May 15

There are plenty of places in the world where the quality of your life and your standard of living are not dependent on the number of your credit score. The United States is not one of those places. Not only it is difficult to get car loans, student loans, and home mortgage loans, and credit cards with bad credit, it can also be difficult to get good rental housing, a bank account, a cellphone, electricity, and even a job if you have bad credit.

According to the National Bankruptcy Research Center, plenty of American families are finding out first hand how difficult American life can be when you have a bad credit score in a credit-obsessed society after 1.41 million adults filed for bankruptcy in 2009. But that number is small compared to the estimated number of Americans who are not bankrupt, but still have a bad credit history. The fallout of the Great Recession, chronic unemployment, Ponzi schemes, banking failures, bailouts, and great big real estate bubble burst is that more than 100 million Americans now have negative entries on their credit report, and a diminished lifestyle because of it.

Having a low credit score doesn’t just mean that you can’t go on shopping sprees with your American Express Black card. Most Americans are unaware of the many ways that bad credit can negatively affect their lives:

  • According to a Society for Human Resource Management (SHRM) study, six out of ten private employers check credit histories of job applicants and consider those scores when making hiring decisions. Thirteen percent consider credit scores even for employees who won’t have any financial or money-handling responsibilities or any access to sensitive information.
  • Although federal law prohibits an employer from using bankruptcy as a reason for not hiring, for firing, or for denying a promotion, 25% of employers admitted in a SHRM study that they have done so.
  • More than 90% of auto insurance companies use credit score information to determine premiums. The lower your credit score, the more it will cost you to drive a car.
  • Homeowner’s insurance premiums for people with bad credit will be higher too, with the rationale that people with bad credit do not maintain their property as well as people with good credit.
  • Not only will utility and cellphone companies require people with bad credit to pay a deposit for services, they will often charge a higher price for those services as well.

As credit scores are factored into more and more aspects of daily living, a low credit score no longer just means that you have bad money management skills, it’s starting to mean that you also have bad character, and you only deserve a second-class life.

Nobody knows better about the detrimental effects of bad credit on everyday life than Geoff Williams. Not only is he a personal finance writer for media outlets like AOL,, and Consumer Reports, he is also one of the millions of Americans who got consumed by debt and declared bankruptcy. The book that he co-authored, “Living Well With Bad Credit” is based on both his professional research and his personal experience.

These days Williams considers himself to be a bad credit expert not because he wrote a book about it, but because he has survived the many consequences of bad credit and lived to write about it. His conclusion? Living with bad credit is different, but it doesn’t have to be bad, if you have a good set of strategies.

“The truth that the banks and credit card agencies don’t want you to know is that you can live an awesome fun, fulfilling life with a very low credit score,” Williams wrote in his book. “The Land of Bad Credit (LBC) should be no more than a temporary stop on the way to a better place. Think of it as a twelve-hour layover in Cleveland on your way to Maui” Williams writes in his book, along with co-author Chris Ballish.

While banks and credit card companies don’t like people with bad credit, they do like people to stay in debt. One of the reasons the U.S. economy is recovering slowly is because it is dependent on consumer spending. But consumers can’t afford to do a whole lot of spending without credit, and 50% of the population no longer qualifies for that credit. It is a sad conundrum that prosperity cannot be restored until lenders can find a way to saddle consumers with more debt.

Economists were encouraged when consumer debt rose $1.95 billion in March, 2010, which was only the second monthly increase in consumer debt in fourteen months. But isn’t it ironic (or scary) that what’s bad for personal finances is seen as being good for the economy?

For the half of the American population that is not taking on more debt because their bad credit scores will not allow them to, the challenge is to create a good lifestyle for themselves without the credit crutch. Some of the strategies that Williams and Balish give for confronting bad credit roadblocks in their book include the following.

