Reduce Credit Card Bills

Recently a friend called me. He and his wife have applied to refinance their mortgage and get an associated line of credit. They were turned down for the line of credit. And my friend didn’t understand why, because he thought his credit history should’ve been perfect. Last 20 years he and his wife were always working, generating good 6-figure income. They bought their house 15 years ago. They were always paying bills on time, were not carrying any balances on their credit cards. But - they were not monitoring their credit reports. I told him to go to Fair, Isaac & Company web site ( www.myfico.com ) - and select an option to get 3 reports (from Equifax, Experian, and TransUnion) and 3 FICO scores - and then call me back. What he found was quite interesting. The scores were ranging from 720 to 780. They were different, because different reports contained different information. On one of the reports (TransUnion) he found an 18 year old tax lien which reflected an IRS error made 18 years ago. He thought this record was removed - but it had somehow re-appeared. Unpaid tax liens can stay on credit report forever. Luckily for him he still kept an old letter from IRS confirming that this was a mistake. Second problem was a negative record placed on his account by a collector for homeowner’s insurance company. 2.5 years ago they switched insurance. Insurance was paid by the bank (escrow). There was a misunderstanding in dates between the two insurance companies (old and new …