Not all Credit Repair Companies are created equal

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Need help from a Credit Expert but cannot afford to waste your time or money?  Grand Rapids Credit Repair Company, Cambridge Credit Consultants, can help.  We are credit experts and not like other credit repair companies. 

We have helped hundreds of people just like you.  Whether you want a 620 or 640 credit score to buy a home or a 580 credit score to purchase a car, we can help you fix your credit and raise your credit score. 

Here is an example of someone who graduated from our program this past week. Scott was looking to buy a home but had some items from his past getting in his way.  Does this sound familiar? 

You can see in the responses from TransUnion that the tax liens were removed from the credit report as well as the collections were removed from the credit report.  The FICO score jumped over 100 points by these items being removed. 

It is true that not everyone will realize 100% success like Scott did.  Our clients in the past 12 months have realized over 80% removal or correction rate on average.  Take that success and add our 100% money bank guarantee and this makes us one of the best credit repair companies for consumers. 

As a gift to you, click on the book icon for a free report on how to raise your credit score. 

FHA Credit Requirements for Collections, changes effective 7/1/12

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FHA credit requirements will tighten once again on July 1 (moved from April 1 as previously posted), as announced in Mortgagee Letter 2012-3.  Having a 620 score or even a 640 credit score may not be enough.   Credit help, with a certified credit expert, may be imperative for anyone looking to obtain FHA financing.    

There are two major developments that will affect your ability to obtain a mortgage, open collections and disputed tradelines.    

Collection accounts:

Prior to April 1^st – “FHA does not require that collection accounts be paid off as a condition of mortgage approval.”   A low credit score or bad credit score was all that would stop you from financing a FHA loan.  If you had a high enough credit score, most lenders would overlook the collections.

New collection guidelines-  “If the total outstanding balance of all collection accounts is equal to or greater than $1,000 the borrower must resolve the accounts (e.g. entered into payment arrangements with minimum three months verified payments- paid as agreed) or paid in full at the time of, or prior to closing. If the total outstanding balance of all collection accounts is less than $1,000, the borrower is not required to pay off the collection accounts as a condition of mortgage approval”.

Disputed tradelines:

Prior to April 1^st - “If the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage application must be referred to a DE underwriter for review”.  For most lenders this was not an issue and your loan would be underwritten and closed. 

New Guidelnes –Accounts must meet both of the following conditions:

• The total outstanding balance of all disputed credit accounts or collections must be less than $1,000, and
• Disputed credit accounts or collections are aged two years from date of last activity as indicated on the most recent credit repor

“If the borrower has individual or multiple disputed credit accounts or collections with singular or cumulative balances equal to or greater than $1,000, the accounts must be resolved (e.g. payment arrangements with a minimum three months of verified payments made as agreed) or paid in full, prior to, or at the time of closing.  Disputed credit accounts or collections resulting from identity theft, credit card theft, or unauthorized use, etc., will be excluded from the $1,000 limit under the terms shown below. The mortgagee must provide in the case binder, a credit report or letter from the creditor, or other appropriate documentation, to support that the borrower filed an identity theft or police report to dispute the fraudulent charges.”

The good news, we can help.  The bad news, there is no magic wand that make your credit challenges go away.  We can help you remove collections from your credit report.  What cannot be removed can be settled for less than what you owe.  Regardless if you need a 620 credit score, 640 credit score or even a 660 credit score (another top 10 lender raised their requirements last week) we can help you get there.  As one of the nation’s best credit repair companies we know what it takes to help you raise your credit score and fix your credit permanently.

FHA Credit – Improve Credit in 30 Days by NOT Paying Your Credit Card

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Myth - If you pay off your credit card balances, your score will go up.

Fact – Paying your revolving accounts in full will not maximize your credit score, having a small balance will.

Many Credit Consultants and Credit Experts have published incorrect or misleading information when it comes to FHA Credit advice on credit card and revolving accounts.  Given that 30% of your credit score is comprised of the amount you owe on your accounts, it is imperative to know the facts.

