Florida Mortgage Blog

The Exciting World of Credit Repair

10 August 2009 | Credit | Comments Off

Credit Repair Dispute Success

31 July 2009 | Credit | Comments Off

Quick and Easy Credit Repair Strategies for Everyone

Anyone Can Do It

Some credit repair strategies take time. Others require a precise knowledge of the law. But there are others that can be implemented quickly and easily by anyone. If you want to boost your scores there is nothing from stopping you from taking action today. Here are our all time favorite quick and easy credit repair strategies for everyone!

Pay Down Your Balances

Once upon a time it was enough to make your payments on time. This is no longer the case. The FICO credit scoring model is designed to predict the risk of lending money, and it places great weight on your credit card balances. If you run up your balances your credit score will be lowered as a warning to lenders that you may be a risky loan candidate. Depending on the overall content of your credit report your card balances can swing your scores by as much as 150 points.

Avoid Store Cards and Consumer Debt

Store cards and consumer debt, like furniture store loans, are of no positive value for your credit scores and may be a big negative depending on the age of the account and your balance. The FICO scoring model has a built-in bias against this type of debt; it is typically expensive and may come with risky terms like a delayed repayment plan. There may be worthwhile discounts offered with this type of debt, but while you are working on your credit repair plan it’s best to steer clear.

No Credit? Get Secured Cards

If you don’t have open accounts you will not reach your credit score goal. Many people starting a credit repair program find themselves in this position. Removing errors from your credit report will lift the weight that is holding down your scores. But this is not enough. You must have positive credit to get the increase you want. If you can’t get regular credit cards get secured cards. They are the perfect credit repair tool. If you are rebuilding your credit from scratch two secured cards could be worth 100 points within six months.

Try Authorized Credit Cards

If you have a friend or family member willing to help you get your credit repair effort started they could add you to one of their credit cards as an authorized user. This is not a long term alternative to building good credit of your own, but it can provide a wonderful score boost and help you get on your feet. The donor’s card must have an excellent payment history, be at least two years old, and have a reasonably low balance relative to the limit. When it shows up on your report you will inherit the score benefit of the card.

Time Your Credit Activity Right

All new credit activity, with the exception of authorized credit cards, will lower your scores initially. You may need to open new credit cards for your credit repair program, but be aware that the first few months they show up on your report your scores will drop. This is true of everything from inquiries to mortgages. The reason is simple. The FICO scoring model sees new accounts as untested debt and inquiries as a looming threat. If you are planning an important purchase in the future think of your credit today.

When in Doubt, Reach Out!

You are not alone. If you are confused, or just too busy to focus on improving your credit pick up the phone and call a reputable credit repair service. A professional credit repair service will examine your reports, identify your strengths, deficiencies, and score optimization opportunities. Your credit is too important to ignore. Become proactive and you will reach your goals before you know it! Good luck.

24 July 2009 | Credit | Comments Off

A Behind the Scenes Look at Credit Repair

Introduction

Credit repair involves more than disputing questionable issues with the credit bureaus. In fact, a one-sided, dispute only, approach to the process is pointless and may do more harm than good. To get the full potential from your credit repair effort you must have a working knowledge of the laws that rule each of the players in the reporting arena, as well as an in depth understanding of the method and purpose of the Fair Isaac credit scoring method. It is involved, but not impossible. Take your time and you will be thrilled with the results you will get.

Attitude Adjustment

If you are going to jump into the world of credit repair you better start with an attitude adjustment. Credit reports are not perfect. But it is not the fault of the credit bureaus, nor can the problems be pinned on the individual participants, although you may occasionally encounter an ill-intentioned party. Take the Zen road; it is what it is. You do not need to waste any energy getting flummoxed by the inequities of the system, just take a deep breath and take is as it is. Unless you are in a Don Quixote frame of mind you will do best to work with the system as it is. Learn the ropes, plan your work, and keep a cool head. You will prevail.

