I propose a new way to measure ones financial worthiness.  Our old system of a credit score just doesn’t work. It gives government and big business too much power over other people’s lives and it’s flawed. I grew up in an era where our leaders adopted an attitude of measuring people’s ability to succeed with a number based solely on a logically based test and scores. One example is an I.Q. test. Another example is a credit score. Other examples are tests like drivers and tests like we took in school. All these tests are left brain tests. We know that most of our brains abilities are not logical abilities. An individual that’s able to use the creative side of their brain and operates closer to Alpha in everyday living seems to be able to function better than those who don’t. The way my generation and the generations after me have been judged has caused some real problems in our society. This type thinking gives power to a few and takes power from the most others. As we were growing up it was all about the grades and scores. When we began talking about relationships and fairness, right and wrong a conflict occurred because we didn’t know how to relate. I can recall exactly the moment of my first conflict. I was a young boy playing baseball in little league. I was a first baseman and a play occurred where I didn’t have my foot on first base but the ump didn’t see it and called the runner out. When I proved to the ump I didn’t have my foot on the bag he reversed the call. My coaches and team mates were very angry with me. I was even benched for the rest of the game. It became apparent that if I was going to participate I couldn’t ever be honest any longer. A winning score was more important than good sportsmanship just like profits are more important than right or wrong.  Now I understand the teaching and its results. Our nation’s children from the 50’s-60’s till now has been taught the numbers is rational and the true measure of ability and character. The teaching by our parents and peers was based on a theory that if we teach people how to be rational they will be able to make better decisions when they are passionate and emotional. We’re finding this teaching to be flawed. The proof is we never thought bankers would make decisions like they made before the housing bubble busted. We never thought credit reporting agencies and our elected officials would let people be taken advantage of by not being responsible for the errors on credit reports that’s bilking hard working people out of billions with higher payments. We never thought any of our elected officials could be corrupted. Americans are long on worries and short on happiness. Why? Because we’ve not learned how to use the other side of our brains. We go by numbers. When we start trying to talk about relationships, emotions and passions we are lost. We communicate with numbers about passionate things. We can understand that 70% of married men and 50% of married women will have an extra marital relationship. A large percentage of those marriages will eventually end up in divorce.  These numbers don’t tell us why. We suck at relationships. The proof is in the numbers.  Ha! We must change our way of thinking now. We each need to educate ourselves about how we interrelate with each other. Once we do our nation will get back on track. We will no longer think in terms of the “end justifies the means.” Wouldn’t it be nice to live in a society where the “good guy wins?”  We’d all be striving to win instead of scared we’ll be ridiculed for doing something right. We need a system that measures more than just a flawed report like we have now. We need a way for lenders to judge a person’s ability to pay based on things other than we have now. There are too many items on reports that don’t take in consideration if the person really owed the bill to begin with or the corruption of others or if a person is likely to divorce (the largest reason for bad credit).  Yes I propose a different way to judge ones credit worthiness. I also propose we begin thinking differently in America so we can take back control over or own lives.

Unfortunately we have some facts to face that are not pleasant. We are no longer the shining light of the world. Each of us is to blame. If we truly believe that we are a country that is free and our government is an extension of what we want then below is a chart proving how we stack up against other counties. We have let our politicians past and present play us like a fiddle. I for one am tired of it. I hope you've had enough after reading this as well. All the statistics prove we are no longer the best at the things we think we are. One that broke my heart was the stat showing that we ranked with Korea when it came to how many people couldn't buy enough food to eat. I believe we are now at a watershed moment in our country. I believe we are two weeks away at any given time from civil unrest. We have become what we despise. We are controlled by a few large corporations with big high dollar lawyers buying political favors from Politian’s with golf outings and big lunches and who knows what else. The working poor and non working poor has lost their voice in a government that no longer considers what the poor say because our government has the attitude if you are poor your opinion doesn't count. They believe a person is poor because they aren't as smart as the politicians. Our government has made it nearly impossible for a small business to compete with big businesses and small towns to flourish. I believe the hidden costs caused by laws is now making it next to impossible for families to thrive as well. Hidden costs to operate OSHA, EPA and other huge legal entities cost Americans at least another 30% of their income. That's one of the reasons big companies had to take jobs overseas. Then add high gasoline taxes, sin taxes for cigarettes and alcohol on top along with a food tax we've set ourselves up for an economic catastrophe. Most food is controlled by just a few. The greatest loss is a loss of everyday people having enough belief in themselves. My grandfather made a comment once and I believed him. He said “If someone is willing to pay you $5.00 an hour you are worth $15.00 an hour to yourself." He claimed it was up to us to find what we were good at and enjoyed doing and we'd make it. We've lost our lead follow or get out of the way attitude. We've been lied to by big business and big government. I've blogged about credit scores and the effect it has on each of us. It is just one of a few ills we must correct. We must search out what facts are relevant to our future in America. Below are some of those startling facts. Nothing will change until we change them. Get involved. Help get the facts in the hands of every day citizens. 80% of us are in the same boat. Yet 80% aren't paid attention to any longer. It's a shame.