It is fairly common knowledge that paying down your credit cards will raise your credit score.  The proportion of your revolving credit lines used is also known as your Debt to Limit Ratio.  No, this is not an entirely true statement and we will explain.   While you are reading this please remember that some of this may not make logical sense, but who said credit scores made sense?  If they thought logically you would get points for paying cash and not being in debt, right?

Over the years we have we participated in over 500 Rapid Rescores.  Rapid Rescoring is the process in which a lender updates an item on your credit report in an effort to raise your credit score.   Here is an example:  Monica has a $300 limit on her credit card and her balance is also $300, she has a 100% Debt to Limit Ratio.  Her lender pulls a FICO score of 580 but needs 620 to approve her.  The lender tells Monica to pay down her card to $45 and he will do a Rapid Rescore to raise her FICO score.  Monica pays the card, gives proof to the lender and the lender submits the information to the Credit Report Provider.  The Credit Provider submits the information to TransUnion, Equifax and Experian.  In 3-5 days the updated information is reflected in her credit score and it rises approximately 50 points.  This is obviously faster than the typical 30-60 days updates can sometimes take. 

Here are some facts we uncovered in these rescores and would like to share.  The following facts listed below have been confirmed by a minimum of 10 Rapid Rescores, each having a 100% success rate.

1)      Managing your balances and paying down your accounts can result in over a 100 point increase

2)      Having a zero balance on a revolving account will not give you as many points as a small balance.  Make sure the balance is under 15% of the credit limit. 

3)      Having a balance between 1% and 15% of your credit limit will give you a higher credit score than being at 30% of your credit limit. 

4)      Department Store Cards have less positive impact than VISA and MasterCard accounts.

There are several more examples, but they are more specific to your particular credit profile or FICO Score Card.  Knowledge is power, call today for a Free Credit Consultation.

Will Paying Off My Credit Card Raise My Credit Score?

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Myth - Always pay your credit card or revolving balance in full and that will give you the highest credit score. 

Fact - Paying off a revolving account or credit card will raise your credit score the majority of the time but not all the time, let me explain in more detail.

The second largest factor, in calculating your credit score, is your Debt to Limit Ratio or Debt Utilization.  Your debt to limit ratio is the balance of your debt compared to the amount of your credit limit.  If you have a balance of $200, with a limit of $500, your debt utilization is 40%.  In other words you owe 40% of your credit limit.  The lower that ratio, the more points you are given and your credit score will be higher.  Within this grading system you are graded for individual accounts as well as all your debts cumulatively. 

Many Credit Consultants will advise you to keep your debt utilization ratio under 30% or maybe 50%.  Some will even advise you to pay your accounts in full.  Honestly this can be good advice depending on your situation.  This article addresses Credit Score facts, what is best for your credit score, nothing more nothing less. 

The ideal Debt to Limit Ratio range is having a balance that is between $1 and 15% of your credit limit.  We have tested this with over a hundred “credit rescores” and the following was confirmed 100% of the time.  Several revolving account facts were revealed in this study:

• Paying your balance under 15% of the limit will give you more points than if you owe 25% or 30% of your credit limit. 
• Having a balance on a card will give you more points than having no balance at all.  Points varied based on the credit profile (credit score cards that we will explain soon) but increases ranged from 6 to 24 points. 

We mentioned earlier that your credit is scored on your accounts individually and cumulatively.   If you have $1,000 in revolving debt spread evenly over three cards, each having a limit of $1,000, you will have a higher score with the $1,000 spread over the three cards than if it is all on one.  So a credit report having three cards with a 33% ratio will have a higher credit score than a report with two zero balance accounts and one at 100%.  Though they both have the 33% overall ratio the one report is given less points since one card is at 100%.  Bottom line – you should spread your debt over your accounts if you want to maximize your credit score.

Please remember that every situation is different.  An “ideal” score is not always realistic nor is it important.  Having the knowledge is what is important.  If you would like a Free Consultation we would be glad to review the details of your situation. 

