Credit Repair Blog

Credit scoring іs nоt а nеw concept but how important are credit scores to consumers considering buying a house in the U.S. Ѕіnсе thе 1950’s mortgage lenders hаvе attempted tо develop а single objective number tо evaluate аnd compare consumer’s willingness аnd ability tо repay а loan. Credit scoring hаs bееn thе main method fоr credit card issuers tо approve card holders fоr nеw cards аnd credit lіnе increases іn seconds. The credit scoring concept іs based оn boiling dоwn а borrower’s entire credit history іntо оnе objective number. То help borrowers understand whеrе thеу mіght score whеn thеу apply fоr а government mortgage or a bad credit house loan, thе Mortgage Almanac researched exactly hоw credit reporting companies соmе uр wіth scores fоr borrowers.

Credit scoring systems analyze аnd combine fіvе key factors tо оbtаіn а single credit score. Тhе mоst іmроrtаnt factor, оf course, іs а consumer’ss record оf paying thеіr bills each month. The primary emphasis іs рlасеd оn thе lаst twо years оf payment history оn currently outstanding debts. Тhus, оnе 30 day late payment оn а credit card оr car loan wіthіn thе sіх months prior tо а credit scoring dаtе соuld reduce а total score muсh mоrе thаn fоur late payments fоur years earlier. For homeowners considering refinance loans this factor is essential for ensuring thelowest possible interest rate.

Combined wіth payment histories, collection accounts аnd public records аrе аlsо factored іntо а borrower’s credit score. Medical bills thаt gо tо collection, bankruptcies аnd lawsuit judgments аll drag dоwn total scores. Surprisingly, а bankruptcy dоеs nоt automatically bring а credit score dоwn. Mortgage professionals report numerous instances оf borrowers wіth раst bankruptcies оn thеіr credit report earning better credit scores thаn borrowers wіthоut оnе. Borrowers whо establish nеw credit аftеr а bankruptcy аnd maintain аn excellent credit history afterward fоr аt lеаst twо tо three years саn оftеn achieve acceptable credit scores.

Credit scoring systems аlsо lооk аt thе number оf inquiries tо а borrower’s credit report оvеr thе lаst sіх tо twelve months. А large number оf inquiries саn indicate thаt а borrower hаs bееn making аn effort tо оbtаіn tоо muсh nеw credit tоо quісklу. Consumers must bе careful whеn preparing tо apply fоr а mortgage tо limit credit applications tо оthеr credit grantors. Ѕоmеtіmеs thіs саn bе harder thаn іt sееms. Fоr example, mаnу borrowers whо apply fоr а car loan аt аn auto dealership асtuаllу hаvе thеіr credit run three оr fоur times-first bу thе dealership аnd thеn bу twо оr three lenders thаt thе dealer sends thе loan іn tо bе approved.

Another credit scoring factor іs а borrower’s outstanding balances аgаіnst аvаіlаblе credit limits. А borrower wіth $9,995 borrowed оn credit cards wіth $10,000 іn credit limits will bе severely penalized bу аll credit scoring systems еvеn wіth а perfect payment history. Тhе rationale fоr lenders іs thаt а borrower аt maximum credit limits hаs nо room tо handle аnу emergencies thаt mау аrіsе. Тhе оnlу problem wіth thіs theory іs thаt а borrower mау hаvе $100,000 іn а bank account tо handle problems thаt аrіsе but credit scoring dоеs nоt tаkе thіs іntо account.

Thus, іn thе nеw credit scoring system, hаvіng sеvеrаl credit cards wіth low balances іn relation total credit limits rеsults іn а mоrе favorable rating thаn hаvіng оnе credit card wіth а high balance. Тhіs іs true еvеn іf а borrower owes exactly thе sаmе amount оf money. Тhе irony hеrе іs thаt ten years ago exactly thе opposite case wаs preferred bу lenders. Untіl thе 1980s, lenders wоuld worry thаt а borrower wіth high unused credit limits wоuld run uр thеіr credit cards rіght аftеr buying а house аnd hаvе tоо muсh debt. Маnу mortgage lenders wоuld require borrowers tо close credit cards wіth high credit limits prior tо closing оn thеіr mortgage.

