Archive for the ‘Credit Repair’ category

« Older Entries

Foreclosure Tactics of Banks – Don’t Be Intimidated

May 5th, 2010

I try to publish accurate, helpful advice here on this blog.  If you have a question or a problem or don't agree, then post a comment or contact us with the Contact Us page. I'm not trying to scam anyone or do anything that would make you lose even more money than you already have. 

And specifically, with personal experience, it's not always going to match what your experience is, so it is helpful to get others' comments and ideas about their own situations.  Today for example, plenty of people are going through foreclosure. I also lost my home right after filing for bankruptcy. I posted already about my bankruptcy, which I should not have filed.  Then I lost my job, and my efforts to keep my home were fruitless. The banks refused to work with me (this was 4 years ago before they faced so many delinquencies).  I tried to get them to agree to a short sale, but they refused – the second lien holder absolutely refused, despite the fact that they would get nothing when the house got foreclosed.  It was spite and nothing more – PNC Bank was not going to help me get out of this with a short sale instead of a full blown foreclosure. They got nothing in the deal.

My home was in a nice area, with two mortgages that totalled more than 100% of the value – and the banks knew it when they lent it to me. I also knew they were over inflating the price when they told me what it was "worth" so they could lend me 80% of that number. But I wanted to money.  But once I lost my job, there was no way to cover the high payments.

So what would I have done differently? The bank kept pushing my sheriff's sale date back. This hurt me because it was another year before the home got sold – and that meant another year before I could qualify for another mortgage.  They kept changing the date so they could keep adding the carrying costs onto the sale that added up when they changed the date!  It wasn't until I threatened legal action that they sold my house (can you imagine – I had to threaten to sue so that they WOULD sell my house!?)  The banks play any number of games to get more money into their own pockets. Consumers just don't know the ropes, can't afford high-priced lawyers to help them, and the banks know it.

So while it took a year to sell from the original sale date, I didn't know they'd push the date back repeatedly, and I moved – and incurred rent right away.  I could have lived in the home for free all that time – and today with what I know, that's what I'd do if it ever happened again.  For anyone trying to deal with a bank in a foreclosure, stand up and fight – you still have rights even though you owe them money. Bankruptcy can help, because it will stop a sale, and possible help you work out a payment plan if you have regular income.  Try to get your loan modified, and if the bank won't talk to you, call your Congressional representative your state representatives, anyone you can.  Be a squeaky wheel, and don't get taken advantage of in this process.


1 comment »

Posted in Credit Repair

Tags:

Why I Should Have Avoided Bankruptcy

May 5th, 2010

I am writing here about bad credit, because I have been through the process and through the system, including bankruptcy, and I have bad credit now, but my credit was worse.  I've done everything I can to bring up credit scores, and for me, this happened before the bulk of Americans today fell short on their mortgages or lost their jobs. So, I figure I'm about three years ahead of the curve and I hope people can learn something here.

Also, I'm a lawyer. I'm not a bankruptcy lawyer or credit lawyer, but I understand the law, and still I made mistakes I can't believe I mad.  I can swim through rules and regulations and legalese, but still I messed up – so I can't help but assume there are many many people out there who are completely confused about what they should do, and don't know where to go for help. If a lawyer can't figure it all out perfectly, probably no one can.

It started when I declared bankruptcy; this was a mistake.  I had a lot of debt,but student loans I couldn't discharge, and I wanted to keep my house. (which in the end was unsuccessful).  I filed for bankruptcy before the laws changed so I could discharge everything – but I'm sorry I did.  A year later I lost my job and my house; I could have tried to be on a payment plan, or something besides having the bankruptcy on my credit report.  

My feeling about it is, even if I had been seriously delinquent, I did have some alternatives to  bankruptcy.  I could have made some kind of small payments until I got another job (which too my 9 months). But having that bankruptcy is a HUGE red flag – even though my credit score is creeping back up, slowly, lenders see that bankruptcy and today they just say no.

Right now, I could have gotten my past due debts paid up, and had a shot at borrowing for big things like a car or house. Today, I can't, not for a few more years.  And paying cash is tough, but I did learn my lesson. I keep no credit cards now, am paying off my existing car loan and student loans, and swearing I will from now on deal in cash, even if it means driving a crappy car or not taking the vacations I dream of.  At least I owe no one, and can even save a little today.