FHA Credit Requirements Continue to Tighten

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The past couple of years we have continued to see credit requirements tighten.  Having a 620 credit score or even a 640 credit score may not be enough.  Borrowers are becoming more aware of the need to work with Credit Consultants prior to making mortgage application.

Your credit is being scrutinized more than now than ever in the past.  You can open up any newspaper or news website and see the hundreds of horror stories people all across the country are experiencing.  Here is one such article written by Shandra Martinez of Mlive. 

If you are looking to buy a new home in the next year, now is the time to begin working on your credit.  Over 30% of potential borrowers will not qualify for a mortgage if they applied today.  What does your score look like?  If you are like many Americans you may be afraid of knowing what your score is.  Every day we speak with people who have no idea what their credit looks like and the common reason is fear. 

You have nothing to be afraid of.  Everyone fears the unknown but not dealing with it is not the answer.  First, we need to look at your credit and see what is affecting your credit score.  Next, we can determine how particular creditors are impacting your credit score.  One of our Credit Consultants will then come up with an action plan to help you raise your credit score. 

The reality is that you are not alone.  Everyone has struggled with their finances at one point in their life or another.  Most have had it affect their credit.  Recent studies have shown that 30%-35% of the public has a credit score, and credit profile, too low to be approved for a mortgage.  The real question is if you are ready to do something about it.   If you are not ready to speak with someone yet, here is a FREE REPORT to get you started.  For those of you ready to tackle your credit, call today for a Free Consultation.

How does credit card Debt settlement affect your credit score?

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Many people in the US suffered job loss, wage cut and unemployment after the recent financial collapse. Therefore, many consumers default on their payment and incur insurmountable amount of credit card debt. In such situation, traditional credit card debt settlement is a feasible option to eliminate your financial woes. You need to negotiate with the credit card company to lower the interest rate on the outstanding balance. In a debt settlement process you pay less than you originally owed to the creditors. But when you settle your debt it will be displayed on your credit report.  Here is some Credit Coaching advise. 

1. Know about the facts

If you have settled your debt then the credit card company will report your account as “settled in full” instead of “paid in full” to the credit bureau. Your credit report will be updated as "settled". Therefore, your potential lenders might consider you a high risk borrower.  The good news is that it impacts your score the same, meaning a collection that is paid in full is equal to one settled.

2. Duration of the impact of debt settlement on credit report:

Your credit card debt settlement appears on your credit report for 7½ years from the date of first delinquency.  When you settle with a collection agency then the settlement process will appear on credit report based on the dates of the original creditor.

3. Advantages of settlement process:

You can eliminate past debt for less than you owe.  Many companies will take 30-50% of the original balance, even less in some instances.  Many people that consider debt settlement are already behind on their debt.  Paying off the debt quicker, at a reduced amount, will help you rebuild your credit score quicker.

4. Disadvantages of settlement process:

Generally, the credit card companies will not accept a settlement offer if you are current on your payment. The companies will not be convinced that you are suffering from financial crisis if you do not default on your payment.  If you are current today, and fall behind on your account, this will dramatically impact your score.  A 720 credit score can fall to 620 or lower with just one late payment. 

When you plan to negotiate your debt ensure that you include in the terms of agreement that your credit card account will be updated as "paid in full” instead of “settled in full”. Then your potential lenders will not be aware that you have settled your debts when they view your credit report. 

If you would like to discuss your options with settling your debt, Cambridge Credit Consultants can help. 

Raising Your Credit Score but Which is the Correct Credit Score?

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There are many Credit Consultants that will not tell you the whole truth about Credit Scores.  You would think that discovering your credit score would be easy, but it is not.  Most Credit Experts will try and sell you a credit report with your credit score.  The challenge is there are so many different credit scoring models, what they sell you is most likely not the score lenders use in making a lending decision. 

It seems logical that all scores would be the same, unfortunately they are not.  Different scoring models use different grading systems and point allocations will vary.  I have seen swings up to 100 points between the FICO and Vantage scoring models.   

