Which Credit Inquiries Lower Your Score?

Excessive Inquiries

Excessive inquiries to your credit can drastically reduce your credit score, although certain types of inquires don’t affect it at all. You need to know which types negatively affect your credit, so you can keep them to a minimum in order to ensure optimal credit scores on a consistent basis.

The Hard Inquiry

When you fill out a credit application you authorize a bank, credit card company or lender to view your credit history. This is known as a hard inquiry and is done with “permissible purpose”.

Collection agencies may also pull a hard inquiry. Hard inquiries can take points from your credit score. Many hard inquiries are also viewed negatively by creditors and can be used as a reason to deny you credit.

The Soft Inquiry

A soft inquiry may not have been authorized by you. Your existing creditors pull your credit reports to see how you are paying your other bills and if any problems exist. They also do this as an excuse to invoke “universal default” which can raise your current interest rate. Lenders and credit card issuers also pull soft inquiries in order to screen you for pre-approved offers. Soft inquiries do not take points away from your credit score and are supposedly only viewable by you.

Pre-Approved Offers

When you receive a “pre-approved” offer in the mail, this means a bank or credit card

company has screened your credit and made a soft inquiry. However, even when you receive a pre-approved credit offer in the mail and you respond, a hard inquiry will most likely be pulled. This means a hard inquiry will be added to your credit files and points will be deducted from your credit score.

You can opt out of these types of inquiries by visiting OptOutPrescreen.com. You can opt-out of these types of offers for 5 years with an on-line submission. If you want to permanently opt-out of these types of offers, the site will provide you with a letter you can print, sign and mail in which will eliminate you from these types of offers forever.

Why Hard Credit Inquiries Are Bad

Credit grantors view too many credit inquiries as a sign of financial trouble. The creditor has no way of knowing if you were approved for all of the credit you applied for. Your credit inquiry does not indicate approval or denial. They may assume you received the credit lines that are showing as inquiries. Additionally hard credit inquiries take away points from your credit score. Too many hard inquiries could result in a denial of credit and bring down your credit score.

Mortgage and Auto Loan Inquiries

It is wise to shop around for the best interest rates when making a major purchase such as a house or automobile. But shopping around for the best rates may result in many inquiries during the shopping phase. The credit reporting agencies supposedly have a buffer to prevent your credit scores from taking a dive for too many inquiries when shopping around for interest rates.

All inquiries related to a mortgage loan or auto loan done within a 14-day period are counted as one inquiry. The issue with this is that the inquiries are supposed to indicate a mortgage or auto inquiry on your credit report, but there is no way of knowing if a lender or bank has noted that inquiry correctly. Just be informed and ask your lender before applying, especially at a car dealership. They may run your credit through many lenders in order to get you approved.

How Long Do Inquiries Remain On Your Credit Report?

All credit inquiries remain on your credit report for two years and should drop off automatically when the two years have expired.

All “hard” inquiries show up when a lender or creditor request your credit, whereas “soft” inquiries only show up when you request your own credit reports.

Most credit granters disregard credit inquiries after 6 months. While they do remain on your credit reports for 2 years, they are not heavily weighed in decisions to grant credit.

Erasing credit inquiries

The credit reporting agencies will tell you that credit inquiries are just a statement of fact and cannot be removed. This is not true. FRCA Rules state that “Any information can be disputed and must be investigated”. You need not worry about soft inquiries as they do not count against your credit score. Credit inquiries made without “permissible purpose” should be disputed.

The FCRA states you can sue for damages in the amount of $1,000 for each instance a company pulled your credit report without your permission.

Credit inquiries made without your permission may indicate fraud, in which case the credit reporting agencies may put a fraud alert in your files. A fraud alert will make it difficult for anyone, including you, to access your credit report without your permission.

Permissible purpose would be if you applied for credit, one of your current creditors may pull a hard inquiry or a collection agency holding a debt may pull your credit report.

Is Disputing Credit Inquiries Worth The Time?

If the credit inquiry is really a mystery to you and you don’t recall requesting credit then you really should initiate an investigation with the credit reporting agencies. It could be a matter of fraud and you want to handle that immediately. A fraud alert may be put in your files in order to protect you. Fraud alerts will also keep you from applying for credit easily.

Your time may be better spent disputing other types of information that would significantly raise your credit score if deleted.

For more information, visit: http://www.RepairCreditTrauma.com

Behind On Credit Card Payments?