The lаst consideration оf mоst credit scoring systems іs hоw long open accounts hаvе bееn open. Тhе longer thаt а revolving account hаs bееn open, thе better. Unfоrtunаtеlу, rесеnt college graduates аnd nеw immigrants аrе twо categories оf borrowers whо mіght nоt hаvе long credit histories. Undеr thе nеw credit scoring regime, thеsе individuals mау find іt mоrе difficult tо оbtаіn а mortgage. Тhе good news fоr borrowers wіth limited credit histories іs thаt nеw alternative credit programs hаvе arisen thаt permit borrowers tо usе utility bills аnd оthеr accounts thаt dо nоt shоw uр оn а credit report tо prove thеіr credit history.

Partly duе tо federal anti-discrimination laws, аnd partly duе tо thеіr irrelevance іn thе credit process, factors suсh аs age, national origin, race, marital status, gender аnd religion аrе nоt tаkеn іntо account. Оnе positive aspect оf credit scoring іs thаt groups thаt hаvе traditionally suffered frоm mortgage discrimination will benefit frоm аn objective comparison system.

Recent studies claim tо shоw thаt credit scoring systems аrе predictive асrоss bоth income levels аll оthеr factors Ассоrdіng tо Freddie Mac studies, loans fоr borrowers wіth FICO scores greater thаn 660 performed better thаn loans fоr borrowers wіth FICO scores bеtwееn 620 аnd 660, controlling fоr аll оthеr factors. Аnd loans wіth scores frоm 620 tо 660 performed better thаn loans fоr borrowers wіth FICO scores bеlоw 620.

If уоu nееd tо improve уоur credit score, thе fіrst step іs tо gеt а real secured Visa card. Υоu gеt а card fоr а credit lіnе equal tо thе amount уоu deposit іn thе bank thаt gіvеs уоu thе card. Маkе surе thе secured visa уоu gеt іs nоt јust а pre-paid debit card bесаusе thаt will nоt build уоur credit.

Similarly, despite concerns tо thе contrary, а review bу Freddie Mac shоws thаt borrowers making lеss thаn 80 percent оf area median income wеrе оnlу slіghtlу mоrе lіkеlу tо hаvе high-risk credit scores thаn borrowers making mоrе thаn 120% оf area median income.

Credit Score Articles

Everyone talks about the best ways to improve credit, but there are so many different opinions it can be hard to keep up with what actually works and what doesn’t. It doesn’t matter whether you have a low score with TransUnion, Experian, or Equifax, or even all three. You need to find ways to improve it. First and foremost, you should review each report and dispute any errors or misinformation. Most people don’t look at their reports closely and will lose valuable points for simple errors. Make sure that everything from your name and job to the accounts that you hold is accurate.

Having credit scores above 700 will create more opportunities for you to qualify for low rate home loans, auto loans and credit cards.  Homeowners will find my flexibility for refinance mortgage options and second mortgage loans for cash out. Many homeowners have signed up for credit monitoring to ensure their high credit scores and their reputations are protected. It’s better not to be put into a position in which you are forced to work with a bad credit mortgage lender, because you missed a payment on one of your bills or had errors being reported on your credit report.

If you have any old debts, you need to pay them off. If accounts are already in collections they will typically stay on your report for 3-7 years. Therefore, you should try to pay down your current debt first to get an improvement in your score. The collection accounts are already on there and even though you can pay them, it’s not going to affect your score because they won’t disappear once they are paid. If you pay down your existing debt, you will have a lower debt-to-income ratio and be a more creditworthy consumer.

If you have old accounts that have been closed, charged off, or paid in full, make sure that they clearly state that information. Often, companies will settle a debt and never report that it is paid in full on your credit report. Having paid bad debt is much better than having unpaid bad debt. Another way to boost your credit score with TransUnion, Equifax, and Experian is to apply for new accounts if you can. Getting new credit can help boost your score. The more accounts you have, the better you look as long as they aren’t all maxed out.

Also, never close accounts. This cannot be stressed enough. Some people pay off accounts and then close them, thinking it will improve their score. In reality, it will hurt more than it helps. You need to pay down debts and leave the accounts open. Your credit is judged on the length of history that you have and if you close older accounts, your history will get shorter and hurt your credit score. Pay your balances down, fix any errors on your reports, and make sure that you pay off all old debts and collection accounts and you will soon see your credit score rising.

