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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 50% of the limit. Keep
it just under the 50% 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.
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