July 17th, 2008
Q:
Is there a difference with respect to a credit score between a house going into foreclosure and a house actually being foreclosed upon? The situation is this. House goes into default and is scheduled for foreclosure sale. Is one’s credit going to be damaged worse if the foreclosure sale occurs? Will one’s credit be better if they are able to pay off the entire loan without incurring additional debt prior to the bank redeeming the property at the foreclosure sale? I realize that there is a negative impact because of the late payments and the foreclosure process being commenced, is that as bad as it gets or does further negative impact result after the redemption? Stated another way, does paying the entire balance off prior to the foreclosure and redemption by the bank improve one’s credit in any way, or at least prevent it from getting worse?
Thank you for your help.
Todd S. Rayan
A:
Hi Todd,
This is a great question. Once you start being late on a mortgage payment the damage is already done to your credit score. I have not seen a difference in credit scores whether you foreclose or if a possible sale takes place before an actual foreclosure. But your creditworthiness to get future mortgage loans is affected if the home actually forecloses. If your home forecloses it will be a minimum of 3 years from foreclosure date before you can buy again. If foreclosure proceedings have started, in the eyes of some lenders this is considered a foreclosure anyways. HUD also says that if foreclosure proceedings have started and you have 120 mortgage late payments on your credit report, it’s counted as a foreclosure. In my professional opinion its better to sell before you foreclose on your home. It just looks better. It does not really matter which happens as far as your credit score is concerned because the damage is already done due to all the late payments.
CreditScoreQuick.com
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July 16th, 2008
Do you know how easy it is to type a wrong letter or number? Do you know that people doing data entry at huge corporations aren’t as interested in working error-free as you might wish they were? The combination can be deadly to your credit.
That’s why, when you get your credit report, you must take the time to read and understand each entry. Your report could include accounts you’ve never had, accounts you’ve paid in full, and old information that should have been removed. All of these errors can and will affect your credit score.
Certain kinds of information should be removed after 7 years – this includes lawsuits, judgments, paid tax liens, accounts dispatched for collection, late payments, and even child support. And yet, even though this information should have automatically fallen from your record, it doesn’t always happen. You need to take responsibility for knowing what’s on your report, and getting it changed if it’s wrong.
Be sure to check your Social Security number, your name, address, phone number, and information concerning your occupation. Errors here could signal identity theft, or could just be errors. But the last thing you want on your credit report is someone else’s debt, just because their Social Security number is one digit different from your own (and incorrectly entered as yours) or because they share your name.
Correcting errors and removing outdated information can have an immediate and positive impact on your credit score. And since that can have a huge impact on the interest rates you pay, it’s well worth your time to get it corrected.
You simply fill out a request for reinvestigation, or write a letter to the credit reporting agency that listed the incorrect information. As carefully and accurately as possible, list every inaccurate piece of data and describe why it is incorrect. Do the same with each outdated item.
Don’t be rude or blame the credit reporting agency – they only report on information given to them by your creditors. So even while a data entry error may be theirs, you’ll gain faster, more cheerful cooperation when you’re simply factual. Once they receive your request, they’ll investigate the items you listed and contact you within 30 days to notify you of changes. If you’re in a hurry to qualify for a loan, the process can be expedited through a “Rapid Rescore.”
Credit scores are re-figured every 30 days, so be sure to check your reports each time they come in. Catching an error immediately could save you weeks of hassle and untold dollars if that error signals a case of identity theft!
CreditScoreQuick.com
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July 16th, 2008
Everything you do in life adds to your reputation – and your finances are no exception. The difference is, instead of word of mouth among your peers and business contacts, your credit score is recorded in black and white for any potential creditor, landlord, employer, or insurer to access.
That’s why it’s important to protect it, and to keep it accurate.
Your credit score tells everyone how you’ve handled your finances for at least the past 7 years. The better you’ve done with paying bills on time, and the lower your debt level in relationship to your income, the better score you’ll have.