Job losses Are Going To Affect Credit Card Payments…

The news is riddled lately with massive lay-offs of employees. It’s also taking anywhere from 3 to 6 months to get another job, and even then, the salary may not be as much as you were previously making. What is going to happen in the interim? Do you have enough saved to pay your rent or your house payments, along with those never ending credit card bills? More than likely, you don’t. What is going to be the first thing to go? Yup….you guessed it, the credit cards.

What Happens If You Can’t Make Your Payments?

If you let the bills go unpaid for too long, they’re going to end up in “charged-off” status with the original creditor and then the account is going to be sold to a collection company. The collections agency will then pursue payment of the account more aggressively. This is considered a very negative occurrence for your credit scores, short of filing for bankruptcy.

If the balance is large enough, the creditor may consider taking you to court and obtaining a judgment against you. Not only will the judgment be recorded against any property that you own in that county, but the judge can also order that your wages be garnished from your employer, or they can order that your bank account be levied to pay for the debt. If you've ever had this happen to you, it can be devastating to find out your bank account has been sucked dry and whatever money you did have in the account, is now gone forever.

A judgment is also going to become a public record item which will stay on your credit report for 7 years, and interest is going to continue to accrue until the account has been paid.

What Are Your Options?

If you know you’re not going to be able to make your credit card payments anytime in the near future, you have a few options:

1. Contact your creditors, explain the situation and see if they can work out an arrangement with you, on terms that you’ll be able to meet financially. Make sure to talk to them about the possibility of not reporting the payment reduction to the credit bureaus, so your account does not reflect late payments.

2. Contact a bankruptcy attorney and find out if you will be able to pass the 2005 Bankruptcy Means Test, in order to qualify for a Chapter 7 bankruptcy, which is a discharge of all unsecured debts.

3. If you do not qualify for a Chapter 7 bankruptcy, discuss a Chapter 13 bankruptcy with your attorney and find out what the repayment terms will be.

4. Contact a legitimate debt counseling company. The company you choose should counsel you regarding your debt and finances, as well as work with your creditors to reduce your interest rates and set up a structured re-payment plan to pay off all of your debt within a certain period of time.

Which Has Less Negative Effect On Your Credit….BK 13 or Debt Counseling?

If you do not qualify for a Chapter 7 bankruptcy, which a complete discharge of your unsecured debts, you might want to consider repayment arrangements through a debt counseling company versus filing for Chapter 13 bankruptcy.

Both of these options require that you repay your debt for cents on the dollar, and both are accomplished in a set period of time. You’ll need to compare both options and weigh the savings between each, but if the difference is not significant, then as far as your credit is concerned, you’re better off with a debt counseling company.

If you know you’re not going to be able to make your credit card payments, contact a debt counseling company immediately and find out what they can do for you. If they can work out arrangements with your creditors before you ever get behind, your credit report may never feel the effects of your situation. That is the ultimate goal.

By filing for Chapter 13 bankruptcy, this is about as negative as it gets on your credit, not to mention that the public record stays on your credit report for 10 years.

For more information, visit: http://BankruptcyCreditTrauma.com

Raise Your Credit Scores Using This Simple Method

Too much credit card debt results in low credit scores.

It seems as though you’ll never get out from under all those credit card bills doesn’t it? You make a $50 minimum payment on one card, only to see the balance drop by a whopping $5.00 or so….wow….talk about discouraging. At this pace, you’ll possibly have your bills paid off by the time you reach 70! That’s of course assuming you never charge another dollar, which you know is a fantasy. It’s a great goal in a perfect world, but probably not gonna happen.

Once you have multiple credit cards with high balances, you are stuck in a vicious cycle. If you can only afford to make the minimum payment, then 7/8th’s of your payment is going to go to interest and you’re never going to get anywhere in reducing your principal balance. You know you need to do something about it, but what?

Contact your creditors…

It can’t hurt to call all your creditors and ask if they’ll please be kind enough to reduce the interest rates they’re charging on your account. Right now, even the credit card companies are in the midst of a meltdown and they’re cutting back credit limits right and left because some folks are completely defaulting on their debts.

If they hear that you’re working on a plan to try to pay them off, hopefully they’ll be inclined to work with you and possibly reduce your interest rate to help you out. The lower your interest rate is on all your accounts, the faster you’ll be able to pay them off.

