Close Credit Cards-Pay Everything In Cash
Pay Off Collections Before Applying for A Loan
Close Accounts You Don’t Need or Use
Paying Off Your Auto Loan Will Help Your Credit
All sounds like great advice, right? And it may be for some things, but I can tell you first hand that all of these items will negatively impact your credit scores. As you can see, it’s not always easy to separate good advice from bad.
Over the last couple of years, the important issue of credit awareness has gone mainstream. Every time you open up your web browser or your newspaper, there’s another article on how “you too can have a 780 credit score.” Make no mistake about it, I have beaten the drum for years about the importance of credit education. Indeed, good credit is the linchpin for long-term financial success. And, I am pleased that this important issue has stepped out of the shadows and into the spotlight where it belongs. However, the problem with the mass dissemination of this truly important information is that not all of it is accurate or even correct. And it is virtually impossible for a consumer to separate out the truly helpful information from a well-turned sales pitch or a well-meaning, but misguided report.
With years of experience in the trenches repairing credit, I view most of the media proliferation of credit advice as ranging from superficial to potentially destructive. It’s abundantly clear to me that many alleged experts who offer tips on repairing credit have never repaired anyone’s credit. So riddle me this: how do American consumers benefit when a self-proclaimed “credit expert”-among other things–who has never repaired anyone’s credit has their face splashed across a mass-produced, nationally distributed credit repair kit? This misrepresentation is extremely problematic when you face a serious credit repair issue and you are unable to make a clear choice for how to solve the problem and close the deal.
Everyone has their strengths. Mine is that I am a full-fledged credit improvement and education expert. I have earned the right to say this because I have helped improve literally thousands of individuals’ credit scores, enabling them to live out their dreams of home ownership I am not saying this to self-promote. Rather, I am simply going on record to say that, unlike some media savvy, one size fits all, so-called “financial experts” who claim to know everything about mortgages, stocks, credit and everything but the kitchen sink, I know credit repair inside and out. Credit repair is completely doable. Trust me, I have seen it all, and there is very little that can’t be fixed provided you know the right resources to tap.
Here are three credit repair success stories that I want to share with you, situations that I am sure you have encountered many times, but didn’t realize that improvement could be made by tapping the right resources:
A client came to me with a 602 credit score. Other than a few aged late pays, he had a fairly decent credit history. As a result, he could not understand the reason for his low credit score. He asked me to figure out why. After evaluating his reports, we found a home equity line of credit (HELOC) account listed as a REVOLVING account. This account had a limit of $49,000, but had a balance due of $49,500. As a result of the type of account attached to this credit line, the client appeared to have a credit card (revolving) account that was over its limit.
There are two reasons why you never want to go over your limit. They are:
- Going over the limit gives the impression that you are in financial distress.
- Over limit gives the impression that you do not follow the agreements made with your creditors making you a bad credit risk. It appeared that the client had agreed upon a limit of $49,000, and then unilaterally opted to exceed that limit.
Since a HELOC is actually a secured loan, we worked with the credit bureaus and the lender to change the type of account from “Revolving” to “Other”. (The first preference for changing the type of account in this situation is “Installment”, but when our request is rejected, “Other” is a good second. Once we managed that single change, his score shot up 100 points, literally overnight. Why? Because we removed an over the limit revolving account from his profile.
Another client had immaculate credit until she incurred a 30-day late on her mortgage payment. This caused her score to go DOWN 80 POINTS. The bureaus reported the late payment in January, but the client knew she wasn’t late in January, but rather in December. So, we called the creditor, and without acknowledging the December late pay, explained that they mistakenly reported a 30-day late in January that had not occurred. We then asked them to research it. They confirmed that our client was not late in January. As a result, the creditor willingly faxed a letter to our client confirming their error. The client took the letter to her mortgage broker who performed a rapid re-score. Her score shot up 75 points immediately. How did we manage it? The law states that creditors and bureaus must remove inaccurately reported information. That’s why it is so important to verify all reported items on a derogatory account before conceding. Yes, in this case, the client was late in December. However, the report did not reflect this fact. Therefore, by law, the creditor had to expel it from her reports.
In 80% of all cases, bankruptcies are inaccurately reported. So, whenever we have a client with a bankruptcy, the first thing we do is verify that every item included within the bankruptcy is accurately reported. This serves on a general basis, but came through in spades just a couple of months ago when a client came to us with a 560 score. After conducting our standard bankruptcy check for accuracy, her score went up 60 points in just 8 weeks. She had a bankruptcy and her score jumped to 620. How did we do this? Well, she had four bankruptcy accounts that were all shown as “charge-offs”. Two of them had past-due balances. So, we requested that the type of account for all four be changed to “Included in BK.” They complied with our request and the past-due balances were zeroed-out.