The better score you have, the better for you when you want to borrow money. Higher scores get you lower interest rates, longer pay-off periods, lower fees, and less paperwork when attempting to get a loan.
Low scoring applicants are often rejected completely, or offered high interest rates, high minimum payments, and more fees. Why? Because they’re considered a poor risk. Creditors get all they can up front because they know that a person with a low score is more apt to default on the loan.
What’s a good score? Scores range from a low of 300 to a high of 900. 650 or higher is a good score and will usually earn you the best terms when applying for a loan. 620-650 is still considered “pretty good” and indicates a few minor problems with your credit history. You’ll get a little higher interest, but not too bad. Scoring under 620 puts you into the risk category, and the lower it gets, the bigger the risk. You may still get a loan, but don’t count on it.
Things that affect your credit score are:
• Your payment history
• Debt to income ratio
• Debt relative to credit card limits
• A long history of revolving debt
• Credit inquiries
That last one is something you can and should control immediately. If you’re shopping for a new car, for instance, do not let every car dealer run your credit. Refuse to discuss the financing and do not hand over your Social Security number until you’ve chosen the car you want and come to an agreement on the price. Ditto for furniture stores, appliance stores, etc.
Additionally, don’t respond to every credit card offer that comes in the mail. It might be fun to have a wallet full of cards you’ve never even used – just in case. But they will come back to bite you. Multiple inquires indicate that you are about to start spending way over your head – and that’s a red flag that can and will lower your score.
CreditScoreQuick.com
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July 16th, 2008
There are a few options when you are trying to eliminate debt. You probably have heard of debt consolidation. This really is not the solution for getting rid of debt problems. In this article I am going to discuss five options and out of the five only one works the best.
Our option.
We provide a service that is a proven-debt elimination process to help you become debt free typically within 36 months. A service expert will design a debt-relief program that is right for your unique situation. This expert will assist you through the entire process.
Debt Consolidation
A debt consolidation solution is flawed. You borrow money to fix a borrowed money problem. Lenders and banks offer these programs because they make money. This is supposed to reduce your debt; all it does is prolong your debt.
Consumer Credit Counseling Services ( CCCS)
A credit card company originally created Consumer Credit Counseling Service (CCCS) in the early 1980’s to recover money from consumers that have fallen behind on payments. CCCS disguised itself as a non-profit entity to hide the fact they are actually a bank. Statistics show the more than 50% of the people that start this process fail to finish. CCCS seeks to collect as much money as it can and they charge the consumer a fee for the service, often under the heading of a voluntary contribution.
Bankruptcy
In 2005 congress passed a new bankruptcy law that made it tough to file bankruptcy. At times bankruptcy will be on your credit report for 10years. Not to mention all the fees involved with an attorney and credit counseling classes it usually requires.
Do nothing
This is not a good option. If you decide not to do anything you can count on the situation getting worse. Eventually you could be facing court orders which will ultimately result in wage garnishment or even judgments. If you are ready to take control of you financial destiny click here today!
CreditScoreQuick.com
Posted in credit card debt consolidation, debt consolidation, debt elmination, free credit score reports | 1 Comment »
July 16th, 2008
 According the US Bureau of Economic analysis, the savings rate of common households have not been this low since the “great depression.” This is a sure sign many Americans are living beyond there means. If a emergency comes up like a loss of job or illness they will be a financial blow to them due to a lack of savings.
If you are worried about your financial situation there is no better time than now to start evaluating your situation. In this article we are going to discuss some telltale signs of living beyond your means.
Sign 1: Your credit score is below 600.
The credit bureaus keep track of your payment history to your creditors. This information is used to generate your credit score also know as fico scores. Credit scores typically range between 300 and 850. The higher your credit score the better terms on loans you get. Typically when your credit score is below 600 you are living beyond your means.
