Mailbag: Hacking your credit score, Too Much P2P, and Giving Away $150

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One of my favorite sports writers, Bill Simmons blends humor, pop-culture, and sports into a very successful column for ESPN. My favorite column of his is the mailbag. He publicly answers select questions from his readers. Many times the readers set him up with a punch line joke, the way that Joey set up Chandler on Friends for a number of years. This has to be one of his easiest columns to write.

I get piles of mail, but too often it's from public relation firms trying to get me to post the latest press release from a tax preparation company. I rarely get questions from you, the reader. On the occasion that I do, it's often a bright point in my day. (Note: if you want to make my day brighter right now, feel free to use this comment form or e-mail me at [email protected]). You do leave me comments, and that is much appreciated. Some of you might not think that I read them, but I do. If you leave a website I often give if a visit as well.

This past week, I got a couple of especially good ones that I'd like to share:

I wrote an article about how to hack your credit score. Mike Hardin tore himself away from his Netflix addiction to leave the following excellent comment:

If you want to loan yourself money to build a credit history, why not just use a secured credit card and pay 0 interest. Go to your bank and apply for a secured credit card....

A secured card is another option. It might even be a very good option if you do the right research. I did a little research and found some downsides at with a secured credit card:

  • "Read the fine print. Some people have gotten secured cards and found their entire limit consumed with fees before they ever used the card."
  • "Do all banks offer secured credit cards? No. Linda Sherry, editorial director of Consumer Action, says her organization is seeing a trend in banking away from secured cards and toward unsecured cards with lower limits and higher interest rates and fees."
  • "Some are good. They have low fees and treat customers as customers instead of as cattle. The bad ones take advantage and extort the clients because of their situations. Then there's the ugly, which are completely despicable. They'll give you the card, but you have to buy this insurance policy for $55 a month."
  • "If the issuer doesn't report, you've lost a major benefit... Ask if the issuer will flag the report to the credit bureaus as a secured card. Consumer Action points out that such a flag could be a deterrent to rebuilding credit."

To recap, they may not be offered by your bank, but if they are, they may try to trick you with fine print and fees or trying to push another product on you. Lastly they might not report to credit card bureaus, but if they do, it could be flagged so that it doesn't help you. I imagine it would be difficult to set up automated withdrawals for the secured card, since they want to collect fees from you missing payments. In contrast, Prosper deducts monthly payments to be automatically from your bank account. Being Lazy, I'm a fan of automation.

After my most recent article, the Future of P2P Lending, Dusting off My Crystal Ball,
Tyler said:

Seriously, Lazy Man, I'm getting sick of your P2P lending posts, your affiliation with them, and your sales pitches about them. I know they are an advertiser of yours on here. Your content is getting boring and applies only to people who use these services. Most don't and that is why you keep on trying to push Lending Club. I'm out as a subscriber. Yes I know it won't make a difference, but at least you know.

That's a great way to my attention. I actually got a similar e-mail three weeks ago when I got back from Prosper's Annual conference. I got all fired up with everything that I learned there. I came back with no less than 6 pages of notes of ideas to write about. After that e-mail, I've decided to tone down the P2P lending content a bit. An example of that is the aforementioned article on hacking your credit score which I had written 3 weeks before publishing it.

I admit that I have been a little over-zealous with the P2P lending articles. I will try to be space them out a bit, but keep in mind that I did create the Carnival of P2P Lending, so I would still expect 3-4 articles a month on P2P lending.

Lastly, the frisky challenger in the Future of P2P Lending article, Lending Club has contacted me about giving away three $50 Lending Club accounts to those on the fence about P2P lending and not willing to risk their own money. I stand nothing to gain by this except for the satisfaction of knowing that three of my readers are $50 richer for having giving it a shot. If you are one of those on the fence, leave me a comment here and let me know. You must use a valid e-mail address so that I can contact you. I'll pick three people at random over the weekend.

I'd also appreciate feedback on this mailbag concept, even if this one is more of a "comment-bag." If you do like it, a great way to let me know is actually leave a question for a future mailbag.

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Last updated on August 1, 2011.

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