As clearly illustrated by these success stories, credit repair miracles are real and within the reach of those who know the ropes. That is why I want you to make sure you trust the person who gives you advice regarding your credit and financial issues-they can do great things. The right advice will advance your goals, while the wrong advice will take you even farther away from them. In fact, a wrong move can further lower your score by as much as 80 points. I want to empower with the proper resources regarding credit education and credit repair so that you are able to make the best choices for you and your family.
Tips On How To Separate Good Advice From Bad When It Comes To Credit
Haste definitely makes waste when it comes to making decisions about how to handle credit challenges, and in some cases it is almost impossible to reverse a wrong decision. Taking action on bad advice can cause an instant drop of up to 100 points or more to your credit scores. Trust me on this. A drop of 100 points can cost thousands of dollars per month in additional interest rates and fees. That’s an attention grabber, isn’t it?
Here are some tips to help you separate good advice from bad when it comes to your credit:
- Get Educated. Knowing how to separate good advice from bad is not easy, but it can be done if you do your research. A good place to start is by reading my book, The Big Score – Getting It & Keeping It. You can also find a great deal of information on my site and at the Federal Trade Commission Site: www.ftc.gov.
- Ask for a referral. Asking for a referral from a source that you can trust is a great step toward separating bad advice from good. In many cases you will find that your realtor, your mortgage professional, your accountant, or your attorney can recommend a trust-worthy credit improvement expert or firm that can answer your questions. All of my business comes from referrals. My company has never advertised our services, and we’ve sustained for over ten years.
- Don’t Buy Into a Sales Pitch. Firms that advertise on television or in the newspaper are generally staffed with salespeople, not specialists who can help you. My company has never advertised to the consumer directly. We have always received our business primarily through word of mouth.
- Expect to Pay. Don’t expect to receive good advice for free. Everyone has to make a living. If you call on a professional credit expert for advice, expect to pay as you would an attorney, or an accountant.
- Ask Questions. Make sure the credit specialist you are talking to or taking advice from can tell you how credit scores are calculated. In this book I will talk about many factors involved in calculating a credit score. Without this knowledge, it would be impossible to create a strategy to successfully improve credit scores.
- Be Realistic. Improving credit scores takes time. Watch out for companies or individuals promising miracles will occur in a few days or weeks. Remember, it took time for your scores to get where they are, and it will take at least 3-6 months, depending on your challenges, to improve your situation. It can take up to a year or more if you have multiple collections, tax lien, bankruptcy, or identity theft issues.
- Participate. One of the reasons my program is so successful is that I require participation from my clients. I load them up with education and I require that they manage their credit in a specific manner. Your participation not only ensures a higher level of success, it ensures a greater knowledge base.
You can achieve credit improvement success. It’s not rocket science. It’s knowing your rights and the inner workings of the system. That’s precisely why it’s essential to know you can trust the person who gives you advice regarding your credit and financial issues. The right person can do great things. The right advice will advance your goals. Conversely, the wrong advice can lead you down a path that runs at odds with your long-term goals.
Regardless of whether you are on the verge of bankruptcy, with a credit score of 550, or whether you have a credit score of 720 and want to achieve and keep a 780, improving your credit scores is completely do-able. Believe me. As a credit score expert, I have seen it all, and there is very little that can’t be improved if you tap into the right resources.
I am committed to clearing away the smoke for you by providing you the kind of credit education that can make a tremendous difference in your future. If you have questions or concerns about your credit reports and credit scores, or about improvement or repair, you are always welcome to contact me for a free credit consultation. My email address is email@example.com.
And if you are a professional who has a client that needs help, click here to read about how you can send your clients to my company, Credit Resource Corp. for a free credit consultation.
Getting and Maintaining Strong Credit Scores
- My Free Special Report, Save Your Credit – Save Your Life is a great place to start! Click here to learn more.
- My Book, The Big Score – Getting It & Keeping It will give you the knowledge and the tools you need to Recover and Rebuild from any credit crisis. Even if you have great credit now, this book will help insure that it stays that way. Click here to learn more.
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Hey, nice post, really well written. You should blog more about this.
Thank you for your comment Mike. I plan to post informative articles often. So I hope you stay tuned.