  • Bad Credit and Banks: If you’re having trouble getting a bank account, you can enroll yourself in the ChexSystems Second Chance program, which will allow you to reverse your bad banking reputation.
  • Bad Credit and Job Hunting: If you think you’re getting turned down for jobs because of bad credit, consider explaining your credit situation with your potential employer even before it becomes an issue. Once an employer gets a look at your credit report, they may make hiring decisions before you ever get the opportunity to explain yourself unless you bring it up first.
  • Bad Credit, Mortgage Loans and Housing: If you’re having trouble finding a place to live, looking for places that are being rented or leased by individuals, or sold with owner financing. Individuals are often willing to overlook the past in ways that corporate policies never will.
  • Bad Credit and Car Loans: If you need transportation, look into car share, casual carpooling, long-term rentals, and mass transit. To purchase a car, consider finding an individual seller who will keep the title and allow you to make payments directly to them, instead of a bad credit auto loan company that will charge an exorbitant interest rate.
  • Bad Credit and Traveling: If you’re having trouble planning a vacation because hotels and car rental companies need credit cards, consider an all-inclusive package that you can pre-pay ahead of time. For business trips, use a debit card and make sure there is enough cash in your checking account to cover the deposits hotels and car companies will require.
  • Bad Credit Repair and Debt Desperation: If you are desperate to save or fix your credit, you are a target for growing number of financial scams. Consider never making a financial decision from a place of desperation.

There are many negative realities in living with bad credit. But one positive aspect about having bad credit in 2010 is that as the number of people with bad credit grows, the stigma attached to it is shifting, and the negative stereotypes are fading. It’s becoming clear that people with bad credit are not necessarily bad people. If it took a global economic meltdown for that to become clear, then the Great Recession wasn’t all bad after all.

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Aug 27

The headlines are filled with news of Google’s court-ordered exposure of a blogger’s identity after the blogger allegedly wrote defamatory remarks on her website, “Skanks in NYC.” For some reason the blogger, Rosemary Port, thought she was entitled to write anything without consequences because of the First Amendment right to free speech and anonymity.

She was wrong.

The incident has been referred to as cyberbullying, cyberstalking, internet defamation, online harassment, and cyberterrorism by citizen journalists and bloggers who either don’t know the difference between the terms or don’t care. Because internet law is defining itself before our eyes, it’s easy to get confused. Some recent court cases, though are making the differences between these online offenses clear.

On September 19, 2006, Sue Scheff was awarded $11.3 million after a person repeatedly posted statements about Scheff on public forums and internet sites which attacked her personal character and business practices. This was a case of internet defamation or internet libel because the defendant’s statements were published, because they accused Scheff of illegal, immoral or unethical conduct, and because they caused damage to Scheff’s personal and professional reputation. At the time, this was a landmark decision and the largest settlement ever awarded for internet defamation.

On August 21, 2009 Keeley Houghton pleaded guilty and was sentenced to spend three months in a young offender institution after verbally attacking another teen on Facebook for four years, and posting a death threat. This was a cyberbullying case because it involved threats, harassment, humiliation, and embarrassment, and because both people involved were minors.

In November 2007, Tracy Adams was convicted of 10 counts of computer trespass after he repeatedly hacked into his ex-girlfriend’s computer to retrieve personal information and use it to cause chaos in her life. In July, 2009, 18 year-old Bryce Dixon pleaded no contest to first degree cyberstalking after forwarding photos of his ex-girlfriend’s breasts to others. Dixon could have been sentenced to as much as 30 years in prison in this case, but was sentenced to probation and anger management classes instead.

Both of these cases are being referred to as cyberstalking, because they involve the use of technology to maliciously harass, threaten or intimidate out of anger, revenge or desire to control. Cyberstalking is a term that is used liberally, but which is associated mostly with cases involving some sort of sexual communication between an adult and a minor, and cases which involve ongoing harassment, usually by an ex-spouse or romantic partner.

On August 6, 2009, a “distributed denial of service” attack (DDos), was launched against Twitter, Facebook, YouTube, LiveJournal, and Blogger, which overloaded their servers, crashing their websites for hours and days. The same type of DDoS attack had been launched against several U.S. government websites In July, 2009, including the Treasury Department, FTC, Pentagon, and Homeland Security Department. These incidents are being labeled as cyberterrorism, although that term is generally reserved for incidents that cause physical harm, extreme financial harm, or death.

While boundaries of behavior on the internet are in the process of being defined, the legal rulings so far are basically sending the message that the behaviors that are against the law in the real world are equally criminal in cyberspace.

For some reason there seems to be an assumption among many web users that the only rule on the internet is that there are no rules. But freedom of speech has always had legal limits, with defamation legal proceedings dating back to the 1700’s.

There has never been complete absolution granted by the First Amendment. Some internet writers, however, seem to be operating under the belief that absolution is possible if they hide behind cyberspace anonymity when they attack, harass, or harm others with words.

That belief is wrong.

That was the message that the court was sending with the surprisingly high amount of money that was awarded to Sue Scheff, which included $5 million in punitive damages. The judgment sent the clear message that free internet access does not mean the freedom to say or do anything without consequences.

In Scheff’s case, the judgment was against a woman who had posted negative comments, insults, and false statements in forums and on websites – hundreds of them in just six months. Some of the negative posts were published under anonymous pseudonyms and some comments were posted as if they were written by Scheff herself, although she hadn’t engaged in the conversation.

Because of the frequency of the posts and constant reference to her name, a Google search of “Sue Scheff” returned pages of results that were linked to these online accusations, insults and misrepresentations. In the eyes of those who believe everything they read on the internet, Sue’s personal and professional reputation was destroyed. Sue had become the victim of a “Google bomb.”

“A public shaming has to be one of the worst things anyone can experience, whether it takes place in a small community or on the larger stage of media coverage,” Scheff says in her book about the case. “I wasn’t able to sleep. I was starting to cry a lot in private. The smile that had been so quick before had become strained and forced when I attended meetings or public events. I wasn’t hard-pressed to force too many smiles since my invitations were drying up.”

Scheff co-authored her book, “Google Bomb,” with the lawyer who helped her secure the landmark judgment, John W. Dozier, Jr. In the book Dozier provides legal insight about internet defamation, and also provides some proactive advice about steps that can be taken to protect your reputation even before you are attacked.

“The monsters of the web are thieves in the worst way” Dozier wrote in the book. “They steal your name and your reputation, strip from your grasp the opportunities our America offers, convert your pride to embarrassment and your honor to shame.”

At the heart of internet defamation, which seems to have grown to pandemic proportions, is the issue of anonymity. Blogger Rosemary Port has announced her intention to sue Google for revealing her identity as the owner of the Blogger “Skanks” site on which objectionable remarks about a New York model were posted. Port believes that Google has violated her right to privacy by revealing her identity, and consequently, making her accountable for her words.

“I would think that a multi-billion dollar conglomerate would protect the rights of all its users,” Port was quoted as saying by the New York Daily News.

This issue of internet anonymity is addressed in “Google Bomb” by Dozier, who has watched the concept get challenged in a number of court proceedings. “There is no absolute right to online anonymity,” Dozier says in the book. “The courts have long recognized the need to unmask those who hide behind false identities on the Internet. Those who defame, those who spam, those who hack, and in some circumstances those who use wrongful commercial speech… their anonymity is rarely protected.“

It is this anonymity which makes the internet a breeding ground for defamation. “They are scared to disclose their identity because they don’t have the courage to stand up to their convictions,” Dozier says in “Google Bomb.” He adds, “They are scared to get caught. Free anonymous speech is their virtual ski mask as they threaten and rob families and businesses of their livelihoods and good names.”

The media attention given to the “skanks” case, and the court-ordered accountability that Port faced has left the blogosphere buzzing and the Twittersphere tweeting with questions about accountability and limits. There is a heightened awareness about both the motivation and the effect that written words have, especially when they are accessible to billions of people.

It is not the right to express yourself freely in a public forum that the court is reining in with these recent decisions. Rather, the limits are being placed on the right to cause harm to others because you have the ability to anonymously access a public forum. For the victims, it’s about regaining the right to life, liberty, and the pursuit of happiness, which internet defamation, cyberbullying, and cyberstalking steal.

“I think you have to walk a mile in those shoes to completely grasp the intensity of desertion and despair that those of us who have lived it feel,” says Scheff.

Google Bomb,” written by Sue Scheff and John W. Dozier, Jr. is scheduled for release on September 1, 2009.

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