Sign 2: Your credit card balances are increasing
If you are only paying the minimum payment on your credit card balances then you are more than likely living beyond your means. You really should not charge more on a credit card than you can afford to pay off that same month. If you are charging more on a card than you can pay off soon, then you are living beyond your means.
Sign 3: You are saving less than 5% of you earnings
If you are saving less than 5 % you are in danger of having financial problems if someone in you family has a medical emergency. According to the Bureau of Economic Analysis the saving rate starting in 2005 until now has not been the low since 1933. This was during the great depression.
Sign 4: Your bills are getting out of control
Buying stuff on credit has become America’s favorite pastime. Once you rack up a bunch of credit card because you bought a new TV, furniture, stereos, etc….., you may find yourself in trouble. All of this debt adds up quick and bankruptcy could be on the horizon.
Sign 5: More than 32% of your income goes to your house payment
Most lenders like to see your payment to income around this percentage. Some like to see it around 28%, but this percentage is real conservative.
Bottom-line is tour country is in trouble with debt. If you see a problem the best thing to do is recognize there is a problem first. The second step is to stop spending and pay off your debt. If you charge on credit pay it off that month. Stay on top of your credit health and don’t live beyond your means.
CreditScoreQuick.com
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July 15th, 2008
 Most people don’t realize how easy it is for someone to steal your identity without breaking into your home. In public places criminals may engage in what they call shoulder surfing, watching at a nearby location as you punch in your telephone calling card or a credit card number. They may also listen in on a conversation as you give a credit card number over the telephone to a rental company or hotel.
The area near your home or office may not be safe. Criminals can engage in what they call “Dumpster Diving” and go through you trash, communal dumpster to obtain checking account numbers, credit card applications, and bank statements. These types of documents make it easy for criminals to steal your identity.
If you receive pre-approved credit card applications in the mail and disregard them without shredding them, identity thieves will try to activate them without your knowledge. Some credit card companies require credit cards once approved to be activated from your home phone, but this practice is not universal yet. Also if you mail is sent to a place where it can be easily accessed a identity thief may redirect that mail somewhere else.
During recent years the internet has been a target of identity theft. Criminals try to get personal information by spamming people and requesting personal information posing as a bank. They also sent e-mails offering some service that really is not present.
With enough of you personal information a identity thief can take over your identity and wreck your life. They can drain your banks accounts, saving accounts, charge up your credit cards, apply for new credit, and file bankruptcy in your own name. This is serious business. This will also destroy your free credit reports and good name.
CreditScoreQuick.com
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July 15th, 2008
Q:
Thanks Mike! Appreciate your reply. Are you familiar with the types of deals homeowners are making with lenders these days? Our next step will probably be to meet with a local RE attorney, but am curious what you’ve seen in your experience. Oh, and I would prefer to work with a for-profit repair specialist. I’ve read derogatory things about free agencies that actually represent creditors rather than those being counseled. What are your thoughts on that as well?
Appreciate your time!
A:
Sometimes the banks will make a payment plan you can afford. I would call them and find out what your options are. For credit repair, our blog gives FREE credit repair advice. There is not need to pay anyone for credit repair. Being that I am a experience lender and help people all the time, I have put my experience based on FACTS within my Blog. There are all kinds of tips and Faqs on how to repair your credit. Let me know if you have anymore questions.
Mike Clover
CreditScoreQuick.com
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July 15th, 2008
 In the current market getting your house refinanced could be challenging. With all the new credit report and credit score requirements it might be tough to get it done. Sometimes it is necessary to refinance depending on the terms of your current loan. Here are some tips on whether refinancing your home is right for you.
· Check your free credit reports
With the access for free credit reports on the web go ahead and pull a recent copy of your credit report to see where your credit scores stand. This will allow you to be prepared for what ever a lender throws at you.
· How long will you stay in your home?
When you refinance your home there are lots of third party costs involved. When all the costs involved it will take a while to recoup the cost for the refinance. Typically you need to stay in your home at least 10 years in the “Rule of Thumb.” If you are not staying in your home for at least 10 years, it may not be worth refinancing.