The point is, before I declared personal bankruptcy, I didn't really understand what it would mean afterward. My bankruptcy lawyer did not explain enough about the ramifications of having this on my credit report; he did say that about half my debt I'd still have afterward, but I didn't listen. So, if you are thinking about bankruptcy, think twice.  Figure out if there is any real reason to file, because you can just be late on payments and catch up when you can, you don't have to ruin your credit for ten years, and it will be easier to get back on track if you avoid bankruptcy altogether.


No comments »

Posted in Credit Repair

Tags:

Tips To Get Debt Help Online

May 2nd, 2010

One way to improve your credit score and work toward consolidating debt, and that means getting a debt consolidation loan.  Searching the Internet can give you several options. If you've been considering the steps of getting a debt consolidation loan, versus choosing a debt management or debt settlement service, you sholud know the main differences, pros and cons of each so that the option you select is the right one for your needs.  It's understandable that many people get confused about these three different options, but they eahc have specific differences and ways to help individuals pay down debt. Here's a look at each.

Debt Consolidation Loan

A debt consolidation loan will transfer your credit card or other revolving debt to a single, lower interest rate loan. You can find lenders by searching online; start with your own bank, then check services like Lending Tree.  Usually, this type of loan is similar to ahome equity loan, in that the equity  you have in your home will be the collateral for this type of debt. Today, it's more difficult to get a loan based on home equty, due to the instability of home prices, however it's still possible if you have equity in your home. For people with good credit, it might even be possible to get an unsecured loan, if you also close the credit cards.  If your credit is not so good, the lender may ask you to close your cards as a condition of the loan.  when you get a consolidation loan that has a lower interest rate, theoretically your payments will go down and you can afford them better each month.  Be sure though that the length of the loan doesn't mean you are stil paying a ton of money in interest over the life of the loan, and be sure to pay the loan off you will actually be able to afford to pay on the principle and that will help you to eventually get yourself out of debt.

Debt Management

A debt management company is a little different from a lender. They work with debtors to build a plan to get control over their debt and other finances. These types of companies show borrower the way to set up a budget and keep to it each month.  Often, the borrower will create a weekly schedule to show when to pay each of their debts, until they are paid off.  Usually, debt management companies are set up as non profit companies, and their purpose is to work with consumers to get them on the right financial track. you wont' find these companies offering any loan products, and they usually don't work with creditors either to reduce debt. But they will work with individuals to give them the right tools to build a secure financial future.

Debt Settlement

Unlike lenders or debt management companies, debt settlement companies will directly contact your creditors about your credit accounts. There are agencies like Consumer Credit dounseling Service which you can find online at locations near you.  These copmanies will work to negotiate with your current credit card companies and attempt to reduce the balances you currently owe. They are able too work out arrangements that can lower your interest rates, or get a reduction of the penalties and late payment fees that are piling up on your accounts.  They may also be able to reduce the balances you owe the credit card companies. Many times their arrangement with you will require that you send them a single payment, and they disribute the payments to the companies you are paying. this makes it easy to budget.  beware however that this service may have consequences on your credit report, as it will be reported to the credit reporting agencies that you are working with a debt settelment company.

Any of these types of copmanies can be found online with a simple search, be sure to include your location in your search to find companies near you. It's best to find a company online, but visit them in person – don't work with agencies online only, as this is a potential way to get taken advantage of. You want to meet these companies face to face, and get references for the work they do.  Once you find a good company, these services can certainly provide the debt help you need.


No comments »

Posted in Credit Repair

Tags:

Credit Repair Secrets of the Ultra Wealthy

April 28th, 2010

You don’t need a credit repair guide to reveal credit repair secrets to you. The majority of details surrounding how your credit score is determined is fairly straight forward. If you just remember that the credit score is a measure of how safe you are to the lender, you just need to think like a lender to improve your score.

Credit Repair Secrets #1 – Credit Issues are Time Weighted

What you are doing with your credit today is of much more concern to lenders than what you did in the past. In fact the credit reports don’t even look back further than seven years. However, going back that far isn’t that important. You need to take care of the here and now first. If there is any debt you are currently past due on, you need to clear that up first and get all of your account balances current as soon as possible.

Credit Repair Secrets #2 – Your Income Has No Bearing on Your Credit Score

Some of the credit repair tips you’ll read online or elsewhere would have you believe that factors like income or even gender, race, or location have any bearing on your credit score. This is absolutely not true, in fact it is illegal. Individual lenders may put this in consideration with your credit score, but your credit report by itself does not track these factors in any way. Making more money is only good if you’re using the extra money to pay down debt.

