Wednesday, December 01, 2004

How To Ensure You Get The Best Rates Possible

I've survived Thanksgiving and am now gearing up for Christmas. My weekends are booked through the end of the year and, as a result, there probably won't be much real estate-related activity going on for me. Well, at least not until my next LLC gets funded sometime after December 13th. Of course, I'll always make time for a great deal...

One year after Congress passed the FACT Act, a bill requiring the three major credit reporting agencies to give people a free copy of their credit report, those reports are just now starting to become available. Begining today, residents of Western states (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) can request their copy. On March 1, 2005, residents of the Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin) can request theirs. Residents of the South (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas) have to wait until June 1, 2005. Those in the East (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia) have to wait the longest - September 1, 2005.

To get yours, visit They are free and you can get one every 12 months. You are NOT required to buy anything or pay any amount to get it.

There is a good article about this on the Motley Fool website.

Why should everyone do this? As Robert Kiyosaki says, your banker never asks for your report card. He asks for your financial statement. A big part of that financial statement is your credit report. Go over this report to make sure there are no errors on it. And I guarrantee you will find errors. I first reviewed my credit report over a decade ago and found at least 5 errors, including incorrect former addresses, old credit card data, and incorrect student loan information. When I got married, I reviewed my wife's report and discovered some credit card accounts that she thought she had closed were still open.

Your credit report has a major influence on the terms you can get on mortgages, car loans, insurance, credit cards and lots of other products. You want the best terms possible, so make sure your report is correct.


Danny said...

Shaun, I'm in the middle of reading your whole blog from the first post on and I wanted to say Thank You. I really mean that. This kind of 1st hand experience is priceless.

I also wanted to ask you if you knew of any other blogs that are along the same vein as yours, but start from a point in time before the author owned their first asset? (this is where I currently am)

Danny said...

*ahem* I just found your "The long story of how I got started" post.

Wow. It's amazing how quickly it all happened. May I ask one question? You said, "I contacted my CPA"... so I guess you already had a CPA. Can you give any advice for finding a good CPA?

For example, if you had to get a new CPA today, what questions would you ask them? what would you watch out for?

Thank You for your time.

Shaun said...

I first used a CPA when I formed my LLC. I had her set it up and do the paperwork. After that, I started having her do my taxes and other CPA-type stuff. I found her by looking through the phone book for CPAs that that specialized in real estate.

As for what to look for or ask, just find out if they are familiar with real estate transactions and LLCs (or whatever other business entity you choose to use). If you are consulting with them about setting up a company, ask which type of business entity they would recommend and why. I did some research on my own and felt an LLC would be better for me. My CPA reached the same conclusion (without me telling her what I thought), so that was a plus. It was also important that she listened to me and was easy to talk to.

Having said that, I know I will not be keeping this CPA forever. As my investing activites grow, I will likely switch to a CPA that is more agressive in reducing taxes and liablities. Luckily, I am in the Phoenix area and can use Diane Kennedy's firm. But for someone just starting out, I think a CPA with basic skills should be fine. Just remember to re-evaluate your needs and their capabilities occasionally and don't be afraid to switch when you've outgrown your current CPA.

Shaun said...

Update on credit reports: I requested mine through from all three providers. I had now problems with Equifax. They were by far the easiest and most consumer friendly. Printing my report resulted in a detailed 20 page printout. Experian was so-so. Their website is nice, but you cannot print out your full report. There is a link to print out the report, but it only displays one section. If you want all sections, you must visit each page and print it out from your browser. TransUnion sucks. Yesterday I was unable to get my report because their server wouldn't respond. I am assuming it was because they were swamped with requests. This morning, I tried again and had problems. Part of their process is to create a login on their system. I tried using a new one and they told me I already had one and to use that. When I tried that one, I was prompted for a credit card number and was told my report would cost me $9. When I emailed their tech support, I was told to contact a subsidiary to resolve the issue. That is where things currently stand.

By the way, my Equifax report contained no errors. My Experian report contained several - wrong driver's license number, several incorrect previous addresses, and several incorrect spellings of my name. I attempted to use their on-line dispute tool, but was told I had to dispute these items by mail or phone.

Anonymous said...

Yep, I had a similar experience when I got all my credit reports. Yes there were some glitches (TransUnion got stuck halfway through for me too), but boy howdy! is this better than going to each one individually. Sooo glad Congress did this (see, they do get some stuff right!).


whorl1quote said...

Shaun, thanks for such wonderful blog. I wonder if you have any comments on my post in richdad:

Since you mentioned you used LLC to hold tiles, I wonder if you have any difficulties obtaining loans? Also how do you separate multiple properties in one LLC??


Shaun said...

Thanks for the kind words. I responded to your post on the site.

Shaun said...

Oh.. I forgot to address the LLC part of yor comment. I use one LLC per property. Here in Arizona, this is feasible because setting up an LLC is relatively inexpensive and there are no yearly costs that need to be paid. In other states (California comes to mind), they are more expensive and this may not be cost-effective.


misteropus said...

I just tried to get my free credit report from Equifax via and it blew up! I guess I'll go back and try the other two.

misteropus said...

OK, I managed to get the one from Experian without any problems. The credit history was 100% correct (all paid on time or paid in full). However, I found some errors with my personal information, mostly involved with my name. In addition, the biggest mistake was the name of my spouse and I was able to use their on-line link to dispute it. As far as the address info is concerned, they were all correct except for one in Arizona.

Matt J said...

Would doing these free credit checks directly through the credit unions be considered hard checks or soft checks? Would they ding my score a few points?

Shaun said...

They are soft checks - meaning your score will not be impacted when requesting this. I believe the legislation expressly forbids that.

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