Credit Repair Blog

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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

Getting advice about credit scores and credit repair can be complex.  Most reputable credit repair companies agree that there are no overnight credit fixes. Credit repair can be a time consuming process and it takes plenty of patience and determination. And the credit restoration company couldn’t be more right on when they say that the best way to take care of your credit is by being responsible.

Lexington is a law firm specializing in credit repair and they use their knowledge of the law and years of experience perfecting a proven formula to provide results while protecting your rights. They offer an account management system that is internet based.  Lexington has provided service to over 100,000 clients across the United States. It’s easy to get started on the path to better credit. We have changed our services recently and now offer several new products. When you sign up for either of Veracity’s credit repair services, we will provide a free credit report and score.

Credit Repair Articles, Credit Repair Tips, Featured Credit Repair Company, Veracity

Though credit availability is expected to pick up this year, it will be a slow improvement, according to a new report released by a group of senior bank economists. At the unveiling of their 2010 economic outlook, members of the American Bankers Association’s Economic Advisory Committee said consumer and business lending will recover when other economic factors also show more strength. Debt relief companies continue to look for better credit options for their clients.  Bad credit debt consolidation loans have nearly disappeared as the subprime market challenges continue.  “Consumers are still retrenching to some extent consolidating debts and small businesses as well are very conservative and reluctant to take on more debt at this point,” said Scott Anderson, a senior economist at Wells Fargo & Co., Mr. Anderson said he expects improvement, “but it’s just going to take some time for that to happen.”

The group predicted 3.1% growth in the gross domestic product. That would be an improvement of 3.4 %age points over 2009 but much more modest growth than the 6% that has followed previous recessions. “I refer to it or characterize it on my own as a ‘half-speed’ economic recovery,” said Stuart Hoffman, the committee’s chairman and the chief economist at PNC Financial Services. He referred to “constraining factors,” such as continued problems in commercial real estate and a lack of confidence in consumer spending, as holding back growth.

Credit Agencies, Credit Score Articles, Debt Relief, Financial News

The First Amendment may the flashiest tool at the disposal of lawyers defending credit-rating agencies sued by angry investors, but sometimes a good old hammer gets the job done just as well. On Tuesday, Manhattan federal district court judge Lewis Kaplan dismissed a case against Moody’s and McGraw-Hill’s Standard & Poor simply because the ratings agencies didn’t have anything to do with the offering documents at issue. The litigation began in the summer of 2008 in New York state court. A purported class of investors in mortgage-backed securities underwritten by Lehman Brothers sued Lehman and several Lehman executives, including former CEO Dick Fuld.

The litigation was eventually removed to federal court. After Lehman entered bankruptcy, the plaintiffs amended their complaint to target the ratings agencies, alleging that they were underwriters and sellers of the securities.  The amended complaint cited the Securities Act of 1933, which imposes strict liability for making false or misleading statements in securities offerings. But in their motions to dismiss, both Moody’s and S&P claimed that they weren’t responsible for the offering documents–an argument Judge Kaplan apparently found persuasive. “The judge has obviously agreed with the arguments that we made that the ratings agencies have never been held to be potential defendants under these provisions and it was a distortion of the statute to try to bring claims against the ratings agencies, said Moody’s counsel Joshua Rubins of Satterlee Stephens Burke & Burke, according to Reuters.

Will the dismissal help the ratings agencies in two similar cases pending in Manhattan federal district court before Judge Jed Rakoff and Judge Harold Baer? “Hope so,” said S&P counsel Floyd Abrams of Cahill Gordon & Reindel, when we asked him.  Lead plaintiffs counsel was Cohen Milstein Sellers & Toll. We e-mailed Steven Toll but didn’t hear back.  Investors incensed over the good ratings the agencies gave to bad securities may have to pin their hopes on a case involving the collapse of a structured investment vehicle, which is being litigated before Manhattan federal district court judge Shira Scheindlin. As we reported last year, Judge Scheindlin allowed one of 11 common law fraud claims to proceed against S&P, which had hoped to be completely shielded by the First Amendment.

Credit Agencies, Financial News

A recent Washington Post article reported about some of the new risk based lending option happening with conventional and FHA loans.  Unfortunately very few borrowers are qualifying for home refinancing or bad credit debt consolidation loans.  Many debt loan applicants are migrating towards to bankruptcy and credit card debt settlement, because traditional home equity loans and consolidation mortgages are no longer available. 

According to US Debt Settlement Firm’s Jeff Morris said, “Thousands of Americans need to eliminate their debt and mortgage loans are no longer an option for consolidating debt unless the borrower has a ton of equity in their home.”  Morris suggests discussing your financial state with a trusted debt settlement company. After debt negotiations, credit repair becomes a viable option.

