There’s so many credit repair co. out there and I don’t know which have a good credentials or does it really work like they advertised?
Many individuals and families with less than perfect credit scores have found themselves caught up in the recent US subprime mortgage crisis. In many situations, they are the victims of unscrupulous lenders who have engaged in predatory lending practices and unfair, or “teaser”, interest rates. The end result is that many victims have come out of the crisis with their credit histories in ruins. These are typically people who had less than perfect credit to begin with. Many believed their subprime mortgages would eventually help them earn better credit, only to have the outcome be the exact opposite.
Subprime lending is a term used when loans are given to borrowers who have blemished credit histories, lower income levels, and/or less than perfect job histories. These people cannot qualify for traditional mortgages at market interest rates. As a result, lenders offer loans with higher interest rates and unconventional terms. Although some feel that this type of lending is important in helping this group of people access credit and build credit, the recent fallout in the US housing market has had disastrous results for this very group.
The individuals hardest hit by this crisis are those who are most vulnerable to changes in the housing market and changes in interest rates. Subprime adjustable rate mortgages (ARMs) account for 6.8% of the mortgage loans currently outstanding in the US, but in the third quarter of 2007, these loans represented 43% of the foreclosures instigated during this same period.
There are a variety of types of ARMs, however many ARMs allow borrowers to pay a fixed interest rate for an initial period, after which the rate can increase as much as 2% per year. These mortgages can cost far more than a traditional mortgage. A 4% fixed rate on a 30-year, $500,000 mortgage would end up costing the borrower $864,000. An ARM, with an initial three year lower rate period, at 10% for the remaining 27 years would cost the borrower $1,367,280.
The message is clear to those still hanging onto ARMs. “Your last rate reset may have been a nonevent, but your next one won’t be,” voices Greg McBride, senior financial analyst for BankRate.com.
The Effect on Subprime Borrowers
There is no question that the majority of subprime borrowers are those individuals with poor credit scores. The payment delinquency rate for these ARM borrowers has ballooned to four times its historic level. Easy access to credit, along with the belief that US housing prices would continue to increase, led many borrowers to overextend. However, once housing prices began to drop, refinancing loans became more difficult, causing many borrowers to default as their interest rates and corresponding payment obligations increased. The negative effects of this on their credit scores cannot be underestimated.
Credit Repair for Victims
The real victims of this debacle are those individuals who strove to increase their credit scores through home ownership, only to have the carpet pulled out from under them, largely by forces entirely beyond their control. Foreclosures, bankruptcies and late payments are some examples of negative credit information that markedly lowers a person’s credit score.
If the mortgage crisis has left you in a credit crisis, some simple suggestions may help. The first step is to Obtain copies of your credit report to ensure that all the credit information they contain is accurate. If there are any inaccuracies, consult a legitimate credit repair company. An expert can not only get errors on credit histories corrected, but can also help a client with debt consolidation strategies to assist the client in rebuilding a good credit score.
The worst thing a victim of the subprime mortgage crisis can do is give up and walk away. It is critical to face the challenge head on so that your credit score doesn’t end up further hampering an ability to get access to credit at a reasonable rate and use that credit to help build a higher credit score.
Credit repair services can help.
The Fair Credit Reporting Act (FCRA) requires each of the Nationwide Consumer Reporting organizations (Equifax, TransUnion and Experian) to provide you with one free credit report every 12 months per your request. This means that you are entitled to three free credit reports per year, if you deem it necessary. You can stagger the requests or order all of them at the same time.
Each of the National Consumer Credit Reporting bureaus have a unique credit report format, but in essence they provide you with the same information. When you receive your free Experian credit report use the following guidelines to read your report:
Personal Header Information
This section lists your full name, report number and report date. You will need to reference the report number, if you wish to contact Experian regarding your credit report.
Potentially Negative Information
Any information that may lead creditors to view you as a credit risk will be listed here. The following details will be listed: the name of the creditor, their address, your account number, account status, claim filed date, claim amount, claim resolved date and who bears the responsibility of resolving any claims or issues against the account.
In addition, this section will list any bankruptcies, foreclosures, judgments or liens in your credit history.
Credit Items
Here you will find all the credit accounts that you have or have had in the past. It will list the name of the creditor, their address, your account number, the type of account, the status of the account (e.g. paid or past due), the date on which the account was opened, the credit limit, payment terms (e.g. 12 months/year), monthly payments, recent balance and recent payment.
You will see a summary “credit history” for each of your accounts. The summary will indicate, whether the account has been to collections or was delinquent. In cases, where you are disputing items against the account, you will see a note indicating your dispute status.
Accounts in Good Standing
This is the good part. Every account you have listed here works towards a good FICO Score. You will find the name of the account creditor, their address, your account number, the type of account, the status of the account, the date on which the account was opened, the credit limit, payment terms (e.g. 12 months/year), monthly payments, recent balance and recent payment. If you closed the account, you will see a note indicating so.
Requests for your Credit History
Any inquiries against your credit file will be listed in this section. This section is divided into two subcategories: (a) Requests Viewed by Others (b) Request Viewed by You.
“Requests Viewed by Others” are inquiries against your credit report from creditors with whom, you have applied for credit lines or loans (e.g. mortgage loan or credit card application). Some inquiries may have been originated from potential employers. Each request will have details identifying the name of the requesting company, their address, the date on which they made the request and any comments regarding the request.