The main company who calculates your credit score is the Field, Isaac Company commonly known as FICO.  This is the preferred score provider and only Credit Score that mortgage lenders will use.  FICO is the only scoring model recognized by Fannie Mae, Freddie Mac and Ginnie Mae.   FICO invented the concept of Credit Scores and have remained the leaders in the industry.  Let’s look at a few facts about the FICO score:

• They range from 300-850, higher is better (see our article regarding the highest score on record of 844)
• Higher scores mean lower interest rates
• FICO scores are calculated based on five categories:
• Field, Isaac Company is the inventor of the FICO score
• They have the only website offering your official FICO scores, www.myfico.com

You can only go to www.myfico.com and get your FICO score directly from them.  They will offer you the option to get your credit score right now and then, if you wish to monitor your FICO score with Equifax it will update the score as it rises (Hopefully it does not lower).

If you are applying for a mortgage, here’s a little good news for you.  You can find out your credit score for free!  The mortgage company will base their decision and interest rate on your middle FICO score, so just ask and they’ll tell you!

FICO scores range between 300 and 850.  Here’s what those scores mean:

• Over 740 – you have excellent credit and you meet the highest score category for mortgage lenders  
• 660 to 739 – you still have very good credit and will be able to obtain most any mortgage loan based on your credit score but pricing adjustments apply for mortgages
• 620 to 659 – Generally this is the minimum requirement for FHA loans and USDA loans.
• 580 to 619 – You have a less than average credit history and obtaining a mortgage will be very difficult
• 579 and under – Need to work on your credit for loan options to be available

Knowing the above information makes it obvious that if you need or want to get credit for something, the higher your score is, the better your chances are to not only get credit but get it at a decent interest rate.  If you are in the 580 to 660 range, you may still get a loan, but the interest rate is likely to be higher.

We cannot stress the importance enough for maintaining a good credit history and establish good credit.   

FHA Credit Repair, Reading the Credit History on a Credit Report

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Your credit report lists a summary of the details and terms for each account. This summary includes information about the account number, condition, balance, type and pay status for each account. The summary for collection records is slightly different.

Please keep in mind there are many variations of reporting so this is merely an example of a popular format.  The following information is for real estate, installment, revolving and other type records:

• ECOA: Code that will show if account is single, joint, authorized user, co-maker etc
• Creditor:  Name or abbreviated name of the creditor. This will sometimes show the address and phone number as well
• Account Number:  A portion of the number is hidden for security reasons.  A partial account number is all that is needed to file a dispute about the record 
• Date last reported:  Last reporting month for the account 
• Date of last activity:  This is the last month the account had “activity” meaning a payment or charge.  
• Date opened:  The date you opened the account 
• Limit or High Credit:  The highest balance the account has had, typically the original amount on an installment or mortgage.  For a credit card it will be the highest balance on record. 
• Balance Owing: Your balance at the last statement date 
• Amount Past Due: The amount due to bring your account current.  
• Terms and Payment amount: This will show the minimum monthly payment due and the number of months for a closed ended loan (installment and mortgage) 
• Type/Rating/Vendor: This will show the type of account (I for Installment, M for Mortgage, R for Revolving), description such as Auto or Home Equity and the bureau that is reporting (if you have a merged credit report) 
• History Status:   For each account, the report also displays an illustrated payment history over the last 24 months. There will be a key at the top of this section describes each payment history symbol and what it indicates for your account. Green boxes marked "OK" show that your payment was made on time

Collection accounts are accounts that are seriously past due and have been transferred to an attorney, collection agency or creditor's internal collection agency. As your debt is transferred between different agencies, you may see several records on your report for the same debt. This data will appear in the same format, on most lender credit reports, as the information above. 

Only one record should be marked as open at a time. All the collection records and the original debt record will (suppose to) expire from your credit report at the same time. Collection records use a unique summary format on your credit report:

So as we continue the steps on raising your credit score and fixing your credit, get your credit report and go over it with a fine tooth comb.  If you need help we are more than happy to give you a Free Credit Consultation.

Raise your credit score 90 points in 90 days, Donovan did!