Look With New Eyes

Start your credit repair process with a critical look at your credit reports. Prepare yourself mentally to examine every single element. Don’t jump ahead to the derogatory section of the report. If you look carefully you will probably find some solid gold score moving errors in the shiny clean section of your reports. Proofread for credit card limits, the accuracy of open or closed status, balances on old paid off accounts, and duplicate accounts. All of these innocent looking errors matter. And if you find anything you don’t recognize, add it to your list. When in doubt, take it out.

Get out Your Reading Glasses

If you want to maximize the probability of getting rid of offending errors, and maybe even learn to spot problems that otherwise would have sailed under the radar, you need to read the Fair Credit Reporting Act. Don’t be daunted. Trust yourself to weed through the pointless fine print and spot the sections that will help your credit repair project. This is a case where you should move from screen to paper. Print away, then get a highlighter and color the parts that apply to your life. You will be surprised at what you discover. When you are done you will have the leverage to make the most of your dispute letters. You will also gain confidence and an understanding of the ways to effectively advance your case even if your dispute is not processed to your satisfaction the first time around.

Winning the Staring Contest

For many people undertaking the credit repair process collectors can present a troublesome reality. They are cantankerous and trained to be emotional terrorists. It’s just the way it is, so be prepared. Or, even better, educate yourself. Collectors have been known to walk the legal line. If you don’t know where the line is you could be victimized. Do your homework. Do you still have your reading glassed handy? The law is called the Fair Debt Collection Practices Act, and it is quite a bit more user friendly than the Fair Credit Reporting Act. Get your highlighter and color the good parts. The next time a collector comes calling you will be able to laugh in the face of danger.

Dazed and Confused?

Credit repair is altogether too important to put off. If you are befuddled don’t give up, pick up the phone. I recommend that you call a professional credit repair service. A professional service will do it all for you. You get them your reports and they will do the analysis, disputes, and debt validation, as well as advise you of your score optimization opportunities. Before you know it your credit will look great. Don’t worry; you can make it happen, just take that first step. Good luck!

17 July 2009 | Credit | Comments Off

Quick Credit Repair Techniques that Work!

9 July 2009 | Credit | Comments Off

Credit Repair Identity Issue Solutions

1 July 2009 | Credit | Comments Off

Choosing the Best Credit Repair Service

Introduction

Credit repair companies have a mixed reputation. Millions of people have experienced dramatic benefits from hiring professional services. On the other hand, many have been robbed, to put it bluntly. There are excellent reasons to hire a service, but you should know how to identify a good one and what tasks you should expect them to perform. Here are some key points that can help you choose a company that will deliver a positive experience.

Trust Yourself

Before selecting a credit repair company, pick up the phone and make a few calls. Most companies offer free initial consultations. Take advantage; this is your opportunity to make a careful and informed decision. Take some time before making your calls to think about your goals and issues. I suggest that you have a written list of questions in mind. Listen carefully to the company representative as they answer your questions. Are you comfortable? Trust yourself. If you are not happy with the conversation you should move on to another company.

Check the Better Business Bureau

Take a careful look at the Better Business Bureau records of the prospective companies on your list. A complaint or two should not rule anyone out, but a significant pattern of problems is a bad sign. You will also notice that complaints are categorized. If the majority of complaints are in a single category it may be an indication of the type of experience you will have. If the company offers a money back guarantee and you see complaints about their failure to refund money you might be right to question the integrity of the company.

Consider the Costs and Payment Options

Credit repair companies are governed by the Credit Repair Organizations Act (CROA), which is very specific about allowable fee structures. Credit repair companies are only allowed to charge after work has been performed. This is not to say that the entire process must be complete before they require payment. A typical and very compliant approach to billing is to charge a setup fee after the initial setup and consultation is complete, and then to bill monthly at the end of each month of service. Up- front fees are not allowed, so if you are asked to pay for the entire program in advance you should reconsider using that company.