Click Here for a Free Script on Negotiating Lower Payments with Creditors

Start by evaluating your expenses…

You got yourself into this mess because you’re charging more than you earn. While it’s fun to go out and buy whatever you want, whenever you want it, at some point it all has to be paid back…..with interest…..that’s kinda like taxes…you just can’t avoid it.

Do you really need that Venti White Mocha, non-fat, no whip, 180 degrees, every day on the way to work? Yeah, yeah, I know…..it wakes you up…..but guess what? You can turn on your coffee pot and fill up your travel mug before you leave, or if that’s too much work, the grocery stores have those coffee singles now. Just boil some water, dip the “tea-like” coffee bag in there, and off you go with portable caffeine…..easy schmeezy. You just saved $3.50 or so…..times 5 = $17.50 a week….times 4 = $70 a month! Hey….you could use that money to pay extra on a credit card bill and see a bigger principal reduction!

How about that $6.00 Guacamole Burger they sell at Carl’s Jr.? Isn’t that the best burger you’ve ever tasted? Throw in some fries and a coke and not only will you get hardening of the arteries, (though the avocado is really good for your hair I’ve heard) but you’ve got about a $9.00 lunch. If you cut that out every day, by the end of the week you’ve saved $45.00 and by the end of the month, you’ve saved $180.00! That’s a nice chunk of change! Just imagine how much principal reduction you’re going to see now!

Are you starting to get the picture here? Just cut out those two things and you have $250.00 extra every month! That can put a good dent in those high credit card balances. Imagine how much more you could save if you just think about the things you buy that you don’t really need. Remember, you don’t have to do this forever….it’s kinda like a diet…..just loose the weight, then you can snack once in awhile within reason, without putting all the weight back on.

Make the “Withdrawal Symptoms” less acute…

First you have to break the “habit” of charging all the time. This in itself is something that requires conscious effort. To help you do this, budget yourself around $100 a month that you’ll put aside in CASH if you want to splurge on lunch or that Pumpkin Spice coffee that ONLY comes out during the holidays. I know you have to have your “fix” once in awhile or else this whole concept is going to go down the drain. Use this money when you are having a “craving” and you just “gotta have it”. This will help alleviate those withdrawal symptoms and make it easier for you to stay on track. Just remember, when that $100 for the month is gone…..no more treats for you, so space it out.

Second tip….carry just one credit card in your wallet for emergencies only. Leave the rest at home. If you don’t carry them with you, even if you do get the urge to spend, you won’t be able to! Oh, by the way, an emergency is defined as something like your car broke down….not Macy’s “one day” sale. Trust me….there are sales going on all the time. Besides….you’ve got enough shoes to wear for the next 10 years I’ll bet!

Pay down the credit card with the lowest balance first…

Work on paying off your debt by making payments on the credit card with lowest balance first. Once you have that account paid off, use the extra money you were spending on the previous account and apply it to the next credit card you have with the lowest balance. Then keep making payments on that account until it’s paid off, and so forth. By doing it this way, you’ll feel a sense of accomplishment that you’re actually getting somewhere, which will give you more motivation to keep on track.

The benefits of paying off your credit card debts…

The results of your efforts will show up as an increase in your overall credit scores. As your scores go up, you’ll have more clout with your creditors. Call them again and ask for those interest rate reductions on the accounts you have remaining. Folks with the highest scores, get the most benefits…so use that to your advantage! Don’t be afraid to call every other month or so and ask for a rate reduction. What’s the worst that can happen? They say no???? No big deal….you’re not in any worse position than you were before you called. If their answer bothers you, you can boycott them after your account is paid off…..that’ll show ‘em!

Don’t close your accounts after they’re paid off…

Remember, it’s not wise to close accounts that have zero balances, unless you can’t trust yourself to leave the card alone or at one point you got “credit happy” and have way too many open accounts. (You know like… Old Navy, Kohls, Mervyns, Sears, Macys, Target…those cards you got because you got an extra 15% off?)
If you do have too many, and know you really should get rid of some of them, close the most recently opened account first, and the second most recently opened account next…and so forth.

Your credit scores like a long credit history and positive, open, active accounts contribute to that history. Just charge $20 on the card every 3 months or so to keep it active and reporting to the credit bureaus. Then PAY IT OFF when the statement comes in. Do this, and you’ll be on your way to an 850 FICO credit score in no time!

For more information on Increasing Your Credit Score:
http://RepairCreditTrauma.com

Best Time Of Year For Credit Repair

Were you aware that the best time of the year to submit disputes to the three major Credit Bureau's is during the holiday season?

