Bad Credit

Facing unemployment in a dismal economy, Vernita Humphries of Randallstown was elated when she landed a job last year. But just days before her start date, the chief financial officer telephoned her personally to rescind the offer. Her bad credit, stemming in part from a divorce and the cost to care for her mother after a stroke, had come back to haunt her. "It was like a real bad feeling in the pit of my stomach," said Humphries, who worked in payroll for 35 years and couldn't fathom what hadn't checked out in her background.

Robert Robinson wanted to be a security guard. Easter Morris tried becoming a cleaning lady. Kyla Whiting sought work at a handbag outlet store. All say they were denied jobs because their would-be employers learned that they had bad credit. In response to such stories, state lawmakers now are moving to limit the ability of businesses to run credit checks on job applicants. "A credit report should not be the measure by which people are judged in terms of whether they can do a good job or not," said Sen. Catherine E. Pugh.

IS YOUR credit history soiled? You're exactly the person a growing number of mortgage bankers want to see.They're dying to lend you money to buy or refinance a house.Consumer writers like me used to laugh at the ads headlined "Bad credit? No credit? No problem!" It's always a problem, we used to say.Not any more. So-called "subprime" loans are hot. Bankers are discovering what finance companies always knew: There's money in lending to those borrowers that the snootier banks don't want.Traditional mortgage lenders talk only to "A credits."

Facing unemployment in a dismal economy, Vernita Humphries of Randallstown was elated when she landed a job last year. But just days before her start date, the chief financial officer telephoned her personally to rescind the offer. Her bad credit, stemming in part from a divorce and the cost to care for her mother after a stroke, had come back to haunt her. "It was like a real bad feeling in the pit of my stomach," said Humphries, who worked in payroll for 35 years and couldn't fathom what hadn't checked out in her background.

Start Over. Brand New Credit File.The message, stenciled on wooden signs tacked to trees along major thoroughfares in Baltimore and suburban counties, offers encouraging words for credit junkies looking to leave their bad credit ratings behind.But the man selling credit salvation is in fact offering an altered identification that conveniently erases many connections to old credit problems.Officials of government agencies in Maryland and many other states say the practice skirts the edges of fraud and perjury.

After bankruptcy, can there ever be a mortgage? The short answer is yes. People with bad credit can always get a mortgage if they are willing to pay high fees and high rates. But what about when bad things happen to people with good credit? What happens when someone who has always paid her bills on time is financially overwhelmed by an illness, a layoff or a divorce? Will she ever again qualify for a fair mortgage with an interest rate of less than 10 percent, or will she be consigned to the high-fee, high-rate sub-prime mortgage market forever - or to rentals?

On the prowl: Many corporate executives are looking for new positions because they're dissatisfied with their jobs, finds a survey by executive recruiter Paul Ray Berndtson and Cornell University. The survey of nearly 1,900 executives found nearly 30 percent plan to leave their jobs as soon as they find something else. Many survey respondents cited job insecurity or heavy workloads.Getting credit: It's hard enough for entrepreneurs and small-business owners to get credit, and really tough if they've got a bad credit rating.

The housing industry, rocked in the last several months by a plunge in sales, is finding business by turning to those previously shunned -- consumers with bad credit.Just a year ago, bankruptcies, car repossessions and late or missed payments on other forms of credit were enough to immediately disqualify borrowers from getting a mortgage.But the industry's slowdown over the past year, caused by steady increases in mortgage rates, has prompted mainstream real estate agents and lenders to give a second look at those who before stood almost no chance of owning a home.

Robert Robinson wanted to be a security guard. Easter Morris tried becoming a cleaning lady. Kyla Whiting sought work at a handbag outlet store. All say they were denied jobs because their would-be employers learned that they had bad credit. In response to such stories, state lawmakers now are moving to limit the ability of businesses to run credit checks on job applicants. "A credit report should not be the measure by which people are judged in terms of whether they can do a good job or not," said Sen. Catherine E. Pugh.

The General Assembly passed a bill last night that would tightly restrict insurance companies' use of credit reports in deciding which consumers to insure and what to charge them for auto and homeowner's policies. The legislation, approved in the final minutes before the midnight end of the 2002 legislative session, apparently would be one of the strongest restrictions on the practice in the country. Gov. Parris N. Glendening has not said whether he would sign the bill but has expressed support for the concept.