Credit Repair Secrets #3 – Applying for More Credit Doesn’t Help Your Score

A few credit repair guides will say the best credit repair secrets involve applying for lots of credit to increase your overall available credit, since having more credit would reducing your debt to available credit ratio. This is not an accurate tip anymore because now the rating agencies will put a high weighting on any new credit request. Also, any individual who has a house or large car purchase will have so much in fixed debt, that any additional revolving credit increase won’t change the percentage that much after all.

Credit Repair Secrets #4 – Default on Loans to Settle with Them

This is one step that many credit repair services companies use. They tell you to default on your loans, so that once you are seriously past due, it easier for them to settle with the creditors. After you settle, theoretically, your debt will show paid as agreed on your credit report. This is a very dangerous idea, and will cause long term damage to your credit report. Lenders do not approve of this type of action, and remember, anything the lender hates is bad for your credit score.


1 comment »

Posted in Credit Repair

Tags:

Top Ways You Can Clean Credit Legally

April 16th, 2010

If you have poor credit, you’re likely to see promotions for services to clean credit fast, that sometimes include scams such as cleaning up or erasing your credit in just thirty days. The scam is usually something similar to disputing a valid negative entry on your credit report, and if a creditor does not respond to your dispute within thirty days, the credit reporting agency (CRA) has to remove it from your credit report. The problem with this is that this scam is so widespread now, that any creditor will always respond to your dispute right away. So, this scam does not work as effectively as it might have a few years ago.

Another credit repair scam is to set up an Employer Identification Number (EIN) which is like a social security number for business. You then use that EIN for all of your future credit needs, so that it looks like you have clean credit. This is completely illegal use of an EIN, because it constitutes fraud and misrepresentation when you apply for credit and do not give your correct social security number. It also does not absolve you of any of the debt obligations you have legitimately assumed in the past.

There is only one way to clean credit legally – pay your debt on time. This doesn’t mean you shouldn’t clean up errors on your credit report, and they do happen. For example, payments you’ve made accidentally do not show up on your credit report; this needs to be addressed with either with the creditor or the CRA. Or, you may have a legitimate dispute about a medical bill, but because it takes several months, the medical service sends the bill to collections, and that appears on your bill. This is the kind of debt you must have removed, and which a creditor should remove, right away.

For legitimate ways to clean up your credit, there are basic steps you can take, but ultimately it boils down to just pay on time, don’t go over limit, don’t pay late, and pay down any past due balances. Doing this, over time, will clean up your credit fast.


No comments »

Posted in Credit Repair

Tags:

How Long Does It Take To Repair Credit?

April 16th, 2010

It can be so frustrating: trying to repair bad credit, especially after the recent economic downturn.  Credit card companies changing the rules on borrowers so that credit scores have been impacted across the board.  Hikes in interest rates to ridiculous levels has also meant it’s that much harder to pay the monthly bill, and millions of people are falling behind.  Add to this the major job loss around the country, and Americans who lived on credit are finding that suddenly they are unable to pay their bills.

When you need or want to buy, however, we’ve learned to buy with credit, so repairing credit becomes a major concern, so that you can qualify again for more credit to buy more stuff.  Yet there are no shortcuts to credit repair.  The only way to make it happen is to pay down debt, pay on time, and wait for the months it will take for your credit score to improve.

When you have a lot of debt, and are near your credit limits, you can improve your credit score by paying down the balances.  You might even consolidate some cards, by moving balances over to lower rates cards, and closing one or two.  Paying down balances takes thirty or sixty days to be reflected on your account, and show up in your credit score.  But unless you lower your balances to under 50% of the total credit line, you won’t see a major impact, maybe a few points.  If you can lower your balances to below 50% of the credit limit, then you can raise your score higher.

Having too much credit available can also hurt your score. Try to close a couple accounts.  Closing all of your credit will make your score go down, but try to limit your cards to just a few.  This change can also help your score in a few months.

Fix items on your credit report that are incorrect. If there are collections on your credit report for example, that shouldn’t be there, or other errors, these can be fixed fairly quickly, as Federal law requires that the creditor respond within thirty days.  The credit reporting agency will make the changes quickly as well, so sixty days is not unusual for these improvements to show up on your credit report.

If you’re wondering how long does it take for credit to clear without a bankruptcy, it’s not unusual to see credit improvements in just a few months, after you start paying on time, and bring your balances down somewhat.  However, if you continue to pay late, you will have a lower credit score.  Even if you pay on time for two years, just one thirty day late payment will impact your score negatively all over again.  You have to get in the habit of paying everything on time, for at least several months to a year, and two years is better. Use this time to practice not using credit for purchases, but building a new habit of paying cash.  pay down your credit, get used to using cash, and soon you’ll find you have high credit scores once more.


