When I found out Pacific Gas & Electric (PG&E) destroyed my credit by 100 points for an $8 non-payment by my tenants who moved, I was devastated! I was more than 80 days into my primary home mortgage refinance when my bank told me that after checking my latest credit scores (they checked once at the beginning of the process, and again 80 days later since it’s taken so long) one score sat at only 670, thereby precluding me from the 2.625% 5/1 mortgage interest rate!
Upon hearing the news, I plopped down on my sofa and began shaking my head. All this time spent dealing with the mortgage officers wasted. My nerves were already frayed at day 80 because I was guided by my bank in the beginning that I would close in 45 days or less But, due to the high volume of purchase loans, refinance loans were less of a priority.
I just couldn’t believe that a $8 utility bill by my tenants didn’t pay from THREE YEARS AGO could kill my credit score and derail my mortgage refinance process. I kept wondering how come the same bank didn’t find anything wrong with my credit score a year ago when I refinanced, or the year before that! Not one to ever give up, I began formulating a plan to FIGHT BACK!
One of the biggest benefits of being a blogger is that if you have a grievance, you can air your grievance and more than likely someone will listen. Of course it helps if you have a larger following, but even if you have a small following, you have power thanks to Social Media.
Step 1: Wrote a post entitled, “Corporate Greed By PG&E Killed My Friend’s Wife And My Credit Score“. In the post, I lay out exactly what happened and held nothing back. What PG&E did was wrong for not better maintaining its gas pipelines, crushing my credit score without making a solid attempt to contact me by e-mail or over the phone, and paying its CEO multi-millions in compensation the year of the tragedy.
Step 2: Tweet the post to @PGE4ME, Pacific Gas & Electric’s official Twitter account to make them aware of my grievances. Within half an hour, a representative from PG&E direct messaged me back asking if they could look into my account and clear up my credit score. I traded messages back and forth with him and he assigned someone on my case.
Step 3: Make sure they don’t drop the ball. Have the representatives confirm with you that the problem has been fixed. It’s easy to get excited when someone from the company gets back to you. Sometimes, they are just doing that as part of a routine where nothing meaningful gets done. You must be diligent in following up with them on their progress to resolve your situation. They need to know you will Tweet and write as many posts as it takes to have them address your problem.
Within three days, PG&E wrote a “Clear Credit Letter” to all the major credit score rating companies, including the one that reported a 670 on my latest report. PG&E also sent the letter to my bank, who then proceeded to clear the final stages of my mortgage refinance application. I’m happy to say that even though it took 100 days to complete, I am now saving several hundred dollars a month in interest on my mortgage.
Most people aren’t going to receive as swift attention from corporations simply because they do not have a presence online. It’s taken me three years to build almost a couple hundred thousands unique visitors a month and several thousand Twitter followers. With these type of metrics, companies are going to listen.
I am inviting ALL of you who feel their credit scores have been wronged by a corporation to share your story on ONIG Financial Blog and fight back. I want to help stamp out abuse by big corporations who are too quick to crush their client’s credit scores without taking the time to contact their clients first. I am happy to tweet your post to the corporation you are dealing with and be your champion.
* Late payments you had no idea you had. $8 non payment for a utility bill by a landlord’s tenant. First of all, the utility bill was under my tenant’s names for two years. How about sending them the bill Second of all, PG&E could have simply e-mailed or called me to pay the $8 bill since they have my information on file for the past 11 years! Finally, how about sending the bill to my rental property so I can see the bill? Instead, they send nothing and give no warning! Late payments will kill your credit score, so make sure you are on top of your payments!
* Identity theft leading to erroneous bills, leading to non payment. Identity theft is growing bigger and bigger as more of us pay bills online. One friend got her credit score demolished by 130 points to 620 because someone used her identity and her credit card to rack up $700 worth of clothes! She had no idea until 10 months later when she checked her credit score online that the department store had reported the claim. She spent the next six months trying to prove to the authorities and to the department store that she did not buy what they thought said she bought. What a disaster!
* An account you thought was closed but wasn’t. Some people have lots of credit cards to take advantage of introductory interest rates or rewards points. One friend opened up a Home Depot credit card to get the immediate 15% off for his $1,505 bill for a garden remodel project. The HD card was also 0% for the first 12 months so he figured he’d pay the card off in the very last week. For some reason, my friend wrote a check for $1,500 and not $1,505 and thought everything was all square. It turns out that because he didn’t pay the extra $5, HD charged 25% interest for 12 months – 1 week for $1,508, leaving him with a remaining $358 he had no idea about until he went to finance a car two years later! My friend’s credit got hit by 90 points to 685, resulting in a car loan rate of 8% vs. 1.9%. He passed on the car and spent the next three months getting HD to fix his score.
1) The bigger the corporation, the more hoops you will have to jump through to get someone to help you out. Big corporations love to pass the buck onto someone else. If you’ve ever been hung up by a representative half way through a sentence, or been transferred to someone else, you know what I’m talking about.
2) Don’t ever assume your credit score is safe. For three years, I was blissfully unaware that one of my credit scores was 680 until my latest refinance. A credit score doesn’t matter until you need it. Then, you will be sideswiped if you don’t act quickly.
3) Always double and triple check that your accounts are closed. Be a little paranoid about account closing processes, especially if you tend to take advantage of many offerings. It’s easy to lose track and once you do, you might never find out until it’s too late because large corporations tend to shoot first and ask questions later.
4) Leverage the power of social media. You might want to open a Twitter account or start a blog just because you’ve been wronged or frustrated. Lucky for you I’m willing to support you if I feel you have a legitimate case.
5) Don’t ever give up! Many corporations are counting on you to roll over and die. Why do you think it takes 10 different options to get through to someone in customer service on the phone? Corporations purposefully make things so complicated that they count on you to give up. Don’t give up if you have been wronged. Fight for your rights!
* Check Your Experian Credit Score Today: Check your latest Experian credit score straight from their website. Experian is the most sourced of the big three credit agencies. It’s a good idea to see what your credit score is before applying for a loan. If it’s below 720, you won’t get the best rate, but at least you can spend time to improve your score. Furthermore, 1 out of 4 credit reports have errors, negatively affecting one’s credit score. I had a $7 late electric bill that crushed my credit score by 100 points and almost derailed my mortgage refinance. The scary thing is, I had no idea!
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Updated for 2021 and beyond.