reports, report the incident to the Federal Trade Commission and contact the IRS for an identity theft PIN to avoid problems during tax season.

It’s important to keep meticulous records throughout the process, because even if you resolve the issue, it could come up again, and you’ll want to be able to prove it’s an error — that will be a lot easier if you don’t have to start from scratch.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

Inequality & Student Loan Debt: 5 Troubling Stats

The rising cost of attending college has had a serious impact on the finances of most students and their families, but the burden has been distributed unequally. Various studies point to the negative, long-term effects of taking on education debt, and considering debt levels vary greatly by race and socioeconomic status, there’s concern over how trying to get a college education actually exacerbates inequality in America.

Demos, a progressive public policy organization, published “The Debt Divide” in May to highlight research that points to growing inequality in higher education and how that translates to postgraduate well-being. The 30-page report covers a lot of ground, citing data from Department of Education surveys, the Federal Reserve’s 2013 Survey of Consumer Finances, Gallup polls and other existing research, and some of the figures may give you a different perspective on the state of education debt in the U.S.

1. Black and low-income students borrow more than others to receive a bachelor’s degree.

Among bachelor’s degree recipients in 2012, black graduates from public colleges borrowed an average of of $29,344, compared with $25,807 for white graduates and $23,441 for Hispanic or Latino graduates. For those who earned degrees from private nonprofit schools, debt levels were understandably higher (they’re more expensive, generally), but white students borrowed significantly less than the other two subgroups. Hispanic or Latino graduates took on an average of $36,266 in debt, black graduates had $35,477 and white graduates had $31,508.

There’s a similar gap when looking at the wealth of student borrowers. Students who received Pell Grants (which are awarded on basis of financial need) had higher education debt loads than those who did not receive Pell Grants. For public-school graduates, the difference in debt was $27,307 (Pell recipient) to $22,888, and at private nonprofits, it was $34,206 and $30,089.

2. White and high-income students are least likely to take out student loans.

At public institutions of higher educations, Latino students are least likely to have debt — about 63% borrow, the same as white students, and Latino students borrowed an average of $2,400 less than white students. Other than that, white students have the lowest debt burdens and are least likely to borrow in the first place.

The vast majority of black students use loans to pay for college. Among those who graduated from a public school, 81% had student loans, and 86% of private school graduates had student loans. Latino students at private schools were most likely to have debt, with 87% graduating with loan balances.

The difference is much more stark when you look at income level. At public schools, 84% of students who receive Pell Grants also graduate with student loans, compared to 46% of those who don’t receive Pell Grants, and at private schools, 91% of Pell recipients take on debt (60% of those without Pell Grants took out loans in order to graduate from a private school).

3. Black and low-income students are most likely to finance an associate’s degree.

Less than half (42%) of associate’s-degree earners take out student loans. If they do, it’s more likely they are black and have received need-based aid: 57% of black students who graduate with associate’s degrees have student loans, and 55% of Pell recipients have student loans from two-year degrees. Those students also take on more debt than other people with associate’s degrees.

4. A lot of education debt among Latino and black students comes from for-profit education.

If you attend a for-profit college, it’s highly likely you need student loans to do so: 86% of white students, 89% of Latino students and 90% of black students take out loans to get a bachelor’s degree from a for-profit college. The fact that blacks and Latinos make up a significant portion of the for-profit student population intensifies the debt inequality. Nationwide, black and Latino students account for 29% of college students, but they make up 45% of the for-profit student body.

5. Dropout rates are higher among poor students and black students.

While taking on a lot of debt to earn a degree has its negative repercussions, those people generally reap the benefits of having a college education, which helps with the high debt load. Most people who default on student loans are those who never got their degrees, meaning they have to try to tackle their loan payments without the benefit of higher earning potential. Not only are white and high-income students dealing with statistically lower debt loads, they’re also most likely to graduate.

On the other end of the spectrum, there are black and low-income students who take on the most student loan debt, and they’re least likely to earn a degree with it. Thirty-nine percent of black student borrowers drop out (according to 2009 data), compared to 31% of Latino borrowers and 29% of white borrowers. The greatest gap comes from where the students start financially: Those who are at 200% or less of the poverty line are much more likely to drop out (38% did), while those with family income more than twice the poverty level had a lower dropout rate of 23%.

Student loan debt is a concern among most people these days, but it’s far more burdensome for some groups. When taken on in affordable amounts and managed well, student loans can be a great investment in your future, and repayment can help you establish a good credit history. However, because loan payments can soak up a significant amount of borrowers’ resources, student loan debt can make the many years after graduation less financially productive. Because student loans are rarely dischargeable in bankruptcy, they need to be a top priority if borrowers hope to achieve financial stability and a good credit standing (you can see where your credit scores stand for free on Credit.com). As the statistics show, that’s a lot easier for some consumers than for others.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.