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Tip
# 1
Anytime you deal with the Bureaus do it by Certified
Mail or via the internet. Federal Regulations require
the Bureaus to respond to you within 30 days of
admitting to receiving your information. By using
certified mail you have a signed receipt that documents
when the 30 day clock started. The same is true by using
Email, you can document when you sent your dispute.
Tip #2
Use Consumer Counseling Services only when you are
in real trouble. If you have a great credit score but
just want to lower your monthly payments they are not
for you. Call the charge card company and see if they
will renegotiate the rate you pay. Remember it is a
negotiation, there are lots of card companies out there,
chance are that the ones you have want to keep your
business.
Tip #3
If you have a $5,000.00 limit on your charge card
one way to help your score is never allow the balance to
reach 33% of the limit. Keep it just under the 33%
level, make your payments on time and it should increase
your score.
Tip #4
If you are not using a Charge card, don't close the
account. The Bureaus do not consider charge card debt
as long term debt until it is at least 7 years old. If
you have paid off the card and the company isn't
charging you an annual fee let it sit. Every 3 to 6
months put a small charge on it and pay it off within 30
days.
Tip #5
If a collection is showing on your report and you
feel it is not yours Dispute it! Don't automatically
assume it is yours. If its not and you pay it off you
admit, by paying it, that it was yours. Remember you
have the right to see the original document that you
signed saying you agree to repay the debt. So just
because someone tells you that you owe the money does
not necessarily mean that you do, many people have
similar names and occasional typographical errors do
occur when the information is input into the credit
system.
Tip #6
If the collection is yours negotiate with the
agency, the only way they get paid is if you agree to
pay them. Always ask what will it take to settle this
issue. Never be the first to state a dollar figure.
Don't let the collection agent unsettle you, if you get
frustrated politely end the conversation and agree to
call back when you feel you are in control. The
collection agent may not agree to an arranged settlement
but if you don't ask you will never find out. Calling
back and asking to speak to the manager or another agent
generally does not work. So no matter how ugly the
agent may get stay calm and professional, count to 10,
smile at the phone, its your money he/she wants and you
have the upper hand.
Tip # 7
If anyone tells you that if you send me a check or
pay me today I will remove this from your credit report,
you should be wary. The only way something may be
removed from your credit report is if it is proven to be
an error, so if you are paying someone how can it be an
error.
Tip # 8
When you payoff or settle any dispute/collection
KEEP the DOCUMENTATION for 10 YEARS NOT 7 years. Good
things fall off of your credit report generally in 7
years, bad things can come back to haunt you after
that. As long as you have the cancelled check, letter
showing paid in full etc. you have the proof. If you
loose it and the information shows back up on your
credit report the only way to get it back off is to PAY
IT AGAIN. It is your responsibility to prove that a
collection has been paid off so keep your documentation
for at least 10 years.
Tip # 9
If you are behind on your mortgage payment please
contact your lenders servicing department and let them
know your situation. Most lenders are more willing to
work with you if you have kept them informed. Lenders
do not want to take your home back unless there are no
other options.
Tip # 10
If you are facing the possibility of Foreclosure
don't let the "I'm not going to lose my equity" bug bite
you. If have an offer that takes you out of the
situation and you cannot afford to wait for another it
may well be better to lose the equity and not have a
foreclosure on your credit report. Remember if the bank
forecloses you still lose your equity and if they sell
it for less than what you owe they may get a deficiency
judgment against you for the difference. A foreclosure
may lower your credit score by as much as 280 points
while a short sale may only hit your score for 100.
Tip # 11
If you get a credit item/discrepancy repaired with 1
bureau do not assume that it has been taken care of with
the other bureaus. Make sure you send your
documentation to all 3 bureaus via certified mail. Get
documentation from all 3 bureaus that the item in
question has been corrected. Save the documentation and
letters for at least 10 years.
Tip # 12
If you have filed for Bankruptcy and it has been
discharged make sure you send a copy of the
Discharge and the list of creditors to all 3 bureaus.