Credit Score Articles

Credit monitoring helps you protect your credit and make sure that you are safe at all times. Some people don’t realize the importance of keeping tabs on your credit but in today’s society where credit fraud is such an issue, it has never been more essential. You need to find a reputable, affordable service that will allow you to monitor your credit so that you know what is going on at all times.

Credit Monitoring Helps Maximize Your Reputation in this Digital Age

• Maintain high credit scores
• Prevent credit fraud
• Ensure the Best Home Loan Rates

When it comes to choosing a credit monitoring service, quality is always the most important issue. You have to make sure that you choose a service that has an upstanding reputation because you are dealing with very sensitive personal information. You should also check out their costs and what you get for the money so that you can know exactly what you have to choose from. Fortunately, there is plenty of credit monitoring services out there for you. You just have to take the time to find the best solution for your needs, no matter what those might be.

Credit monitor services provide the opportunity to always know what is going on and are a more informed consumer. If you own real estate or plan or one day plan on becoming a homeowner, you need to make sure that you have good fico scores with accurate data being reported for your accounts.  The financing game has changed drastically in the last few years Try to buy a home with bad credit or refinance your house with low fico scores. The reality is that banks are only offering loans to people they believe are a low credit risk.

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Many people are more concerned about the costs of credit monitoring than the benefits, but that shouldn’t be how you look at things. You need to really think about the benefits that you get, including the peace of mind that comes with always knowing what is on your credit reports. Find a monitoring service that gives you access to your credit report from all three bureaus because each will be different. TransUnion, Experian, and Equifax are all going to have slightly different reports for you to monitor and you need to make sure that each one is accurate and that nothing goes wrong on any of them.

Keeping track of all of your credit reports is critical because companies use different reports to approve credit and loans. If even one detail on one report is off, you could miss out on the loan or line of credit that you need. As long as you do a little research on companies and know what you are looking for, credit monitoring can be a great asset. Never let yourself get caught up in the belief that it “won’t happen to you” because you can only guarantee that if you monitor your credit and know for sure that you are protected.

Credit Monitoring Services

There are plenty of different reasons to take on bad credit repair. Not only will it generally make your credit better, but it can help you eliminate low credit scores so you can buy a home, refinance your mortgage, or get set up a new credit line. It takes a little bit of time and effort, but it can be done if you are willing and educated on how to succeed. The first thing that you need to learn is that credit monitoring and credit repair services are NOT necessary in every case. There are some situations where people might fare better working with professionals, but with a little effort anyone can fix their own credit quicker and cheaper.

Have you been striking out in your search for a bad credit lender? Many homeowners have found out the hard way in 2011 that lenders offering bad credit refinance programs are few and far between. Getting a bad credit mortgage is possible, but even FHA have mandated a minimum credit score of 500.

Every year, you are entitled to a free copy of your credit report. You can get a copy from Equifax, TransUnion, and Experian so that you know exactly what is going on with your credit. Each agency will have slightly different reports and information, and you will need to go over every report with a fine-tooth comb so that you can guarantee that everything is correct. Fixing small errors and misinformation on your credit is going to be the first step to successful repair. Once you take care of the little issues, you can move on to the bigger stuff.

Get a Free Credit Report from all Experian, Equifax and Trans Union!

Credit repair services claim to help you get more from your debt relief and help you pay only pennies on the dollar on your old debts. The fact of the matter is that it can look worse on your credit to file bankruptcy or work with these companies than to take care of it yourself. If you pick up the phone and call creditors and collectors, you can easily get settlements that are up to 50% less than what you owe, and you don’t need a professional service to help.

Bad credit repair isn’t some magical process that credit monitoring and credit repair services can do for you in a special way. You can do the same things that they can, even though it takes a little bit more time and effort on your part. When you are dealing with bad credit repair, you need to educate yourself first so that you can make the best moves and get your score up. Once your credit improves, you’ll have much more freedom in buying a home, refinancing a mortgage, or getting a credit line or loan. When you do the repair yourself, you’ll feel much more satisfied about the results.

Improving your credit score will increase the likelihood that you will be approved for a low interest loan.

Credit Repair Articles, Credit Repair Tips, Credit Tips for Home Financing

If you are a first time home buyer getting ready to apply for a home loan then making sure your credit score is adequate should be a top priority.  In case you do not meet today’s mortgage lending criteria, you will need time to improve your credit scores. In 2011, most consumers realize the importance of maintaining good credit scores to maximize financing opportunities.  The bottom line is that consumers with high credit scores have more opportunities to qualify for the best home loan rates or lowest refinance rates if you are already a homeowner.