Credit Repair Articles, Credit Repair Tips, Debt Releif, Debt Relief, Debt Settlement, Financial News

To get the best mortgage rate on a home loan, or to qualify for the lowest rate for an auto loan or credit card, you need some new strategies to bump up your score – and keep it there.  Borrowing money today requires impressing an increasingly hard-to-please crowd. With creditors of all kinds more cautious than ever, you need an A+ application to land the best terms — and that means an A+ credit score, the number lenders use to judge your risk of default.  If your credit get hit you could be forced to take out a bad credit mortgage that carries a much higher interest rate. Consider credit repair solutions before seeking financing for a home car or business loan.

The most commonly used credit scoring system, called FICO, rates people from a very risky 300 to a pristine 850. And right now we’re in the middle of a credit score crunch: “You need a 750 or better today to have the same treatment you got with a 700 two years ago,” says John Ulzheimer, president of consumer education at Credit.com.

John D’Onofrio, CEO of Autoloandaily.com, seconds that: “Two years ago a 680 was enough to get a great car loan rate. Today it’s often the minimum to qualify at all.”  Think you’re still in the clear? Don’t be so sure. Lenders have been making changes that could cause your score to slip from excellent to average. Improve and protect your number with these strategies:

Know Your Credit Score. You have three FICO scores, based on your credit reports at the three credit bureaus: Experian, Equifax, and TransUnion. The numbers tend to be in the same ballpark, so pony up $16 to get one representative score at myfico.com. You can get an estimate free at Creditkarma.com. But the FICO score gives you a better sense of what lenders see. 

Look for Mistakes. Your scores are only as good as the information they’re based on. And a third of people who’ve pulled their reports have found errors, according to a Zogby poll. That’s good reason to read your report.

When you buy your FICO score, you’ll get a copy of the report it was based on. Get gratis histories from the other bureaus via annualcreditreport.com (you’re entitled to one free from each bureau every 12 months).

Spot an error? Request a correction, following the instructions on the bureau’s website. Let’s say the size of a credit line was misstated or an account was mistakenly marked delinquent. Getting the error fixed could raise your score as much as 200 points, says Ulzheimer, who has also worked for Equifax and FICO.

Never, Ever Be Late. As you’ll see in the pie chart on the right, the biggest chunk of your credit score comes from your payment history. Just one late payment can shave 100 points off a 750-plus credit score, says Ulzheimer. Lenders can’t tattle on you to the bureaus until you’re 30 days past due, adds credit expert Gerri Detweiler. But don’t risk it. For all your bills, enter recurring

Missed a payment? Get back on track within the next 30 days, and you should “get back the lion’s share” of points lost, Ulzheimer says. More than 90 days late? The damage can stick for years. If it was a one-off lapse, call your issuer and plea for a good-will adjustment to your credit report. (It’s a long shot.)

Remember the Magic 20%. The second-biggest factor in your score is how much you owe vs. how much credit has been extended to you. The part of this that’s easiest to finesse is your credit card utilization rate, or your total card balances compared with your total credit limits, as well as each card’s balance relative to its limit.

Example: If you’ve charged $5,000 on cards and have $50,000 in credit, your rate is 10%. For the best score today, 10% is ideal, but you can probably creep up to 20% and keep a high rating.  Unfortunately, with banks lowering credit limits and canceling unused cards, it’s harder to maintain such a low percentage. In the previous example, if your available credit is cut to $20,000, your rate shoots to 25%. That could sink your sc

Already above 20%? Paying down debt is the obvious way to lower your utilization rate, but another strategy is to apply for an additional credit card to increase your overall credit limit. That may cause you to lose a few points in the short term — so don’t do it if you’re about to apply for a mortgage — but it should pay off in the long run.

Keep Oldest Cards in Play. As noted, credit issuers these days are eagerly canceling cards that are not in use. Besides reducing your limit and increasing your utilization ratio, having an account closed can hurt you in another way, especially if it’s among your older ones.

See, 15% of your score rides on the length of your credit history. The longer you ably manage revolving debt, the better you look. So don’t cancel your oldest cards. And don’t let them get canceled on you: Move a recurring charge to each so they stay active.

Accept Fate on the Rest. There are other factors involved in your score, but they’re not so easy to manipulate. For example, 10% is based on how well you manage a mix of credit types, such as mortgages, car loans, and credit cards. But you don’t want to go out and, say, finance a car just for a score boost; besides, you can easily get 750-plus with just a few well-tended credit cards.  Along the same lines, 10% is based on “new credit,” but the effects of a new application can be positive or negative, depending on your history. Read the original article online.> 

Credit Repair Articles, Credit Repair Tips, Credit Score Articles

A recent Bloomberg article considered the credit crunch and FICO scoring for credit reports from a different perspective.  They considered the credit cards of Wayne Brown and how if he reduced his credit card debt, American Express would cut his credit limit to the amount of the new balance. If he doesn’t make a big payment, his interest rate may skyrocket.  The credit limits on Brown’s cards have been lowered, which has raised his debt relative to his available credit. This so-called utilization rate is a key factor in determining credit scores  Brown, a 58-year-old construction-company owner in San Diego, has seen his score drop to 650 from 760 the past 13 months.  “Interest rates on all of my cards are going up now, and my minimum payments are almost doubling because it looks like I’ve maxed out my cards,” said Brown, who uses credit cards to fund his home-building company.