No comments »

Posted in Credit Repair

Tags:

What Does Your Credit Score Range Say About You?

February 22nd, 2010

The FICO credit score range is a summary of how you handled your credit over the last seven years. Over time companies have used statistics to estimate how people will handle their credit under different credit score ranges to determine what interest rates they would have to charge to make the loan worth the risk.

What is A Good Credit Score?

Well the perfect credit score range is 760 to 850. You won’t see many differences in offers anywhere in that range, but you’ll love every offer you see. To achieve this range you must never (in the last 7 years) ever miss a payment, use credit but pay it in full every month, and have been doing that consistently. Essentially you’re screaming to creditors “I love credit and will play your game exactly how you want me to.”

For the rest of us a good credit score range is anything north of 650. You see a significant drop in interest rates at this point.

Why the Huge Swings in Interest Rates?

The interest rates are the primary tool in battling delinquency rates. The more likely someone is to default on their loan the more you have to charge everyone similar to them to still earn your profit while writing off the bad debt. Here are the primary credit score ranges and their estimated current 30 year mortgage rates.  (If you have a low credit score, you might consider taking some credit restoration steps to clean things up before applying.)

  • Less than 500 (89% delinquent): Not Available
  • 500 to 549 (70% delinquent): Not Available
  • 550 to 599 (51% delinquent): Not Available
  • 600 to 649 (31% delinquent): 6.23% maybe
  • 650 to 699 (14% delinquent): 5.5%
  • 700 to 749 (5% delinquent): 4.9%
  • 750 to 799 (2% delinquent): 4.6%
  • 800+ (1% delinquent): 4.6%

The same credit score ranges on a car loan are even more frightening. The people who need the help getting a car loan the worse (because they really need to keep their job) are the same people getting gouged for the loan. Here are credit score ranges for a 48 month car loan and their corresponding interest rates.

  • Less than 500: Not Available
  • 500 to 549: 21%
  • 550 to 599: 20%
  • 600 to 649: 15%
  • 650 to 699: 10%
  • 700 to 749: 8%
  • 750 to 799: 6%
  • 800+ : 6%

Before getting a loan check out which credit score range you are in and see if there is anything you can do before getting the loan to push you into the next bracket.


No comments »

Posted in Credit Repair, credit score range

Tags:

Are There Mortgage Bad Credit No Down Payment Products?

February 1st, 2010
This economy has changed a lot of things about the landscape of American lending and credit. One of the items that has been dropped like a hot potato are mortgage bad credit no down payment loans, where individuals with bad credit can get 100% financing.  The main reason for this is that these products are one of the causes of the economic meltdown – or rather, the writing of these products by banks, then the banks' sale of these product broken up into loan packages called CDOs.  As jobs were lost and home fprices fell, so did the likelihood that these loans would be repaid – so banks have run as fast as possible away from offering these types of loans.
 
But what is a person with bad credit supposed to do? Everyone needs shelter. If you ave bad credit, and it's seriously bad say under 600, and you have no down payment, then realistically, you should be looking at renting at an affordable rate, and trying to save money.  Banks will just not want to work with you, and the FHA, which guarnatees 95% of the loans in the United States, suggests a credit score of 640 as the bottom score for which you can qualify for a mortgage.
 
It's especially hard to find loans because no one is sure whether home prices will stabilize or go down. So, if you buy a home today with 100% financing, and the price of the home drops, you aren't the one losing equity – the lender and the government are.  So lenders do not want to take the risk of taking back a home that isn't worth what they lent.
 
Does that mean you can't buy a house with bad credit? No. If you can get your redit score up to the 640 range, which is still considered bad credit, you can qualify for a first-time loan (if you have never had a mortgage, or haven't had one in the past 3 years). As a "first time" homebuyer, you can buy a home with 3.5% down.  There will also be closing costs and fees, but if you can meet that bare minimum standard, which is still bad credit, you can get a home for almost no money down. 
 
Be sure that if and when you do buy, you can afford it though – today, you can probably rent more house that you can buy for the same monthly payment. Make sure you do what's right fo ryou financially, and avoid continued habits – like borrowing no money down – which keep you in financial difficulties into the future!

No comments »

Posted in Credit Repair

Tags:

The Easiest Credit Report Repair Steps

January 27th, 2010

Things are happening in this economy that are going to impact many people’s credit scores whether they like it or not. Specifically, the banks are reducing credit card limits, raising interest rates, and changing payment terms so that monthly payments are larger than ever before. On top of this, people are losing jobs, or suffering under health care difficulties, so credit scores for many are also taking a hit. Credit report repair does take some time, as there are really no quick fixes (despite what scammers might tell you). However, if you follow some simple steps for at least a few months, you can start to see improved credit score within as little as two or three months.