I'm watching as middle eastern countries begin unraveling. I've never heard one politician claim our last economic catastrophe started because gas prices edged up in 2007. I know it was just the straw that broke the camels back. It was the catalyst that started the downward economic spiral. Too many Americans fell asleep while big banks, big business, Wall Street and government greedily scammed hard earned money from 80% of clueless Americans. They silently made deals behind closed doors that gently siphoned away billions from the majority of now the working poor. They allowed credit reporting agencies to look the other way or make it difficult for Americans to play the economic game on a level playing field or in fact even by the same set of rules. I've read in recent articles how interest rates have historically been lower than ever before.  That may be true for a few consumers. For the majority its a myth. Here's proof. Americredit just sold their 9 billion dollar sub prime auto lending business to GMAC. They reported 4% late payments. I assure you their average interest rate was much much higher than their losses. I believe its OK for any lender to make profits. I'm not railing against that. I feel that most of their customers probably paid way to much for their loans.If you are one of the people that borrowed from them how much interest are you paying? If more than 4% of you have loans that are say 18% then I think you might see the point I'm trying to make. If the truth would ever be known my guess is 100% paid way more than a 4% interest penalty for doing business with them. I've seen auto loans with interest rates as high as 21%. To be fair I don't remember the lenders. The point is I blame us just as much. We must face the truth. We're all in this together. When one is taken advantage of it hurts all of us. Maybe we won't see it today but eventually we all suffer. When anyone pays too much for a home loan or auto loan and they send their payments to a lender that trades them as derivatives we all lose. If someone is spending $300 a month too much on a loan because their credit score is 100 points too low the extra money leaves a local economy and can't be spent on main street ever. The local eatery, clothing store or any small locally owned business suffers. This has caused the decline of rural America. This costs jobs and local economic stagnation. Eventually it effects larger and larger cities and more people.

Yes, living costs low for some. For the majority they're not. I'm very nervous watching the crisis in the middle east. At any given time we are a few hours away from $200 a barrel oil ($10.00 a gal at the pump.) If it happens we'll be looking at more American economic distress. We'll pay even higher interest rates. I'm nervous how this might affect our freedoms. I'm afraid for my children's future. Food prices are already increaing and inflation may follow. Heap all that on top of lower credit scores and the flawed financial system and we have a long lasting financial crisis to overcome. We then have lawyers that can twist any agreement or right thinking into something that benefits themselves and their clients. It doesn't matter if they were in the right or not. It matters if the client or cause the lawyer is representing has clout or money. The working poor then have even less opportunities.

The only way all this can be changed is thorough a change of thinking by everyone of us. It won't work if just some change. We all have to change. We have to begin a revolution of mind and behavior change. We are long on worry and short on happiness in America. Last December we bought more ipads and gadgets than ever before. This all in the wake of one of the worst economic downturns in American history. It was telling. It told me that our focus is still narcissistic. It's probably our national weakness. This is the weakness all the above is using to explode profits. The tools used is legal. Credit reports, higher interest rates for lower scored individuals and God knows what other unknown instruments and laws twisted to protect a few.