About 45 % of U.S. banks reduced credit limits for new or existing credit-card customers in the fourth quarter of 2008, according to a Federal Reserve January survey of senior loan officers. Financial institutions may slash $2 trillion in credit-card lines in the next 18 months, Meredith Whitney, a former Oppenheimer analyst, wrote in a Nov. 30 report.  “You’re no longer immune if you have good credit,” said Curtis Arnold, the founder of CardRatings.com, a Web site that reviews credit cards. “The issuers hold the cards, literally.”  Debt settlement and bankruptcy rates continue to soar as credit card defaults are rising like home loan foreclosures.

Credit-card issuers such as American Express, Citigroup and JPMorgan Chase have cut credit limits to guard against risk and prevent delinquency and charge-off rates from increasing, said Arnold.  The average charge-off rate, reflecting loans the banks don’t expect to be repaid, was 7.1% in January, compared with 4.6 % a year earlier, according to data compiled by Bloomberg.

If credit-card limits are decreased, consumers should pay off balances as quickly as possible  consider making online payments before the monthly statement arrives to reduce debt, and weigh transferring balances to a card with a lower rate, said Jeff Blyskal, a senior editor of Consumer Reports.  He said consumers should beware of low-intro rates and high fees when transferring balances.

Cardholders will damage their credit history if they cancel an older account and lose the available credit on that card, said Emily Peters, personal-finance expert at consumer Web site credit.com. Credit-score companies look at the total amount of debt relative to credit limits on all credit cards when evaluating scores.

American Express, the largest U.S. credit-card company by purchases, is offering $300 to some customers if they pay their balances in full by April 30 to reduce the risk of credit card defaults.  Chase increased the minimum payment to 5% from 2% for certain borrowers with large amounts of revolving debt. According to Bill Hardekopf, chief executive of LowCards.com, a Web site that compares the rates of almost 1,100 credit cards, Capital One increased the interest rates for new customers on 15 cards.

In 2008, Chase decreased credit lines or closed accounts totaling $129 billion, Gordon Smith, JPMorgan’s chief executive of card services, said last month. Home equity credit lines to new and existing customers were increased by $107 billion, Smith said.  Critz George, a retired nuclear engineer and physicist in Albuquerque, N.M., said he had three Chase cards and one Citibank card closed because of inactivity, without advance notice. George, 71, said he fears having four lines of credit closed will lower his credit score.  “I feel like it was an arbitrary and capricious decision because I have paid in full and on-time for the last 20 years,” he said.

Brown, who is also a mortgage broker, said he was always careful to keep his balance at one-third of the limit. He said the reduced credit limits on his American Express and Bank of America cards have made that impossible.  “I’m angry because I’ve always been proud of my credit history and now it’s gone to hell, not because of something I’ve done.”  Read complete credit crunch article >

Credit Repair Tips, Financial News American Express, charge-off rates, credit card debt, credit limits, delinquency, revolving debt

The original credit score company, FICO recently released an interesting report regarding credit lines and how cutting the limits can significant affect credit scores.  11% of the U.S. population, or 22 million consumers, lost some of their credit limits for a reason other than risky credit activity such as making payments late, having accounts go to collections, or having a negative public record added to their credit report during the study time frame. Credit card inactivity or low balances likely caused the lowered credit limits for this group. The median FICO score in this group is 770, so the adverse changes to their credit limits are not a result of poor credit risk.

5 % of the population, or 10 million consumers, saw their limits reduced because of some sort of risky credit activity including late payments, accounts in collections, or a negative public record added on their credit reports. Credit scores remained relatively stable during the April–October time frame, although there was significant score movement in 10% of the general population that received a credit limit decrease. A score decrease of at least 40 points occurred in 4% of that group and a score increase of at least 40 points occurred in 6% of that group. The score decrease is likely due in part to an increased credit utilization percentage, while the score increase is likely due to the reduction of credit card balances.

According to FICO credit card utilization remains a vital component in calculating your credit scores. FICO also stated in their recent report, that accessing credit may have “proven to be extremely predictive of potential repayment risk, so it is often an important factor in a person’s score… Consumers who use a heavy proportion of credit available to them are substantially more likely to default on credit obligations”, compared to people whose credit lines have hardly been used.

Also read credit line article > Thousands of Credit Card Consumers Report Credit Line Reductions in 2008.

As always, consumers will earn better scores if they make all of their payments on time; avoid other negative occurrences such as collections; keep their credit card balances low in proportion to their credit limits; and shop for credit only when necessary. The target utilization percentage is, and has been for some time, less than 10%.  Recent debt relief articles published highlighted the fact that the foreclosure crisis and credit card defaults have caused the credit repair business to experience considerable growth as a result.

Credit Repair Articles, Financial News credit card utilization, credit line, Credit repair, Credit scores, FICO score

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