Late payments are likely the main reason your credit is poor. So first, you have to make a committment to pay all of your debts on time. If you’re not able to make the minimum payments on everything by their due date, you should try to earn some extra income to get additiona funds to bring your debts current. Otherwise, you will need to use debt negotiation efforts with your creditors to arrange payments that will work for you. Until your debt is current, your credit score will not improve.

Something else which is also often overlooked are errors on your credit report. You should get rid of any errors that lower your score, for example incorrect collections records, someone else’s credit (sometimes relatives can show up on your report) and other mistakes. Once these get fixed, it can have an almost immediate impact on your credit.

Once you get your payments all up to date, and you’re sure your credit report has no errors, you can start to reduce your debt balances. One item that contributes to bad credit is having too many cards open, with high balances on all of them. Start by paying more than the minimum monthly payment on the card with the lowest balance. This will save you interest payments, and also get it paid off faster. Then take that total monthly payment you were paying on that card, and apply it to the card with the next lowest balance. This is called a “debt snowball” and will help you reduce your debt faster than if you paid the minimums, improve your credit and save a bundle in interest payments over time.

These are the two basic simple steps toward credit report repair that you can start today. By sticking to making payments on time on a regular basis, your credit score will begin to improve without a doubt.


No comments »

Posted in Credit Repair, Credit Report, credit help, credit repair help

Tags:

Where To Turn For Credit Repair Help

January 21st, 2010

Where do you turn when you’re desperately in need of credit repair help? Well right here at Credit Help Online of course! Seriously, the credit repair tips you need to get started are not that complicated. The worst part of having credit trouble is feeling as though there is no light at the end of the tunnel. Well, we’re here to tell you that there is, we have been through it all, and it might take time and patience, but any credit problem can be solved.

There are plenty of credit repair agencies who will offer to help you, but the fact is, you can do most if not all of it yourself. Except for a severe case, where you seriously should consider filing for bankruptcy, the steps are the same whether you do it or you hire someone to do it. If it’s going to cost you fees or time sitting in a classroom, you might want to give it a try on your own first.

We have several posts on this website that describe how to get started with repairing your credit, so we’re not going to list all of those ideas again here. But the most important thing you’ll need, not on those lists, is a change in attitude. You are having credit problems for a reason – like most Americans, you probably have used credit as another source of income, except it’s not income, it’s debt. You owe someone else, and they can take it back from you, whether through legal action, repossession or otherwise. The first step is to realize that you must live within your means. There is no other way to have a secure financial present or future.

To live within your means, you need to know how much you have coming in, and how much you have going out for expenses. To the extent you have too much going out, that it, spending too much, you need to put the brakes on, and either save that money, or redirect it to paying off debt you have already. We all spend money we don’t even think about – and that’s the second step, to stop spending without thinking about it. You should prepare a budget, which is not rocket science after all, and then stick to it. It might take you three or four months, but by making a commitment to never be in debt again, and stop struggling financially, you can do it.

So credit repair help is best when it comes from you – because you are the only one who really has a stake in fixing your own credit. And you can see all the credit repair agencies you want, if you don’t learn how to stop overspending, you’ll just find yourself in the same boat, all over again. (Believe me, we’ve been there too – making the same insane mistakes twice!) The best help is to decide once and for all you are not going to spend more than you make, and then take that next step to determine that you will know, absolutely, where you spend all of your money.

Now, the only way to know where you spend your money is to do that budget. We have a free budget form right here. It is actually very simple. You have a list of the things you need to pay for this month, starting with the items you must have, like food, shelter, heat and water, and transportation to work. (Notice I didn’t say, “luxury transportation to work”.) After that, you can list the items that are “discretionary”, meaning you can choose not to buy them in any given month. Once you know what you must spend money on, as opposed to what you want to spend on, you are on your way.

This will also tell you if you have obligations, beyond the necessities, such as credit card or loan payments, which take you above and beyond your monthly income. If you have credit payments that you can’t afford, then you REALLY need a budget! And you also need to check out the section of this blog that talks more about how to negotiate debt with your creditors.

These credit repair help ideas will get you started on your way. Have patience, promise yourself that you will make this financial change in your life, and it will impact your wealth for a lifetime.


2 comments »

Posted in Credit Repair, credit help

Tags: