Credit Repair Blog

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.

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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.

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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.

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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.

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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.

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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.

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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.> 

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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 >

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As a full-service lead generator, the Lead Planet provides credit repair leads, as well as debt leads, mortgage leads and loan modification leads for sales companies nationally.  Choose from internet leads, with live transfer lead options that are guaranteed to increase your conversion ratios.

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Modifying mortgages to make them more affordable for struggling borrowers is a cornerstone of the Obama administration’s housing rescue plan. It allocates $75 billion for an initiative that would reward loan servicers for lowering mortgage payments for five years, after which they would rise to today’s current mortgage interest rates which, fortuitously, are in the low 5% range.

By now, most homeowners understand that a foreclosure judgment is a “significant ding” that will reflect in the credit score and perception of manual underwriting for many years to come.  Being late on your mortgage payments is a serious issue, but if you or your loan modification company are already negotiating with your lender, it certainly doesn’t hurt to attempt to get the lender to remove the delinquencies. It’s amazing how powerful a letter from the creditor says that they “made an error in reporting.”  But several readers recently wrote to Lisa Sitkin, in an effort to get clarification on the impact of loan modification and the long standing credit implications.  If the lender doesn’t agree, consider credit repair. 

Lisa Sitkin, a staff attorney with Housing & Economic Rights Advocates in Oakland, was kind enough to take a crack at answering that question. Here’s what she wrote:  Our view is that a loan modification that included a principal reduction might be reported as a write-off of some sort. Home loan modifications without a principal reduction (which will be the case in most borrower’s loan workouts) should not be reportable, but that is not a guarantee it won’t be. Credit reporting is something borrowers should be asking servicers about as they discuss lower mortgage rates. They should also request that prior past-due derogatory comments on the credit reports be changed to reflect new current status after the mortgage loan modification.

Sitkin suggests checking with an attorney with debt collection and/or fair credit reporting expertise for more insight on this issue; there is an attorney directory on Naca.net.  See the full article >

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