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We've all heard the term Big Brother is watching -- well.
Another entity involved in your life is spying on you your bank.
They're able to keep a closer tab on you without you even knowing about it here to explain how this is possible and how can affect your credit is John Alzheimer at credit dot com.
-- -- so what in the heck are banks doing to it.
This is why I am always your least popular GAAP and these are the things that we shouldn't be talking about -- -- It is our -- -- John.
Yet it is now and good.
To be a little bit sneaky and plan that's -- with respect to how banks are watching you look we're all very very familiar with credit reports and credit -- And those aren't -- standard and overt methods that banks used to watch what we did it right.
But there is an entire slew of products and services that are sold -- the banking environment.
That allow them to take a different angle or different type of peek at us and us consumers are none the -- aria on confuse give -- examples there.
Okay I -- you really great one on collection tracking.
The fair credit reporting act allows collection agencies to use credit reports as far as is part of their debt collection practices.
What consumers don't know is that a lot of times when they step out on a -- and then don't at -- a news for a change of Madras.
The collector has nowhere to send a collection notices because they can't find them but.
And for the credit report.
The next time you apply for new credit or you update your address so one of your other existing creditors the new address shows up on your credit reports and spam -- law.
They credit reporting agencies will sell that new piece of information to any collection agency that is trying to track you down you have essentially -- our best.
And now can be collected upon -- crazy what's your response model.
All response all this is great.
All that stuff you get in the mail all the pre -- credit card solicitations.
A lot of people think that those are just half pounds -- kind of shotgun approach defending those things out.
Absolutely not -- there is a strategic reason why you're getting back in your mailbox and it's not just because you have decent or or moderately decent credit.
It also can mean -- you have what's called a decent response score and response or is designed to do you -- what.
Determine the likelihood of you responding to one of those offers.
If you have a good enough response or your mailbox is going to be all every single day you get home from work with but how are your thoughts behind I don't understand how that -- fine.
Well remember eight.
-- -- -- looking at your credit report and you don't even know about it when you apply for alone it.
You know that the bank is gonna play your credit that's not a secret we're we know that it doesn't bother us because we're used to it.
But what you don't now is that your credit report for almost constantly being looked at.
By potential creditor is an existing creditors.
And you have no clue about it what you're looking at your credit reports almost on a daily basis -- you see all of those inquiries.
But most consumers don't don't do these types of -- I just know about it now because -- watching.
What about behavior scores what does that mean how are they used.
This'll this'll actually quite fascinating and behavior score -- think of -- normal fight so credit score looks at everything on the credit report to come up what you're kind of -- level of -- A behavior scored just won't accept a performance all warn if -- accounts not all home just one of them but it takes a very very deep look at that account.
How long -- -- -- -- -- what are your historical balances are you paying it all or are you revolving.
Are you paying late are you paying -- late fees are you paying over limit -- none of that stuff that's on your credit report.
But it is in the master files up all of your credit card issuers and they can score that type of behavior that's called -- behavior -- I gotta tell -- I interviewed a guy one time he said he went to Wal-Mart.
And his credit was -- -- with.
His credit card issuer called him and said we're shutting you down because we don't like the way you're spending needs if they really look at how -- abandoned at the changes.
And it looks like maybe your world has change you change maybe they think you change jobs for whatever reason.
They can pull that credit one more of these -- -- estimation.
While we can thank the card act for this when Jerry the card act now acquire the credit card issuers.
Have a better understanding of our ability -- make payments on credit that's called capacity your ability to make -- payment.
And the Federal Reserve is going to allow our house allowed it.
That credit -- -- community to use credit reports as a basis to determine capacity so they don't have to get copies of your pay stub which is incredibly inefficient.
So they can you were caught any comment income prediction models -- capacity models and a look at your Crowder report -- will determine -- If someone's -- have a lot of debt and is making all the payments on time -- we are going to assume that they -- income or the capacity to be able to make those payments therefore.
They pass the sniff test and we can -- them -- your card.
Terrible about this you know how in accurate credit reports are they're making judgments based on information and credit reports that are typically not -- So -- need it cannot skirt and I even -- Can -- -- -- that you know it's even more crazy about best -- that we consider for the next.
Hour and talk about twenty other schools that no one's ever heard of that are in our credit reports almost on a daily basis and we'll never know anything about them that's what's really crazy.
John your -- scare me to death art -- thanks for coming and we appreciate it.
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