Even if your attorney says they will do it for you send
it yourself by certified mail.
Tip # 13
Getting Divorced? If the divorce decree stipulates
you are to quit claim deed the property over to your
soon to be ex spouse, make sure that it also stipulates
that before you complete the quit claim the spouse
receiving the home must first refinance the home into
his or her name. If you quit claim the property you have
given up your asset but you still have the liability of
the note and mortgage. Even if the decree says the ex is
to hold you harmless if he/she doesn't make the payment
and he/she has not refinanced the loan into just their
name the delinquency may show up on your credit report.
Tip # 14
Trying to re-establish your credit, try joining a
credit union. Set up a checking and savings account
then ask to borrow $500.00 to $1,000.00 offering the
savings account as collateral. Take the loan amount an
place it in the savings account and pay back the loan
over the next 6 to 12 months. Installment debt paid on
a regular and timely basis should help to rebuild your
credit.
Tip #15
Every time someone, other than yourself, pulls your
credit report it lowers your score, the best guess is 3
to 8 points per bureau. So, if you fill out one of
those credit forms to get a free hat or umbrella, you
guessed it, they are pulling your credit report. If you
are car shopping tell the salesman that they are not
authorized to pull your credit report before you decide
on which car you are purchasing. The same is true if you
are mortgage shopping if you do it online with one of
those will get you 4 quotes places they may well be
pulling your credit report 4 times, (lowering your
score). If you have an honest idea of what your credit
is like any broker can prepare a good faith estimate for
you without pulling your credit just keep in mind that
if items do show up and your scores are less than you
thought it will have an effect on the interest rate and
the Good Faith Estimate.
Tip # 16
30 days late on a charge card payment? Considering
paying off the creditor and closing the account all at
the same time? DON'T at least not at the same time.
When you pay off an account that is past due by 30 or
more days and close it at the same time the Creditors
last report on you to the bureaus may well reflect an
R-2 rating on your report for 7 years. Bring the
account current, wait for the next bill to come in then
pay them off and close the account. This should leave
you with an R-1 rating on the report as when it was
closed you were current.
Tip # 17
When you close a credit card that has a balance,
your total available credit card that has a balance,
your total available credit is lowered to $0. Since you
still have a balance on that card with no credit limit,
it looks like you've maxed out. The amount of debt you
have is 30% of your credit score; so a maxed out credit
card, or one that appears maxed out, can have a very
negative impact on you credit score.
Tip # 18
If you only have 1 credit card with available credit
closing out this card will decrease total available
credit and increase your credit utilization, which as
before is not a desired situation.
Tip # 19
Using a free credit report service is good for
getting an idea on where your scores are at, BUT, the
scores that you receive from this service will probably
be higher than the one that a Bank or Mortgage Broker
will see when they get your report. WHY? Credit
scoring is Risk Based and when you pull the report on
yourself there is no risk involved. When a lender
obtains your report the Risk factor increases, different
parameters are in place and in most cases, due to that
risk, the scores will be different and probably lower.
Remember, if you use one of the "Free" credit report
services you probably had to "join" their service, don't
forget to cancel it if you don't plan on availing
yourself of their continuing services and bills.
Tip# 20
Using a “payday loan” service is not looked upon
well by most lenders and in some underwriters opinions
it is looked at as financial mismanagement or proof of
inability to manage your funds and debts. So prior to
considering the purchase of a home it may be in your
best interest to have not used one of these services for
at least 75 days.
Tip# 21
Being 30 days late on a mortgage payment may drop your
credit score by as much as 85 points, in addition some
lenders, in today’s market, will not consider a new
purchase or refinance until you have had 0 x 30 days on
your credit report for a minimum of 12 months.
Tip
#22
One of the most
important things to remember when dealing with a
collection agency is to remember the money the agent
wants is in your pocket, You are the one in control stay
professional and remain calm if the conversation is
getting heated, Remember the money is in your pocket. |