With foreclosures, short sales and credit card defaults at record levels, an aggressive breed of firms has sprung up offering to power-wash consumers' damaged credit files and boost credit scores, thereby eliminating records of bankruptcies and mortgage delinquencies, even when the information is accurate. Such services - promoted on the Internet and in radio ads - are attractive to people who want to buy a house but whose credit scores are too low for a mortgage through the Federal Housing Administration, Fannie Mae or Freddie Mac. The problem with these companies, say federal and state authorities, is that their promises may be deceptive and illegal.

Every day, thousands of people type the words "credit repair" into an Internet search engine. Thousands more type in phrases like "bad credit" or "bad credit repair." Figuring out how to repair your credit is on the minds of homebuyers, sellers and owners, each of whom has realized that having stellar credit gives you financial options that simply aren't available to those with low credit scores. Unfortunately, some of the Web sites that come up in a search for "credit repair" can do more harm than good.

Efforts are under way in Howard County to help Kwaku Atta Poku, the Columbia cab owner who lost his home to foreclosure through no fault of his own, but for now he and his family continue to struggle financially. Niel Carey, 75, a retired Ellicott City teacher who has used Atta Poku's sedan service, said he was moved to create a fund to help Atta Poku through Howard County's Grassroots Crisis Intervention Center. County officials are also investigating whether they can help Atta Poku, 55, his wife and three small children, who are searching for a new place to live while he works to rebuild his AAAA Star taxi business.

To Americans drowning in debt, Andris Pukke styled himself as a lifeline to solvency. He first promised loans to people with bad credit when he was barely out of the University of Maryland, College Park in the early 1990s. When consumers paid for loans that didn't come, Pukke encountered the law. Undeterred by a guilty plea to mail fraud, Pukke then pursued credit counseling. He launched AmeriDebt Inc. in Germantown and perfected a new wrinkle in what had been a community-based service - advertising on late-night TV. This time, hundreds of thousands responded.

Let's say you've been at your job three years -- maybe 10 or 20. Your boss won't know if you pay your bills late, drive too fast or recently got into a fight at a bar, so long as you do your job and don't let on that anything is amiss. Right? Think again. Employers are running background checks on long-standing employees as well as new ones. The number of checks on all workers has tripled during the past eight years, experts said, mostly because of growing security concerns, the technological ease in obtaining the information and its declining costs.

I am a 38-year-old man. Thanks to a divorce, legal bills and overspending, I have a lot of debt. I've never missed a house or a car payment, but I still have a few blemishes on my credit. I'd like to refinance my first and second mortgages, which both are at 8.5 percent. That would enable me to save a couple hundred dollars a month, which could save my life right now. But because I've been turned down for a few credit cards, I'm afraid of being turned down for a refinance. I recently got married, and my wife's credit isn't perfect either, thanks to a bankruptcy in her past.

Psssst. Want some money?You too can get a "guaranteed" loan. Just call this toll-free number, send in a few thousand dollars and. . . .Sound good? What you might be buying is simply a chance to lose a few thousand dollars.That's the message from the Better Business Bureau as it prepares to announce today that "a national epidemic" of loan scams is ripping off consumers and small businesses nationwide.These so-called "advance-fee" loan schemes -- advertised in newspapers and magazines and on television and radio -- offer guaranteed money in exchange for fees ranging from $100 to $100,000 or more.

Every day, thousands of people type the words "credit repair" into an Internet search engine. Thousands more type in phrases like "bad credit" or "bad credit repair." Figuring out how to repair your credit is on the minds of homebuyers, sellers and owners, each of whom has realized that having stellar credit gives you financial options that simply aren't available to those with low credit scores. Unfortunately, some of the Web sites that come up in a search for "credit repair" can do more harm than good.

I have been living paycheck to paycheck since my divorce eight years ago. Needless to say, I have horrible credit. I am about to receive a large settlement from an accident. Where do I start to fix my bad credit? I need to buy a decent vehicle because mine is 12 years old and falling apart. Also, I would like to buy my own home. Any suggestions would be greatly appreciated. You have a rare opportunity to set yourself on the right path. Don't blow it. First, make an appointment with a tax professional.

After bankruptcy, can there ever be a mortgage? The short answer is yes. People with bad credit can always get a mortgage if they are willing to pay high fees and high rates. But what about when bad things happen to people with good credit? What happens when someone who has always paid her bills on time is financially overwhelmed by an illness, a layoff or a divorce? Will she ever again qualify for a fair mortgage with an interest rate of less than 10 percent, or will she be consigned to the high-fee, high-rate sub-prime mortgage market forever - or to rentals?