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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 Bankrate.com 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.

Last updated on August 1, 2011.

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15 Responses to “Mailbag: Hacking your credit score, Too Much P2P, and Giving Away $150”

  1. Kevin Rooney says:

    Lazy Man,

    Great blog!

    I’m a bit partial to your P2P lending posts, actually, since it’s how I first came across your blog about two months ago. My favorite posts of yours are those dealing with passive & alternative income, your efforts to increase net worth, etc. They’ve actually got me thinking about starting my own blog to generate passive revenue.

    Anyway, I think P2P lending fits in perfectly of the theme of your blog — a lazy man trying to generate passive income. If you’ve gotten advertisers from being one of the few blogs to talk about it so be it! You’ve been pretty fair about it. Heck you called your top-of-the-page banner advertiser vaporware!

    Anyway, I like the concept of the mailbag, but only when there are compelling questions to be answered, so you may want to space them out quite a bit. Maybe ask specific questions to the readers and make it a Q&A?

    I’d love to have a shot at the Lending Club account. I’ve been thinking about jumping into P2P for a while, but my fiancee and I are saving for a wedding and a house right now so it’s hard to free up money. If the $50 does well I’d probably view it as worthwhile and re-invest.

    Keep up the great work! I’m reading daily!

  2. I am more of a recent reader, but I do enjoy your P2P articles – you are also really up front about your affiliations, which I appreciate.

    I like the mailbag idea – it would add some variety, and it’s always interesting to read about another blogger’s feedback.

    We’re focusing on debt reduction right now – I opened a Prosper account, but haven’t funded it yet. A free $50 from Lending Club would give me a chance to test the waters – and something else to blog about!

  3. Chuck says:

    I’d be interested in giving Lending Club a whirl, especially with $50 to kick things off. It’s pretty cool concept they’re using.

    As far as the mailbag, I think it never hurts to field questions. Not everyone is at the same level of knowledge though, so there are people who get frustrated at simplistic or overly complicated questions. Maybe target your mailbags at different levels of sophistication?

    Good blog, you’re in the short list.

  4. Matt says:

    I’d like to be included in the $50 p2p lending drawing.

    And I, actually, disagree with your commenters about too much p2p lending posts. Before reading your blog, I knew very little about them. Now, i feel that I know much more than I did.

  5. Chad says:

    I have thought about P2P lending for a while and was always chicken to try it with my own money. I know you can help other people through it. I think that the micro lending that they are doing in africa and India is incredible and very empowering. The P2P lending is just as empowering. It is the precursor to bringing back a true group help and support system for the community rather than making it predatory or capitalistic. Sure the rates on some of the loans are high but then they are matched with the risk just like every other makretplace. Still I have been hesitant to dive in with my money. Maybe with this 50 I can start and see what it is like.

    I too for one agree with Tyler, my joy of reading your blog has decreased a bit with the firehose of P2P stuff on it. I was almost surprised when I saw the credit score article. I thought to myself maybe he is breaking away from his rut even though he has hitched himself to the P2P wagon. Granted its Lazy Man and Money so nothing in the title says generic tips. It just states that you are going to post your thoughts on money. However I think you are doing yourself and your readers a disservice by narrowing your article topics to one area.

    thanks for writing. Keep up the flow.

  6. Ben says:

    I’ve heard great things from friends about prosper, I dont know anyone who has used Lending Club. I’d love to check it out.

  7. Mister E says:

    I’m glad to hear the P2P lending columns will be scaled back, I’d stopped reading this blog as much as I was because it seemed as if the site was just becoming a vehicle to advertise these services.

  8. nwdirector says:

    I’ve been on the fence about P2P, but I don’t yet see the value v. time factor. Seems like I could get obsessed trying to find the right loan to fund. I read somewhere it was a lot like gambling in that regard (that may have been you, as I’m embarrassed that I forgot).

    Well, being a fan of the occasional wager, I’m in for the $50 of “house money” to try this investment! :)

  9. jonR says:

    I, as well, have considered P2P lending, but because of the high risk and long-term results of the stock market, I have been tempted to not get involved with P2P. I think it has great potential and is a good idea. I like the idea of distributed social lending, and I think it has great potential.

    Lazyman, I like the mailbag idea. I think it could be a great way to focus articles on what your readers want to hear, (just don’t get too carried away with it).

    P2P articles: I don’t mind the P2P articles, especially since you went to the Prosper conference. You may consider just making fewer but longer articles on this packed with as much information as you can to appease all your readers.

  10. Tom says:

    Seriously, Lazy Man, I’m getting sick of your personal finance posts, your affiliation with them, and your pitches about personal finance. I know you have advertisers of yours on here relating to the use of money. Your content is getting boring and applies only to people who use money. Most don’t and that is why you keep on trying to push personal finance. I’m out as a subscriber. Yes I know it won’t make a difference, but at least you know.

    Why don’t you go write about health or something. Wait…

  11. I wouldn’t worry too much about a couple of comments, since it seems you are planning on cutting back a little on the posting @ P2P anyway-but I’ve probably learned more about P2P from your blog than any other I read. I’ve been hesitant to try either thus far as the risks don’t seem neccesarily worth the reward, but I would be interested in trying it out.

  12. Kate says:

    Hey, found your blog from a link on Getting Rich Slowly. I’ve been reading up on P2P lending lately, but have been hesitant to try to myself, but would definitely be interested in the draw, thanks!

  13. jasmine says:

    I would be interested in the drawing. I like the idea of a P2P lending system, but am wary of the potential losses. Its one thing to take a measured risk on a company I guess, but when you place that risk on an individual…the other thing i’ve been considering doing is joining microplace. makes me feel like i might be doing some good for the world while still making an investment (with almost nil returns other than the satisfaction that I have done some good with my ill-gotten gains!)

  14. dountoothers says:

    I’ve been a prosper guy for a while myself. I’d be interested in trying out lending club if it were free. Hopefully you have not already drawn the winners yet.

    Cheers!

  15. Lazy Man says:

    This contest is closed. Congrats to Chuck, nwdirector, and Kate.

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