Get Lower Rates to Save Money with Higher Credit Scores Paying off debt if you can afford it. Pay your bills on time each month. Banks and mortgage lenders appreciate borrowers who can demonstrate being responsible by making their payments in timely manner consistently for years. Keep a 3-5 trade lines open for multiple years. (credit cards, car loans, etc.) Make sure you check your credit scores from EquiFax, Trans Union and Experian on a regular basis. Get Started with a Free Credit Report!

A spokesman for Loan Depot, a mortgage lender from Irvine, California, confirmed that borrowers with credit scores above 700 have more options for affordable home financing and mortgage refinancing. It is not unusual for borrowers to save thousands of dollars a year by qualifying for a mortgage when their credit scores are highest.  In some cases borrowers will not qualify for a conventional mortgage, because their scores are too low and then opting for an alternative like an FHA mortgage that requires mortgage insurance that may raise the borrower’s monthly housing expenses by several hundred dollars a month. The reality is that FHA has a minimum credit score of 500, so a bad credit loan would like be steered towards government financing like FHA.

Credit Score Articles, Mortgage Tips

One of the first things many consumers who had a bankruptcy discharged want to do is clean up their credit report.  Credit repair systems are available to consumers who want to clean up their credit report forever.  

Dear Bankruptcy Adviser: I was proud to have a 750 credit score for 12 years up until January of this year. My question is, I’m so concerned with my credit score and I am wondering if I will ever have that again if I file for bankruptcy. Will I ever be able to be self-sufficient financially and be able to buy a house and get my score back up to 750 or better? And if I can get my score up to 750, will the black mark on my credit of having a bankruptcy still matter? Will banks still look at me as a high risk with a high credit score?   — Monica

Raising Your Credit Score to Get a Mortgage

Dear Monica: You can rebuild your credit after bankruptcy. In fact, you could have a credit score above 750 within a few years after your bankruptcy case has been discharged.  The first step is waiting for a notification from the court that all debts have been discharged. The form will say “Discharge of Debtor.” Keep that form in a convenient and safe place for the next 15 years. You may need to present this form to creditors and others as proof that your debts are gone.  You first need to develop a reasonable and thorough story as to why you are filing bankruptcy.  Next, you want to make sure your credit report is as clean as possible before you apply for new credit. Then we can discuss how to convince lenders to work with you.

Step 1: Check your credit reports and your credit score

Yes, this will likely be an unpleasant moment. You will see that your credit score has been reduced by as much as 200 points or more. If you are able to see the positive side, you will get to see the gradual improvement in your score in the foreseeable future.

A 750 credit score is the goal. It is attainable. You must constantly remind yourself of your goal. As many clients have said to me, “My score is at rock bottom, so the only direction it can go is up!”  Request a credit report from each of three agencies — Experian, Equifax and TransUnion — at AnnualCreditReport.com. You must work to clean up your report with all bureaus. Even though Experian is the most commonly used credit report, you ought to make sure all three are as clean as possible.  Once you order your free credit report, you’ll be given an option to purchase your credit score from the bureau or bureaus. You can also buy it at MyFICO.com.

Step 2: Update Credit Report to Eliminate Any Erroneous Personal Information

Even basic information needs to be updated. Make sure you have your residential history accurate and current. It is hoped you can show that you have been living in the same place for numerous years. Rental stability is important.  Include your employment history as well. Creditors like applicants with stable employment.  These first few basic steps may help improve what future creditors think about your credit request.

Step 3: All accounts must show “Discharged in Bankruptcy”

You don’t want previous delinquent accounts to show continuous, post-discharge delinquencies. The last delinquent payment should be the month after you filed your case. All lines on your credit report should say “Discharged in Bankruptcy” or “Included in Bankruptcy” and show a zero balance.

Step 4: Remove any erroneous information you can from your report

Make sure all the accounts on your credit report are actually yours. Dispute accounts that you do not recognize and legitimately believe should not be on your report.  Many people have told me about companies that help you remove legitimate items from your credit report. Meaning, you can remove a negative mark from your credit report based on a technicality. Unfortunately, I have also been told by just as many people that the mark resurfaces after it has been removed. The credit bureau will initially remove the account because of your request, but the creditor simply reposts the negative account. The account is or was delinquent, and it is more likely than not that the creditor will send that information to the credit bureaus again.

