Uncle Normie

This blog is devoted to preserving the enormis whopping bullshit put out by Uncle Normie in his incessant brayings about creditwrench.

Monday, February 14, 2005

CREDITWRENCH credit repair via bad advice


Making Mountains Out of Molehills

"Uncle Normie did his usual rabid attack on CREDITWRENCH today (12/15) , completely ignoring -- as usual -- most of the FACTS of the story. If "Uncle Normie" were "reporting" that the sun rose this morning, he'd try to make it sound like a shocking scandal, unprecented in the annals of humanity. Here is his latest shot at shame:

CREDITWRENCH proposes an idea to improve your credit rating here. Problem is, not only will it do very little, if anything, to improve your credit, it will prove to be disasterous on your financial situtation.

He claims in his message that this is his idea and it's copyrighted. First of all, you can't copyright an idea, secondly this scam as been around longer than his scam.

This scheme involves borrowing $1000 from a bank by putting up $1000 dollars of your own money as security, then using the banks money to deposit in another bank etc., etc.

So what's the bottom line? This scam was created ages ago before the advent of the FICO scoring system used today by all creditors to determine, not only creditworthiness, but as a measure of what to charge for interest.

If you're in a situation that you're considering using a credit repair method such as this one proposed by CREDITWRENCH CEO Bill Bauer, your FICO score is most likely in the 450-550 range.

With a score in that range, you will find yourself paying around 15% interest on a secured loan. Now keep in mind, you are actually borrowing $3000 using his 3 bank trick. Doing a quick calculation of 15% on $3000, and that's only compounding it once annually, you will pay $450 for this $3000 in loans. Almost 1/2 of your $1000 deposit wiped out in just 12 months to play his silly "trick". As you can see from the math, the trick is on you.

He say's that the cost of the loan would be offset by the interest earned. Wrong again. First off, banks do not pay interest on their security. Anytime you use cash as security it is put into an escrow account, not a savings account.; it draws no interest for you.

At the end of 12 months you lose 1/2 your savings and this type of account being paid in full will have marginal, if any affect on your FICO score.