Longevity Matters

There may be some very good new companies in the business, but unless you are very comfortable with their presentation and credentials you might be headed for a poor experience. Successful credit repair requires experience. There is quite a bit involved. On one hand, the effectiveness of the program depends on the company’s ability to deal with the credit bureaus, collectors, and creditors. Time brings finesse, and finesse brings results. In addition, over the years we have heard of many credit repair companies collapsing from their own inability to manage the work flow. Credit repair requires a unique ability to organize, track, and respond to correspondence. There is no substitute for experience.

The Breadth of Service

It is essential to choose a credit repair company that does more than send out letters to the credit bureaus on your behalf each month. The range of services that are needed to produce the best results include help in building new credit, debt validation services for those with active collections, statute of limitation research, the ability to escalate a dispute to a creditor level if appropriate, and FICO score optimization counseling. There are many credit repair services that are entirely software oriented and do nothing beyond sending letters. These services are fine for someone who is fully versed in all aspects of credit repair and only wants help sending letters to the bureaus, but if you want more comprehensive help you should look elsewhere.

19 June 2009 | Credit | Comments Off

Six Super Credit Repair Tips

18 June 2009 | Credit | Comments Off

Credit Repair, Expectations, and Reality

Introduction

Credit repair can produce dramatic results, potentially transforming the appearance of your credit reports and boosting your credit scores. Credit repair may even deliver major results in a reasonably short period of time. But it is not a magic cure for your credit woes; you will need to do some work. It is important at the outset of a credit repair effort to have a realistic perspective. But don’t lower your expectations; just make the effort needed to produce genuinely awesome results.

Organizing Your Effort

There are three things you must do to insure that you credit repair project yields the best possible results. You must get control of your existing obligations by building a realistic and practical budget. You must learn how to manage your account balances properly to fully optimize your credit scores. And you must learn the effect each type of credit can have on your credit scores. And there is more to this than meets the eye. Mastering the subtle details can make a world of difference in your credit scores, so let’s get to work.

Making a Budget Work for You

Don’t be afraid of creating a budget. Having a budget does not mean that you must embrace a self-imposed austerity plan. Creating a budget is an information gathering process. The more you know about your finances the better off you will be. When the time comes to make a decision that will affect your monthly cash flow it should be made in the context of good information. Too many financial errors have occurred simply because of a lack of information. You are going to be work hard on your credit repair project. You can’t afford to fly blind.

Get a pad of paper and list everything that you spend money on. Take your time and make sure that you have included everything from the big monthly obligations to your daily incidentals. Don’t forget an item because it occurs only occasionally, like an annual vacation. Just estimate the total amount you will need and divide it by twelve to determine the amount you should set aside each month. The goal of this exercise is to get a complete picture of your expenses. For your long term credit repair success you must be able to live within your means.

Your Balances and Your Credit Scores

There was a time when you would have great credit if you paid your bills on time. This is not longer enough. You can make your payments on time for years and still have terrible credit scores if you don’t manage your revolving balances properly. For credit repair results you must understand the relationship between your balances and your credit scores. The FICO scoring model grades you on the amount of available credit that you use. The relationship between an account balance and its limit is called the balance to limit ratio.

For the best possible credit score you should reduce your balances so that you are using less than 20 percent of the available credit line. Specifically, the FICO model recognizes balance to limit ratios in 20 percent increments; 20, 40, 60, 80, and 100 percent. The lower the balance, the higher your score will be. Don’t underestimate this. You could lose over 100 points by running up a revolving balance to the limit.

Using the Right Kind of Credit

When it comes to credit repair there are big differences in the type of credit you use. The FICO scoring model likes some credit types, but will penalize you for others. If you want to improve your credit scores you should use mainstream credit cards like MasterCard, Visa, American Express, and Discover. And you must avoid consumer credit, including store cards and the type of financing offered by furniture and electronics stores.