20%-27% of people within a 100 mile radius of the small town I live in are living in poverty.  1% of Americans owns as much as 90% of others in America. How did this happen? In my opinion greed and apathy caused by lack of knowledge. So many have simply given up becasue they haven't learned to get up after they're knocked down. I don't care how many times we're knocked down. Get up pull your boot straps a little higher and get going again. Never give up and lead follow or get out of my way attitudes are the thinking we must adopt along with fairness and empathy. Most people don;t realize that with 80 million baby boomers retiring soon our nation will change because it won't have any choice. Unless we can rapidly import wage earners and consumers into our society we will no longer have the income to support existing entitlements. Fiscal austerity and responsibility will be forced on Americans like never before. We must face this fact and plan ahead for it. That's why its important to get our houses in order now. If we correctly face the future we might come up with a way to overcome the adversity facing us all. Yes I'm very nervous on one hand. I'm also optimistic on the other. Americans have a long history of facing and overcoming adversity. I believe we'll do it again.

One of the reasons our economy is low is because lending has tightened. One reason lending is tightened is because more people don’t qualify for loans now than ever before. The main reason more people are disqualified for loans is low credit scores. Let’s do the math. The Independent Consumer Affairs Organization in Mass. released a study that claimed 80% of Americans had errors on their credit report. In my research for my book “The Complete CreditCare Program,” I found 45% with the type errors that cost them extra money on loans to be more accurate. Half of those people couldn’t even buy products or services that needed financing. It’s a double whammy to local and state economies. On one hand a large percentage of loans closed by national lenders on things like credit cards, automobiles and homes carry a higher interest rate. This robs the local economies of sales. Once this debt service money leaves the local economies in the form of higher payments the local merchants never have a chance to sell the goods and services they make their living selling. This costs jobs. It makes it more difficult for people that are in business to compete so at the end of the day more businesses fail because of lower sales volumes. If they don’t go out of business and can hold on they do it with fewer employees. The second negative impact that lower credit scores cause is the bottom half of individuals that can’t even get goods and services financed because of low credit scores. I term those individuals as “lost opportunity sales.” If one combines both these groups together it answers the question of why our economy is suffering more now than in other economic downturns. Most people are missing this as a major reason because they don’t stop and use a common sense approach to the problem and they don’t understand what’s driving the flawed credit scoring system. They don’t realize a huge part of sales increases will depend on those 45% being able to buy again in the near future. Retail is looking at a longer than necessary recovery. Look at it this way. The local and state economies would thrive if every Realtor and car dealer sold one extra unit a month because a customer improved a credit score. Add in another $300-$500 a month back into the local economies form at least 20% of the people that’s paying too much interest on loans and one has a formula for economic growth. The benefits to the community would be the economic shot in the arm we all need. It would create jobs and a better quality of life for anyone who wanted to participate. In summary if we want to improve our economies then we must take action. We must become more aware of hidden reasons that’s causing tighter credit and diminishing sales volumes. If there are injustices we must individually take responsibility and correct them. By leveling the playing field we together build a better place to live and a better quality life for everyone. I’ll have more later.

The new tax extensions will hurt 45 million households in America. There are roughly 100 million households in America and this new extension just took an average of $400.00 from 45 million of them. That isn’t a lot of money to some but it is to most of the families that are just getting by already. When the average median income (adjusted for inflation) is already lower by $800.00 and taxes already up 25% to those people since 1970 anyway. Add on top the $300-$500 a month they pay in extra interest on the homes and cars and the like and we have a recipe for even more economic problems in America. I tend to lean more Republican generally. I have never seemed to agree with Democratic ideologies even though they have good ideas as well occasionally. Does either party possess the ability to be fair, or does our system today need overhauling? Since the Berlin Wall come down have we become them instead of them becoming us? This new passage by the House and Senate has startled me. I knew something needed to be done. It seems our country discards the poor more often now because they generally have no understanding of the reality of what’s really happening. That’s not right. In my opinion our country has shifted away from its founding principles. There is no longer a judicial equilibrium in our law making or enforcement.

Most things Americans buy has an average hidden tax cost of an extra 30%. Things like gasoline, tobacco, and healthcare. Most things manufactured have hidden costs because of unfair legislation from the EPA, OSHA and others. There is no parity left for the wage earner or small business owner. What’s scary is soon there will be no parity left for wage earners, small businesses or medium businesses. Where does it end? We may already be there, we’ll know soon.

Our costs on 5 heavily regulated items now take 75% or more of two wages in a household every month when in 1970 it took 50% of one income to cover the costs on the same items. It makes it impossible for small businesses and hourly laborers to compete on a level playing field. It has caused rural communities to dwindle and greater economic segregation in larger towns and cities. Most Americans are angry and frightened when they forecast their immediate future because they’ve no longer got rights and choices they once had. Americans fear their own government more every year. They feel less free, more taxed and have a bleaker personal economic future. Until recently it was just a feeling. Now it can be proven. It’s important to mention entrapanurism is no longer rewarded but actually made more difficult by our regulations, lending practices and laws disguised to help the little guy/gal when in reality the result is opposite. This single attitude launched American prosperity and now is being looked down at. We have become a consumer society with an attitude that Uncle Sam will fix all our woes when it’s Uncle Sam that we’ve let create more problems than it’s helped correct. As many Americans set around the kitchen table figuring out what they can do without, our government spends piles on the pork. They claim it’s nothing to worry about because it’s such a small percentage of what they spend. It’s just a little thing they say.

We’re still the richest most productive nation in the world. Overall that’s true. In reality there exists a dilemma. 1% of Americans hold as much wealth as 90% of the other Americans. I’m from a school of thought that people who make it big deserve the rewards (and pain sometimes) of what they’ve accomplished. I’ll tell you this. They are not paying as much tax percentage as the average worker. There are tax loopholes they legally take advantage of. Most Americans don’t want anyone to pay unfairly. Even the rich. They do want everyone to pay their fair share. Even the rich. It’s been estimated that closing the tax loop holes would create 1 trillion dollars in revenue. That’s what the IRS collected last year overall. Fairness and parity is what Americans want. We are the one that will ultimately cause this. We control it by gaining knowledge. I’m not talking about college knowledge. I’m talking about gaining knowledge about how to make things here fair. The knowledge I’m speaking of is knowledge about the true workings and corruption of power and money that’s caused these feelings and realities of economic despair of the 90%. The seemingly little things like errors on credit reports that’s caused 30 million or more not to be able to even finance goods and services and another estimated 80 million or more people paying $300-$500 a month more than they should on homes, cars and insurance. Large conglomerates feeding off innocent families and preying off natural human faults like instant gratification and the fear of the unknown. The 90% are long on worries and short on happiness today in America. We can change this by taking heed of the things we can make a quick difference in. Many can change their quality of life just by improving their credit score 100 points. 45% of Americans have enough errors on their reports to change their quality of life with a few short weeks or months. I’ve been taught that if a person takes care of the pennies the dollars will take care of themselves. I wish it were just pennies I was talking about. It’s actually billions. The credit reporting agencies, national lending conglomerates and government just make it seem like pennies until one adds it all up.

I'll have more later

I have a client. His name is Earl Smith. He is like many people in The United States. He had taken bankruptcy in 2004. He bought a new truck in 2006 and was ready to trade it in in 2010. The dealership ran his credit and his loan application was rejected because his score had fallen very low. The dealership ask him if he'd talk to me and he agreed. He brought me his file and it became obvious there where errors. It took 30 days and he drove away in a $51,000.00 new truck. Mr Smith wanted more. He wanted his score to be in the mid 700's. So we created a strategy to make that happen. He wanted to have more credit lines, refinance his home and buy another automobile for his daughter in early 2011. The strategy is working. He has another $10,000.00 in new credit lines and has just been approved for a refinancing home loan at 3% less than his current first and second mortgage. He is borrowing enough to pay off some other debts and saving enough monthly to purchase a car for his daughter in the spring of 2011. His score will be close to the goal he set by that time. Mr Smith is a prime example of how people modify their spending habits once they understand how the credit reporting system works in America. Mr. Smith is one of many individuals that "The Complete CreditCare(TM) Program has helped. In my opinion banks and any other lenders would benefit by offering this program to all its customers. Our economy would recover faster because people would be able to spend more money on goods and services offered by businesses. Presently there are 80,000,000.00 people in the US whose credit scores fall below 600. Another estimated 40,000,000 or more with a score of 601-640. Most of the individuals with jobs today have scores that cost them extra interest on loans or can't buy. Most of these people don't realize their credit scores probably have errors on them. These errors are either costing them extra interest or making it impossible for them to purchase anything that has to be financed. The shame of it is that credit reporting agencies do not really help individuals overcome this problem. That's why businesses need to become involved. Businesses can use this as a tool to help their customers overcome this perplexing and misunderstood problem. I'll have more later.

I've been in this automobile industry since 1987. I've watched as credit scores gently fall lower. I've extensively researched this subject. In fact the last 3 1/2 years of my life I've dedicated to finding a way to help people overcome this lender slanted industry. I'm not proposing that local lenders are the problem. I believe that Wall Street, government and credit reporting agencies are the problem. I don't believe there is a conspiracy. I believe its lack of knowledge on every ones part. Wall Street has a job to do and so does government and credit reporting agencies. Unfortunately these three entities have slanted any advantages away from the consumer when it comes to financing. This has ultimately hurt us all including the three entities. In the late 80's and early nineties Fannie Mae and Freddie Mack made it mandatory each loan had to be backed with a credit report. This changed the playing field. It gave unprecedented power to credit reporting agencies over individuals' lives. The field was no longer level and fair because of the way credit reporting agencies operated. The other industries hopped on board. The automobile industry, insurance companies and utilities began using credit scores as a measure of credit worthiness. What industry is next to use these legal extortion tactics? The shame of it all is credit reports are flawed. I've seen as many as 3 collectors reporting collection efforts on the same item on the same report. This drives the credit score lower.  I've seen time and time again items on reports that are not accurate or complete. Most consumers haven't a clue of how to even read the report much less how to go about correcting it. I've witnessed countless people give up once they've started because of the stall tactics of credit reporting agencies. It costs the agencies money for people to dispute errors thereby creating the stall tactics so the consumer will give up and easing the work load and expense of the credit reporting agencies. The abuses are clear. The reasons are even clearer. Local bankers, car dealers, REALTORS and any other industry need to become actively involved in helping their customers overcome this problem or we'll all wake up one day with fewer and fewer customers and sales. In fact I believe if we'd had our credit score houses in order this recession wouldn't have been as deep or long as it has. FICO came out with a report earlier this year and claimed that 25% of Americans were below 600 in score. This proves my theory that more and more Americans credit scores are falling.  In my opinion the system is inherently designed for this outcome. Not on purpose but to make sure there is no chance for errors that might cost a lender profits. One proof is I've never seen errors on a report that was in favor of the consumer. I believe that the wealth that was created during the hay day of unions is slowly being eaten up by Wall Street and the working masses aren't getting the reinvestment into their local economies they once were. This coupled with the exodus of money from the working people in the form of higher payments caused by lower credit scores are killing sales. I believe that 40% of Americans are paying too high of payments on the things they finance. I believe this amounts to billions of dollars every year being taken from local economies and sent to Wall Street and from there who knows. Much of it is probably leaving the US. The result is each of us selling less, like now. It's time we take back the reins. I believe 40% of Americans are paying an average of $300.00 a month too much on financed items. That means that 120 million people are spending 36 billion dollars a month out of their local economies. It doesn't have to remain that way.We have a choice. The choice is to educate ourselves about the flawed credit reporting system in America. Knowledge is power. The conflicts of interest within the credit reporting industry are already exposed. We know that one of their main income streams is derived from selling low credit score lists.The credit reporting system also goes against one of the oldest principles our great nation was founded on. Innocent until proven guilty. Credit reporting agencies operate on the premise guilty until you prove you're innocent. The reason I'm writing in first person today is to show each person that reads this how important it is to take notice. We could very well be headed toward a greater economic catastrophe than we've ever known in America unless we change our thinking and take action. We have a responsibility to do something about it. I implore each of you reading this to begin educating yourself and your children about credit scores. Just imagine the economic impact it would have if every sales person sold one more home, automobile, living room suite and anything else financed every month in your community. It is possible.  I'll have more later.