Typically staffing at the credit bureaus along with the creditors themselves, who are responsible for verifying disputed information, are a bit short-handed during this time of year due to holidays and vacations.

Under the federal Fair Credit Reporting Act, a credit repository has 5 days from submission of an on-line dispute or from the receipt of a written request, to contact the creditor in question about investigating your complaint(s). The credit reporting agencies should reply back within 30-45 days from the time you submitted your complaint. The repository must send a written report to you with its findings, (and a copy of the revised report if there was any change) within 5 business days after the completion of the investigation.

Because there is a time frame that legally must be adhered to for both the credit bureau's and the lenders/creditors who must verify any items you are disputing, November and December are the optimal times to work on repairing your credit and getting negative items removed.

Use this time of the year to your advantage to fix your credit, in case the credit bureau's and creditors can't thoroughly investigate within the specified time alloted.

Remember....Anything that cannot be verified, must be removed from your credit report altogether.

For more information, visit:

http://RepairCreditTrauma.com

Collection Accounts Are Becoming More Prevalent

Credit card companies are also experiencing major losses in our current economic environment. In light of this, they are also tightening up their guidelines and becoming pickier on who they send “Pre-Approved Offers of Credit”.

They are also watching your accounts like a hawk. Not only accounts you have with them, but accounts you have with other credit card companies as well.

Your credit is being watched by all your credit card issuers more frequently than ever before. If you happen to become past due on any credit card you hold, then beware….you may be in danger of having your credit limit decreased or even frozen.

How does this affect your credit?

• Decreasing your credit limit can cause your balance-to-limit ratio to go up.

In order to achieve the highest credit scores you can possibly have, you don’t want your balance-to-limit ratio to exceed 30% (50% maximum) on any individual account, nor on the total amount of your revolving accounts combined. If a creditor decreases your credit limits on one or more accounts, this can have an immediate negative impact on your overall credit scores.

• Credit card issuers are also lowering credit limits to an amount below what you currently owe.

If they do this, it can possibly put you into an immediate financial bind, because the next statement you get from that creditor is going to ask for the difference between your current balance on the account, and the new reduced credit limit. This amount they’re requiring you to pay can amount to thousands of dollars, and if you’re one of the ones affected, more than likely you’re not going to be able to come up with an extra few thousand dollars to pay by the next due date.

What happens if you can’t pay the difference?

If you cannot pay the “Amount Due” to the creditor after a certain period of time (usually about 90 days), then your account will be transferred to the Collections Department. Some creditors have internal collection departments, while others outsource these accounts to 3rd party Collection Agencies. Either way, the collector’s primary task is to convince you to “pay-up”.

Once a debt has been labeled a “collection account” on your credit, you’re going to see an immediate credit score drop. Collection accounts are about as bad as it gets, short of bankruptcy, as far as your credit scores are concerned.

How do collection agencies work?

Collection agencies work with lenders and creditors in a couple different ways. In all cases, collection agencies purchase these bad debts for much less than the amount owed, usually for pennies on the dollar. The first way is for the agency to buy the bad debt so they own it outright. Another option is for the creditor or lender to consign the account to the collection agency. With this option, the creditor or lender agrees to pay the agency a percentage of whatever amount their collectors are able to recover. Percentages do vary, but some collection agencies can make as much as 50% in some cases.

Once the collection agency takes over the account, they give bonuses to their agents if they are able to collect most or all of the outstanding debt. In essence, the collectors make more in their pockets by making you pay more of the debt. This can lead to brutal and unethical collection practices at times.

How Collection Accounts should be handled:

1. First and foremost, don’t ignore the collection account or the debt collector. The problem can only get worse if you do, which may lead to wage garnishments, or even the company filing suit against you which could result in a judgment. Communicate with the collector and be honest about what you can pay and when you can pay it.

2. It’s always in your best interest to pay a collection account as soon as you possibly can, so you don’t incur interest that is going to accrue on the account as long as you have an outstanding balance. This does not mean that you have to pay the entire balance. You need to keep in mind that these companies have purchased your bad debt for pennies on the dollar, so you should try to negotiate and settle the debt for as little as possible. You can start the negotiation process by asking them if they’ll settle for 20% of the amount they’re asking you to pay, then go up from there. Do not include any interest that is being tacked on as part of your negotiation process. The interest they’re trying to charge you is just the icing on their cake.