· Lower your interest rate.
When you decide to refinance your home you should be able to lower your interest rate a minimum of 1.5%. I recommend 2%, but 1.5% will work as well. Otherwise refinancing your home is not worth the cost involved.
· Equity in your home
During the finance process you need the equity to roll in the closing costs. If you don’t have the equity to refinance, then you have to pay the cost out of pocket. So you might get with your lender to make sure you have the equity to refinance to begin with.
· Will you qualify for a loan?
With all the changes in the current lending market, the loan programs that were once available might be gone now. So if you require some type of creative financing, like limited doc loans you could have issues getting it done. Get with a reputable mortgage loan lender to see where you stand.
· Refinance at the first of the year.
When you refinance your home you should do so at the first of the year. The reason is the mortgage lender will only have to collect taxes on the refinance for the first of the year. The later during the year refinance the more the lender will be required to collect in taxes. This ultimately will drive up the cost of the refinance the longer you wait. So make sure you refinance your home between January and March.
About the Author: Mike Clover is the owner of http://www.creditscorequick.com/. CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness
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July 14th, 2008
Hi Mike,
I see that you guys are in the lending business or have had experience. All of these banks going under are a big concern to me. I have been working on my credit report for the last 12 months. I have actually used some of your great free credit repair articles to assist me with improving my credit report. I have been doing this to achieve a goal, and that goal is to buy a house. It looks like Freddie and Fannie will be helped by the government. What does this mean for someone like me who does not have perfect credit?
Chris Tuttle
Hi Chris,
More people are concerned about the liquidity problem than you can imagine. It is scary when big banks go out of business. This happened in the 80’s as well. What is going to happen, is the banks will continue to tighten up on there guidelines to issue loans. I am sure there will be a lot more banks going out of business. What does this mean for you? This is a great time to save money and work on your credit report, just like you are doing. Not sure what is going on with your credit, but if you have read my articles they will tell you exactly what to do. Remember there is FHA loans still, and it has not changed much since all of this has been going on. FHA works with bad credit to help you get into a house. Good luck.
Mike Clover
Posted in free credit score reports | 1 Comment »
July 14th, 2008
 In America we have the freedom to choose. The possibilities are un-limited. The one thing I think people forget to do is save for retirement. In all honesty most people are never taught to save. I believe being taught to save ties to proper money management.
Money management leads to less credit problems. Starting young on your nest egg will allow you to retire earlier. So in this article I am going to give some tips on saving for the golden years. If you don’t save and expect to live on social security, you might find yourself doing without.
Step one: Open a savings account
Determine what you can afford to save with each paycheck. My advice would be to start saving a minimum of 5% of each paycheck. Once you have determined how much you can save open a saving account that pays a little interest and has no fees.
Step two: Invest money in the Stock Market
Once you have about six months salary in your savings, at that time you are ready to start investing in the stock market. The stock market has proven over time to be the best way to double your money using the “Rule of 72” So if you divide the 72 by the rate of return you are getting on your investment, it will tell you how long it will take to double your money. For example:
Interest rate: 9%
Amount invested: $52,000
72/9 = 8 years
In eight years you would have approximately $104,000
You can see how investing and getting a return in crucial for retirement.
Step three: Select a good investment Broker
There are lots of investment brokers. Find out what there fees are. I would shop a around and find an investment broker that has less fees along with some good references. A good company this is conservative might be Edward Jones.
Step four: Manage your money
Since having good credit is a way of life these days, make sure you stay on top of your credit. Its does no good to save if someone is stealing your credit from you. Make sure you pull a copy of your free credit score report regularly to stay on top of your credit scores. With good credit scores you will save on your loans terms. You will also know if someone has stolen your personal information. Property credit worthiness management is part of this entire process.
CreditScoreQuick.com
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Disclaimer: This information has been compiled and provided by CreditScoreQuick.com as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.
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