There is more to improving ones credit than disputing errors on a report. Another way to improve ones credit is adding new credit lines. One way to accomplish this is to get a credit card. Some people with low credit scores can't get a conventional credit card but there are some companies that cater to low credit scored individuals and offer a secured card. If a customer can't get a regular card then this is an option. Once the secured credit card issuer sees a person is responsible they will offer that person a credit line. The line will start off small and increase over time if the customer pays the monthly bill as agreed. The important thing to know is in order for any card to help improve a score is never use more than 20%-30% of the available credit line. Also never pay off the balance. Always leave at least one dollar on the balance. The reason is because any creditor viewing a credit report wants to see how one manages credit. If one pays a card completely off a potential credit grantor doesn't see that an individual has been paying off their card as agreed. They only see one has not used their card. If a person pays their card balance to zero every month it will still show positive every month. It just won't give the biggest bang for the buck on the way it reports. The reason one never leaves a month end balance more than 20%-30% is because a credit score is calculated by how much of the total credit available is used. In other words if someone has a $1000.00 credit limit there should never be a balance more than $200.00 to $300.00 left on the card at the end of the month. If there is it could began lowering the credit score. It is called a utilization rate. If ones utilization rate is high then it begins dinging the credit score. There are different utilization rates that cause a score to change. 20%, 40%,50% and up. When someone is over 50% the credit score is hit harder. That's why when someone looks at their credit report and sees their balance is over their credit limit they should dispute it if it's inaccurate. If it's accurate try getting the credit card company to raise the limit on the card. In 2007 and 2008 credit card companies lowered credit card limits on their customers. This caused credit scores to fall as well because it caused higher utilization rates. Guess what happened then? The interest rates credit card companies increased because the credit score was lower. There's more to improving and maintaining higher credit scores than just disputing errors on a credit report. These and other strategies are all covered in "The Complete CreditCare Program" at www.creditcareinc.net. I'll have more later.

I ran across some interesting data that had been gleaned from the US Department Of Commerce. Seems like a person can find out how many cans of spam are consumed to how much the median household pays for a pair of shoes from 1930’s to 2009. All these figures are adjusted for inflation. Here is an explanation of what has happened to us from 1970 to 2007 or so. Much of the discretionary items we Americans spend our money on seems to be less today than the things we feel we must have. The median family (1 mom 1 dad and  2 kids) spend 32% less on clothes than they would have in 1970, 18% less for food, 52% for appliances and 34% less to own 1 automobile. I know when I saw this last item I thought there had to be an error. When I investigated I discovered that it included payments and everything it took to keep the automobile on the road. It seems there is much less upkeep to an automobile today than in 1970. Another important factor is consumers keep their automobile twice as long today as they did in 1970. Now for the things that cost more. This explains why it's harder to make ends meet for more people today than in 1970. Americans spend 76% more on home payments today than they did in 1970. Home payments include interest, closing and home cost. Interest rates are at historic lows. When one considers how credit scores impact the overall picture one can understand that some of the 76% increase in home payments may be inflated due to an estimated 20% of the loans in the US higher by 3% because of low credit scores. If the estimates are close an extra $500.00 month per loan of 20% of the nation leaves any local economy and going to the big bank coffers. That is billions of dollars. It’s costing retail business sales. Other categories that increased are childcare, up 100%, taxes up 25% and insurance up 74%. The median house hold spent 52% more for autos because our median family went from one vehicle to two vehicles per family. So why is the economy in so much trouble? Because cost of categories we think we need most have increased the most. In 1970 the median family spent half their income on these same items. Today families spend three fourths their income on the same things. We've had to go from a one income producer to two per family to overcome the increases of the household since 1970. Another important fact to know is the head of household is making $800.00(Inflation adjusted) per year less today than they made in 1970. Even with the addition of the second income the family still needed another 25% to keep the household going. So, the average family borrowed another 15% extra and spent another 10% that the previous generation put into savings. That's why we may very well be the first generation of Americans that won't do better than their parents unless we act. If we look at the over-all picture we must figure out how to keep more money at home and locally. We know we can't get taxes down or the cost of building homes or autos. That leaves payments. We can lessen the payments on homes, autos and insurance by making one simple correction on an often over looked item. The credit score. I estimate there are 100 points of errors on 40% of the customers’ reports that buy and try to buy homes, autos and other things that need to be financed. Half of those people generally can't buy. If the 40% will make efforts to improve their score it will have a great impact on personal and local economies. In just three months half the low credit score segment of consumers can begin impacting the number of new purchases on everything from furniture to homes. If we're looking to fix our economy we each need to start today and take responsibility now by knowing and teaching others about maintaining good credit scores. It isn't the Federal, State or local governments place to get us out of this mess. It's up to each of us to do what we can and fast. If you read this blog please forward it to friends and family. This is important to everyone. For more information go to www.creditcareinc.net . If you want to read all my blogs go to http://blog.creditcareinc.net