3. You should be aware that when you are “settling for less than you owe” on a debt with a collector, they are looking to receive the amount you negotiated with them immediately, so make sure you have the money to do so. Once you do come to an agreement, make sure you GET IT IN WRITING before you make the payment.

4. At times, you may hear an unethical collector tell you whatever you want to hear if they think it will help them get you to pay the debt. If they offer to remove the collection from your credit report in exchange for payment, make sure you require them to put this offer in writing first. Collection accounts are never automatically removed just because they are paid, so don’t fall for that trick unless you see it in print on the collection agencies letterhead referencing that exact account.

5. Debt collectors are paid bonuses on how much they can collect in a calendar month. Keep this in mind during your negotiation process. Sometimes calling at the end of the month can be helpful and negotiations may be more to your advantage if that particular debt collector is trying to meet a goal.

In Summary:

Life does have its challenges and can throw you a curve ball from time to time, usually when you least expect it. In some cases like this, it may be impossible to avoid a collection account. You need to know that you do have many rights and there are many important things you need to be aware of.

For more information,
Visit: www.CollectionActCreditTrauma.com

Spending On Credit - Getting Back To Basics

don't think there is one person right now that isn't affected in some way by the current economic downturn we're experiencing.

In some ways, I'm thinking that maybe what is happening right now is a good thing in some respects. Credit limits are being cut, and people can no longer "consolidate" their debt into home equity loans, because most of us don't have any equity available. Don't get me wrong.....these are not "good" things, but I do believe that all of us are having to re-think our spending habits, and THAT IS a good thing.

Do You Really Need Everything You Charge On Credit?

For too long, we have been on the "gotta have it now" program, which has thrown a majority of people into more debt than they can ever afford to pay back. I reflected back myself on things I've bought that I never even used or really needed. Did I really need to spend my money on that? No, not really.....I just "had to have it" for some reason or another that I can't even remember now.

We Need To Cut Back...

We are all so rushed in this life. There is never enough time to get everything done that we want to do. Our life has taken on "outsourcing" to complete the tasks we either don't want to do, or don't feel we have the time to do, or just don't know how to do. Outsourcing takes money and the majority of us just don't have the disposable income we once "thought" we had to pay for these services. We're having to cut back now. The housekeeper and gardener services are being cancelled. We're not buying things we don't really need. We're not going out to eat as much, nor are we going out for our entertainment as frequently as we used to.

I think we all need to get back to basics and learn how to do some things on our own, and for ourselves. We need to re-think our spending habits, focus on reducing our debt, and learn how to "save" money instead of "spending" it. We need to invest in ourselves, our own security, and our own future. We need to set an example for our own government by not spending beyond our means. We need to have emergency funds saved for ourselves, so we can bail ourselves out of our own mess. We need to be accountable for how we got into this position, change our habits and take personal responsibility.

Getting Back To Basics:

Going out to dinner has become a priviliage now, not an expectation. You know what? Recently, I've actually learned how to cook some pretty darn good meals! Not only that, but we're spending more quality time together as a family, because we all get involved in the process. My kids have even come up with a couple of concoctions that pass as "edibile"! You know what the best part is? It's not the homemade dinners that I remember, but the quality time I'm spending with my family actually making them. That's priceless.

Instead of spending money going to the movies, we're dusting off the board games that have been shoved to the back of the closet for too many years. The laughter, jokes, and quality time we're now spending together is bringing us closer together as a family. More priceless memories.
I love taking long walks with my teenage daughter now....talking about her favorite topic....boys. It brings us closer together and the more she talks and I listen, the more she tells me and the closer we get. Trying to relate to a teenager is no easy task for most parents, myself included. I think I've found the key to that dilemma in just listening to her. I find out all sorts of things about her views on life, her dreams and her plans for the future. I try to tell her every chance I get, how proud of her I am and her face just lights up. There is nothing better in the world than the sight of a smile and happiness on your childs face. Now she bugs me to go walking with her....it's become a part of our daily ritual, and one I look forward to every day.

When was the last time you just curled up on the couch in front of the fireplace with a good book or with your spouse and just sat and talked about the good times? I'll bet you'll remember things about times you spent with loved ones or others; not the things you bought. In the grand scheme of things....nothing you bought, brings you more happiness than the things you actually experience with the ones you love.