“Requests Viewed by You” are inquiries against your credit report by yourself or persons who have permission to review your credit file by law (e.g. creditors wanting to offer pre-approved credit, employer about to extend an offer of employment or consumer credit reporting bureau processing a request made by you). Each request will detail the name of the requesting company, their address, the date on which they made the request and any comments regarding the request.
Personal Information
This section will detail your personal information. “Names” will reflect all variations of your name (e.g. Sam J.Doe, Samuel J. Doe, S.J.Doe). Additional information will inclue your date of birth, social security number, current address, previous address, phone number, current employer and any personal statements that you have made to Experian regarding your credit report.
Note: By law, Experian cannot disclose medical information, therefore any accounts of the medical nature will be listed as “Medical Payment Data”.
You may also find the following credit report terms helpful: CURR ACCT – Account is current in payments and in good standing.
CUR WAS 30-2 – Account is current was 30 days late twice.
PAID – Account has been paid off and has a $0 balance and is inactive.
CHARGEOFF – Unpaid balance on account was reported as a loss by creditor and the creditor is no longer seeking reimbursement.
COLLECT – Account is severely delinquent and assigned to collections.
FORECLOS – Property was foreclosed.
BKLIQREQ – Debt was forgiven due to Chapter 7, 11 or 13.
DELINQ 60 – Account is 60 days delinquent.
INACTIVE – Account is inactive.
I want to get a prepaid credit card, because I have no credit, and am having trouble getting it because of that fact. I want to find one that has both benefits: 1. no annual fee 2. gets reported to the credit bureau
I have googled it and everything and am having trouble finding one with both things. If you know of one, please let me know. Also, if you know of any better way to get credit when you have none what-so-ever, please let me know. Thanks!
We are in need of some money until payday and I was wondering what payday loan website is good. I know some say payday loans are bad but they are only bad if you dont pay it back the next paycheck and my husband gets a bonus next week so we will be paying it back next week. Anyone have an idea of a good site?
Is there a way to get a free credit report? I heard everyones entitled to 1 free report,state by state?
Which credit card company has instant approval with a person that never had a credit card.
(IVE BEEN TURNED DOWN BY MY BANJ(GUESS THEY DONT TRUST ME)
In today’s world of credit score based lending, credit repair can make a world of difference. Credit repair is simply a legal way to clean up and improve your credit file also known as your credit report. A successful credit repair process has an end result of bringing an individual’s financial history back to life. As much as it helps, it takes time, and should never be viewed as a quick fix.
Although credit repair may seem like a very tedious process it is actually a small price to pay for the benefits gained. This process has become a necessary part of today’s life as more and more people fall victim to bad credit. This “repair” re-establishes the individual’s creditworthiness in the eyes of potential lenders and/or existing creditors. Credit repair is not an easy process and is not something that happens over night.
Taking the time and effort to repair your credit requires patience and, many times, the help of an outside organization. Many have been through similar situations as you and the good news is that it is possible clean up your credit file and remove all the inaccurate information. However, truly fixing your previous financial issues can only be achieved through financial discipline and hard work.
Repairing your credit profile is one of the most important financial decisions you can make. It isn’t just a series of techniques and steps to take, it is your legal right to have questionable negative items removed from our credit files that all of us have as consumers. Regardless of how bad your credit is credit repair is a possibility but it requires changes in spending, saving and bill payment habits. Repairing a bad credit score will require you to have patience, focus and also a little luck.
So how does it all work? A detailed review of your credit file is one big piece of the credit repair puzzle. After careful review, any inaccuracies or incomplete information on a credit report should be reported to the consumer reporting agency (CRA) and the bank, credit card company, or other entity that provided the information to the agency. There may be a substantial amount of inaccuracies currently in your own credit file. Reporting agencies rarely verify or cross check information unless they have a specific reason, like a request from you, to do so.
Although sometimes it seems to be a difficult, time consuming endeavor it needs to be a priority in your personal finance life. Bad credit should not be a source of shame or embarrassment. In addition, it can have more affect on your life then you may realize. Besides the psychological effects it can have on some, bad credit becomes an issue, when you need to make any major purchase such as a home, car, furniture or major appliances. Repairing your credit helps consumers who are being denied or do not qualify for the best interest rates, because of negative information on their reports.
Although not known as a priority for some, credit repair is not just helpful for those who have bad financial history. Credit repair can even be performed on individuals that have moderate to good credit scores, simply to improve their score even more. Whether to help those recover from a negative financial past or to make additional improvements for those with good credit, it is a worthwhile investment.
Credit repair is a booming business now and, unfortunately, a lot of unscrupulous elements are thriving in the market. Scams and shady companies are catching millions of people around the world, and are bleeding those people for millions of dollars a year. Some credit repair clinics do this by challenging every item in a credit file be it negative, positive, or neutral with the hope of overwhelming the credit bureau into removing information without verifying it. Other companies often claim they guarantee to get you a credit card, regardless of your financial history.
If you decide to work on improving your scores, it is absolutely in your best interest to enlist the help of a legal professional. Bad credit repair is possible and can all be done legally, by legal professionals. Due diligence on your part is required as many law firms can charge as high as $2500 for a consultation and some debt counseling offices can charge as much as $800 just to start the process to erase poor credit. Other law firms that specialize in credit score repair have similar techniques at their disposal, which are also completely legal, but offer legal credit repair at substantially lower fees.
I don’t have good credit so I wanted to get a prepaid debit card. Which one is the best and where can I get it?
Im currently disputing a lot of derrogatory info on my credit reports from all 3 agencies. I currently have no major credit cards and was informed that if I opened a credit card account and made the payments on time that would up my credit score.