This type of debt is useless for credit repair success, and can even drag your scores down. There are a variety of reasons for the way FICO treats consumer debt; it typically comes with poor terms and high rates. It may also come with an attractive, but dangerous no-payment option which will mature into an unwieldy repayment plan. Still, this type of debt can be convenient, so use it if you wish, but pay it off when you need your credit scores to be at their best. Good luck with your credit repair!

17 June 2009 | Credit | No Comments

Credit Repair Can Save You From Collectors

Using Credit Repair Properly

Credit repair is about more than just disputing questionable derogatory data with the credit bureaus. A truly effective credit repair service will incorporate appropriate use of all available legal leverage to protect your rights. Collectors, as a group, are particularly troubling, both as data furnishers to the credit bureaus, and in their own right as regards the accuracy of their own information management. If you have a collection on your credit report, or are contacted by a collector, there are a couple of powerful credit repair tools you can use to level the playing field, and maybe even make those collections disappear.

Collectors and the Credit Bureaus

Collectors buy and sell debt. It is not unusual for a single account to change hands four or five times in its lifetime. This is problematic from a credit repair perspective because the probability of reporting errors increases dramatically as the account moves from owner to owner, each of whom may report anew. And of course, it is because of the potential for error that credit repair is a necessity. By law, collectors are supposed to withdraw the reporting of an account upon its sale. This means that you should never have more than one collection for the same debt. If you review your credit report and discover that you have redundant collections you have a credit repair opportunity.

Collectors and You

If you get a collection letter in the mail you need to take action quickly, or if you are a member of a good credit repair service, you need to send them the notice so they can take action on your behalf. The operative law is called the Fair Debt Collection Practices Act (FDCPA) and it requires collectors to provide substantive documentation to prove that they have the legal right to collect, and an accounting of the amount claimed. Specifically they must provide you with this information if you request it within 30 days of receiving the collection notice. If the collector cannot provide the information required they are not allowed to continue their collection efforts, and if they have already reported to the bureaus they must stop reporting.

Credit Repair and Debt Validation

As mentioned, the process of requesting supporting documentation from a collector is called debt validation and must be done in writing. Like all credit repair communications it is best to keep it simple. The collector does not want to hear your story. Just ask them to validate the debt. You may specifically request proof that they currently own or have the right to collect the debt, a copy of your original account agreement, or some signed proof of your liability, and an accounting of the amount claimed due. Collectors do not have a specific amount of time to satisfy your request. If they don’t validate the debt, you win; they should disappear from your life. If they do validate the debt, you still win; now you have all the facts and are almost in a position to make an appropriate decision. But before you do anything else you must check the statute of limitation.

The Statute of Limitation Solution

The final credit repair tool that you must have in your arsenal before paying or negotiating a valid debt with a collector is the statute of limitation (SOL). The SOL is the length of time that a collector can use the court to enforce the collection of a debt. Or, in plain English, it is the length of time that they can sue you. In practice, they might sue you after the SOL has expired, but if you show up at court and claim your SOL defense the case will be dismissed. Statutes of limitation are specific to both debt type and state. SOL charts are easily found on the web. You will be happy to discover that SOLs are almost always far less than the reporting period limit. If the debt is past the SOL, and you inform the collector that you are aware of the fact, they should be very willing to negotiate. For credit repair purposes you might even try to negotiate for them to remove the account from your report; always a nice touch! Good luck!

16 June 2009 | Credit | No Comments

Earlier Posts

Navigation

Pages

Categories

Archives

Meta

The Exciting World of Credit Repair

Credit Repair Dispute Success

Quick and Easy Credit Repair Strategies for Everyone

A Behind the Scenes Look at Credit Repair

Quick Credit Repair Techniques that Work!

Credit Repair Identity Issue Solutions

Choosing the Best Credit Repair Service

Six Super Credit Repair Tips

Credit Repair, Expectations, and Reality

Credit Repair Can Save You From Collectors