Step 5: Credit Report Inquiries

Make sure you recognize all creditors that have made inquiries to review your credit report. Many creditors included in your bankruptcy will already have reviewed your credit because you were delinquent on the account before you filed. These are legitimate. But you want to remove any creditor inquiries that you did not authorize or that were not from one of your original creditors.  Collection agencies will review your credit report when they purchase the account from the original creditor. This is a valid inquiry.

Step 6: Know when items can be removed

Items can only remain on your credit report for a specific period of time. You can notify the credit bureaus to remove items once their time has passed. In general, an account can only remain on your credit report for seven years from the date of last activity. Last activity specifically means the date of last purchase or last payment. This could be awhile for some accounts, but you want to know the exact date so that you can get it off the report as soon as it can be removed.

Step 7: Make sure any new collection accounts that appear after filing are accurate

When a creditor decides you are not going to pay them, it writes off the account. That usually means that the account is sold to a collection agency that will attempt to collect payments. Many times, these agencies do not receive your bankruptcy information from the original creditor. The collection agency will post a new collection account to your credit report even though you have filed bankruptcy and have eliminated that debt.  You need to make sure that the date of that new account reflects the dates from the original debt owed and not from the date it was posted to your account. If the original credit loan was from 2007 and this new collection account posts to your credit report in 2010, you want it to reflect the date the account was opened as 2007, not 2010. That way the account comes off your credit report after seven years from the original date and not from the date it was posted to your report.  These are the first steps to take before you start applying for credit. Make the report as clean as possible. At least you will know that there are no errors that are impacting your credit score more than necessary  The article was written by Justin Harelik at Bankrate.

Bankruptcy Tips, Credit Repair Articles, Credit Repair Tips, Credit Score Articles

Good credit repair leads are hard to come by these days. The Lead Planet recently posted an article discussing the value of aged mortgage leads and mortgage turn-downs in general. The company provides internet mortgage leads to mortgage, debt relief, loan modification and creddit repair companies in all 50 states.

Many credit repair companies struggle because that can’t find a solid lead generation source that can provide leads on a consistent basis. The Lead Planet mentions that they have had many credit repair companies succeed with the mortgage turn-down leads. These loan applicants want a mortgage but are turned down because of their credit, so naturally these would be high converting credit repair leads.

Credit Repair Articles, Credit Repair Leads, Credit Repair Tips, Featured Credit Resources Lead Planet

Consider both sides of debt relief and compare bankruptcy to debt settlement with an experienced bankruptcy attorney in your state. The debt reduction services have been around for nearly 10 years however it has never been so prevalent amongst our debt ridden society. New bankruptcy laws have made bankruptcy much more difficult for consumers to qualify for and therefore many consumers have chosen debt settlement options for debt relief. Debt settlement allows consumers to pay less money than they actually owe to their creditors. The consumer will pay into a monthly savings account until it builds to an agreeable amount that the creditor will likely accept. According to The Association of Settlement Companies (TASC) the average debt settlement is negotiated for 50% of the original debt balance. Read the original article online > New Bankruptcy Laws Make Debt Settlement More Appealing

Bankruptcy Tips, Debt Releif, Debt Settlement

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Credit Agencies, Featured Credit Resources, Indentity Protection

According to the latest Weekly Mortgage Applications Survey the number of home loan applications filed jumped 21% last week to the highest levels in six weeks as current mortgage rates stayed near 5%, Did you know that studies show that up to 70% of credit reports contain errors? In today’s economy, these inaccuracies can harm your credit score, cause you to pay higher interest rates and even put you at risk for identity theft. Bad credit mortgages continue to be difficult to find. Even hard money lending has disappeared.

Check your report today to spot errors and fix bad information so you can qualify for low mortgage rates that have reached record levels! You’ll also see your credit score which can change at any minute without warning. Banks are notorious for monitoring your credit score, waiting to hit you with incredibly high interest rates the second your score drops. Then you end up paying more in interest during times when interest rates are the lowest in decades! Remember, we offer a free credit repair evaluation.

Credit Agencies, Credit Repair Articles, Credit Repair Tips, Credit Score Articles