Take Some Responsibility To Get Out Of Your Current Situation:

Now is the time to take responsibility for our own credit. Credit affects every area of your life, from home loan rates, to insurance premiums, employment, whether or not a landlord will rent to you, and whether you will even qualify for a credit card, along with what rate you will pay. You need to realize the importance of the roll credit plays in your entire life. How much is your "bad credit" really costing you in the grand scheme of things? Maybe you should take the time to read and learn for yourself. If you don't know what you're doing or how it works, then find out! Don't let credit repair companies scam you out of thousands of dollars because you don't know what you're doing.....FIND OUT! It's not rocket science or brain surgery....really it's not. You could probably learn the basics and enough to make a complete turn-around in your life, if you just took a couple hours to read up on the subject.

We need to learn what affects our credit and what changes we need to make so we have the highest scores we can possibly have. This will afford us "choices" in our lives and not rely on some government bail out program that's going to end up costing all of us even more than we owe now.
Now is that time. Credit Trauma will give you all the education you need to become knowledgable and self sufficient in this area. Just check out our "About" section and find out which scenario best fits your situation. You no longer can afford to bury your head in the sand, and you can no longer afford to pay someone hundreds or even thousands of dollars for services and tips that you can use and implement yourself. There are hundreds of resources out there available to you for free....you just have to find them and that's what we're here to help you with.

It's time to get back to basics.....that means taking responsibility and doing more things for ourselves. You know what? It feels good. There is a sense of accomplishement and pride in doing something yourself. I think we all need to get ourselves back on track.....learn how to do the simple things.....and remember back to a time when that's all you needed to be happy.

Visit:

www.RepairCreditTrauma.com

Tighter Credit Reporting Required For The Three Major Credit Bureaus

Credit standards have tightened to the point that you now have to have, at the very minimum, a 680 credit score to obtain financing for a mortgage or home equity loan. If you don’t have that kind of score or better, then you’re going to be denied credit, as millions of Americans have found out first hand in recent months.

Basically, we’re all counting on the fact that the three major credit reporting agencies are reporting accurate information, in order to ensure you have the highest credit score you can obtain based on your situation.

Debts discharged in Chapter 7 bankruptcies affected…

Apparently, this is not always the case though. If you have filed a Chapter 7 bankruptcy which has been discharged, the debts that were included in the bankruptcy could still possibly be showing on your credit report as “unpaid” or “overdue”. This is going to affect your credit score in a negative way, which could then affect whether or not you’re going to be approved for a loan.

Help with this issue however, could be on the way. As the result of an injunction issued by Judge David O. Carter of the U.S. District Court of the Central District of California, against credit reporting giants, Experian Information Solutions, TransUnion and Equifax Information Services, new rules for the credit reporting industry have recently become operational.

New procedures the credit bureaus must follow:

The country's three major repositories of consumer credit information must now follow detailed procedures for the retroactive correction and updating of borrowers' and consumers' credit file information concerning debt discharged in Chapter 7 bankruptcy proceedings as well as new procedures to ensure that debts subject to future discharge orders will be similarly treated.
Michael W. Sobol, an attorney at the national law firm Lieff Cabraser Heimann & Bernstein LLP, which represented the plaintiffs in the litigation, called the new procedures a "paradigm shift in credit reporting industry" that will immediately benefit millions of homeowners and borrowers. "No longer can credit reporting agencies merely parrot back this information as provided by creditors but must now reconcile creditors' information against available public records to assure maximum possible accuracy," he added.

In the class action lawsuit, the plaintiffs alleged that Experian, TransUnion and Equifax violated the Fair Credit Reporting Act by failing to follow reasonable procedures in the reporting of debts discharged in Chapter 7 bankruptcy proceedings. Plaintiffs allege that defendants continued to report debts as unpaid or overdue even though they had been discharged in bankruptcy and defendants were aware of the existence a Chapter 7 discharge order.

When does this take effect?

The new procedures for the credit reporting industry were established under to an injunction approved by Judge Carter in August 2008 in the case of White vs. Experian Information Solutions. The court set Oct. 1 as the date the new procedures became in effect.

"Consumer credit is tightening across the nation due to the crisis in the financial industry," added Mr. Sobol. "It is more important now than ever that consumers' creditworthiness be assessed upon the most accurate information available."

The class action lawsuit remains ongoing with the plaintiffs seeking monetary damages for the defendants' alleged misconduct.

It looks as though we’re going to finally see some self-accountability with the credit reporting agencies.