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Grand Rapids Credit Repair and Credit Experts, Cambridge Credit Consultants can help you raise your credit scores and credit rating.     We help individuals raise their scores and regain their good credit histories.  

Donovan was sent to use by one of our Referral Partners back in July.  He wanted to buy a home and needed to raise his credit scores for FHA loan approval.  Since we specialize in FHA credit repair we knew just what the credit fix would be. 

In just under 90 days his credit scores increased on average over 90 points.  His scores went from 614 to 705, 615 to 706 and 606 to 646.  Here is the proof of the credit score increase:

Do you need a credit fix?  Not only can we help you fix your credit but we can help with Credit Education.  How do you maintain good credit?  Do you need help setting up a budget?  What are the things you need to do to maintain a good credit score?

Can you raise your credit score in 30 days, of course you can and we do it every month.  However not everyone will experience that kind of success.  Most people will take 3-5 months to improve their credit score.  This client is proof that you can raise your credit score a significant amount in a short period of time.

Credit can be a lot like weight loss, it takes time to fix and it goes faster if you have a good coach.  Let me ask you this, if you had a several year rough patch with your finances and credit, is it realistic to think you can fix your credit in 30 days?  Yes for some it can and has been done, for most of us it takes a little time and a good plan.  Our Credit Coaches will analyze your unique situation and come up with a credit action plan to help you fix your credit.

Would you like to increase your credit score?  Call today for a no obligation credit review. 

FHA Credit Repair Series, What Makes up a Credit Report

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Your credit report is basically divided into four sections; identifying or personal information, credit history, public records and inquiries.  Scoring is another section but and is typically covered in the personal or credit section.  Understanding these basics is essential to raising your score to 640 or higher and getting qualified for a FHA loan.

The Identifying information, personal information or “technical data” is just that, information about you. Make sure to review this information for accuracy. It is common for there to be variations in the spelling of your name.  You may even see more than one Social Security number. That's usually because someone either reported or input your information incorrectly when they ordered credit. These variations will stay on your credit report.  If it's reported wrong, this can be both a good thing and bad thing.  When you work on improving your credit score through credit repair you must be very careful to know if the change will be positive or negative.

Other information should include your current and previous addresses, date of birth, telephone numbers, your current and past employers and job title.  Did you know that you can have a higher application score based on your length of address, employment and even job type? Some computer based evaluation systems take this application data into account.  Fair Isaac confirmed this and many other influencers in a 1999 interview.  Although it will not impact your FICO score, it can have an impact on other scoring or evaluation models. 

The next section is your credit history. The individual accounts are called tradelines.  Each account will include the name of the creditor, account number which is typically shortened for security purposes, type of account, 24 month history, credit rating (1-9), balance, payment and term.

On most reports, your payment history is clear and you will see any 30, 60, 90 or greater late payments. Other comments may include collection, charged off or default.   Other reports use payment codes ranging from 1 to 9; an R1, M1 or I1 on a report is an indication of a good payment history.  R2 reflects 30 days late, R3 60 days late and so on.  Often, the code key will be listed on the report so you can better understand what the codes mean.

Accounts on your credit report will be in one of five categories:  mortgage, installment, revolving, collection and other.  Here is a better description of each category:

• Mortgage:  First and second mortgage loans on your home.
• Installment:  Accounts comprised of fixed terms with regular payments, such as a car or student loan.
• Revolving:  Accounts with opened terms with varying payments, such as a credit card or department store account.  Sometimes a Home Equity Line of Credit can appear as a revolving account and that may negatively influence your credit score. 
• Collection:  Accounts that have been assigned to an attorney or collection agency.
• Other:  Accounts where the exact category is unknown. This could include 30-day accounts, such as an American Express card.

Your credit report also lists a summary of the details and terms for each account. This summary includes information about the account number, condition, balance, type and pay status for each account. The summary for collection records is slightly different.

Hopefully we have helped educate you on the basics of a credit report which is critical step in increasing your credit score.  If you would like a Free Consultation call us today 877-497-2673.