(Information courtesy of James Comtois – Broker Universe)

Visit:

http://BankruptcyCreditTrauma.com

How To “Buy Time” When Late On Your Mortgage Payment

Were you aware that as soon as you’ve missed three (3) consecutive mortgage payments in a row, that most lenders will NOT let you pay less than the full amount (all three payments at once) at that point?

If you’re struggling right now to just keep up with your mortgage payments until you can work out something with your lender, or the government’s bailout program steps in to help you, then did you know that you can continue to run 30 or 60 days behind indefinitely? Most lenders will continue to let you make one payment every month, as long as you are NO MORE than 60 days behind on your mortgage. This isn’t going to help your credit score any, but it does buy you some time.

What happens if I miss that 3rd payment?

Once you miss that 3rd mortgage payment and are a full 90 days delinquent, your lender will no longer accept less than 3 full months of payments to bring you current. They are also required to file an NOD (Notice of Default) against your property, and this marks the beginning of the foreclosure process. From here, the phrase “foreclosure process started” is going to appear on your credit report (and will remain there for 7 years even if you bring the loan current) and your loan is going to start to incur additional, pretty hefty charges because of the process itself.

Unless your lender can work out an arrangement with you before your home “goes to sale”, and you lose it forever, which takes a minimum of 90 days, then buying time by making at least one mortgage payment before you are 3 months down is the best way to go, if you can possibly do it.

What if I’m already 90 days late?

If you’ve already missed 3 months of mortgage payments and your lender has already filed an NOD against your property, the first thing to do is contact that lender and see if they’ll be willing to renegotiate your loan terms, so you do not lose your home. Mortgage lenders are NOT in the business of owning real estate, and right now, the last thing they want is to own another house. They own too many already! If you don’t get satisfaction at the first level that you speak to, ask for their supervisor and keep moving up the “food chain” so to speak, until you actually talk with someone who can answer your questions with the authority to do so. In business, I’ve found that “Those who scream the loudest, get the best service.”

Don’t spend the money!

A lot of folks will have some of their mortgage payment, but possibly not all of it. One of the biggest mistakes you can make if you are in this situation, is to spend that money on something else. Just because the lender will not accept less than 3 payments to bring your account current, does not mean that you will not need to come in with “some money” if you can negotiate a loan modification with your lender. A lender is going to be more willing to work with you, if you’re willing to do your part and bring some cash to the table during the negotiation process. Even if this turns out not to be the case, you’re going to need somewhere else to live and now that your credit is shot, you’re going to look a lot better to a prospective landlord if you have enough cash to come in with first and last months’ rent, along with a security deposit, so be smart about what you do with that extra money.

Visit: http://MortgageCreditTrauma.com

What Is A PayDay Loan?

A payday loan is basically a paycheck advance, also referred to as a payday advance and it is one of the biggest financial mistakes you can make.

Ever borrowed from a “loan shark”?

The purpose of this type of loan is to cover a borrower’s expenses for a short term, until their next paycheck comes in. I like to refer to these types of loans as “mafia loans” or “loan sharks” because of the amount of interest that is charged.

Most loans range from $100 to $500 and the balance is due and payable in two weeks. Interest rates can range anywhere from 400%, and even as high as 900% APR.

How does it work?

These types of lending stores usually have small locations in strip malls within the city. A borrower can walk in and is required to furnish one or more pay-stubs, along with their most recent bank statement, to prove they have a steady source of income. In order to secure the loan, the borrower is required to write a post-dated check to the lender for the total amount of the loan, including the fees that are being charged. The finances charges are usually 15% to 30% of the amount being borrowed for the two week period.

Re-payment for the loan is expected to be in-person. If the borrower fails to show up, then the lender will deposit the check directly, or process an electronic withdrawal directly from the borrower’s bank account. If there is not enough money in the account to cover the check, not only does the bank charge a non-sufficient funds fee, but the loan store is going to charge additional fees or an increased interest rate because of the failure to pay.

Why this is so stupid…

This type of company is basically charging you an arm and a leg for the use of their money for only two weeks! You work hard for your money. Why would you want to give back such a big chunk? It’s basically just throwing money out the window.

Learn how to budget your money and make it last until the next time you get paid. Better yet, take that $30 or $80 finance charge you were going to pay and put it in savings. That way, next time you’re in need of cash before you get paid, you can withdrawal it from your savings instead! Now that’s a novel idea!

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http://RepairCreditTrauma.com