Credit Restoration May Help Improve Your
Credit Scores-And Save You Money
If you have negative information showing on your credit report, you should develop a plan for getting any erroneous information rectified, and possibly begin a campaign to minimize the effect of the negative items that are properly reported.
As I'm sure you know, mortgage lending has fully adopted the credit scoring models to establish levels of risk on their loans, in addition to considering the property, employment and income, assets and debt levels. A high score allows a borrower to obtain the best terms, lower scores increase the cost to the borrower.
Anything you can do to increase your scores can help you save on fees and interest charges.
First, if you find erroneous information on your credit report, it is in your best interests to get it corrected. This may involve writing to the three credit repositories: Equifax, Experian and TransUnion (E,E,T) and working toward having the information corrected at the source where it is disseminated.
If the item that is in error is the result of a creditor's report to the repositories, you will be more effective by writing directly to the creditor and having them amend their records. That way, each time your credit record is submitted to E,E,T, it will be correct from the source of the information. Hopefully, you have maintained your records so that you can document your position and be able to prove your case that your payment record was better than reported.
You can also choose to embark on a campaign to use the Fair Credit Reporting Act (FCRA) to your benefit. This is the approach that commercial Credit Restoration companies use. Be aware that there is a distinction between Credit Restoration companies and debt management/negotiation companies.
The FCRA provides for the consumer to question any unverifiable, inaccurate or erroneous information reported on their credit file with E,E,T. Once the credit bureaus are notified of a disputed item on a consumer's report, they have 30 days to affirm the item in question with the creditor. If the creditor cannot verify the information within that time period, the credit item must be corrected or deleted from the consumer's credit file.
As you can see, once negative items are removed from your credit report, you credit score can increase and you will begin to be eligible for the benefits that higher credit scores can produce.
If you have the time, patience and organization to administer a do-it-yourself campaign, or if you choose to hire a credit restoration company, you should see significant results within 90 days. Even if the creditor affirms the information that was reported, you still have the ability to file another dispute and have the repository and creditor repeat the process. If the creditor fails to verify the information within 30 days, the item should be deleted.
If you choose to hire a credit restoration company, expect to be quoted a fee up to approximately $400. A higher fee does not necessarily mean that you will receive better service or better results. Also, be cautious about companies that charge monthly fees because they may be motivated to drag out the process to earn higher fees. Be diligent in your research so that you feel comfortable with the stability, experience, efficiency, cost for the service and the testimonials from their past clients.
The best strategy for high credit scores is to develop a strong credit history over time by making all your payments on time, staying within your credit limits and using your credit responsibly. But, if you have some items that are reported as less than perfect, using credit restoration techniques, or hiring a credit restoration company may be a good approach for you.
Wednesday, April 25, 2007
Wednesday, April 11, 2007
Find the Right Person!
Shopping for a loan is important, shopping for
the person is everything!
The call starts out with the best of intentions:
"What are your rates and fees for ..."
The borrower wants to do their homework.
They want to get a good deal.
They don't want to overpay for the home loan.
They want to believe what they are being told.
When I receive these calls, I am concerned for the borrower. I know that in many cases they are setting themselves up for a disappointment, because their focus is on the wrong thing. They want to feel good about getting the lowest rates and fees at the time and not leave any money on the table.
But, the less scrupulous lenders out there find it easy to tell the borrower what they want to hear, and then deliver the real terms when the borrower is too deep into the transaction to comfortably make a change.
They do it by telling them "today's rates". Unless the file is already approved and ready to go to loan documents, "today's rates" can't be delivered to the borrower.
They do it by quoting an interest rate, but not discussing fees.
They do it by quoting terms that may include a prepayment penalty and not mentioning it, whether that it something that is acceptable to the borrower or not.
They do it by quoting monthly payments that conveniently ignore how long the rate and payments are guaranteed. The borrower may fall in love with the low payments and not understand (until it is too late) that it is an adjustable rate loan which may or may not meet
their needs.
They do it by intentionally lying about the availability of rates and programs with the hopes that they can get deep enough into the transaction so that the borrower has to accept the real terms because it is too costly to back out. Or worse, that they risk losing the home they want because of the additional time it would take to make a change.
What these borrowers need to focus on is the person with whom they are working.
A good mortgage originator will ask questions before quoting rates and fees and programs.
What is your credit score?
How long do you intend to own the home?
How much equity or down payment is there in the transaction?
Are you interested in a fixed rate loan or are you open to adjustable rates?
Would you rather keep fees as low as possible, or are you interested in a lower rate by paying loan fees?
Can we document all of your income to qualify, or do we need to consider stated income or no documentation loans?
What is important to you about your home financing?
What would be the best outcome that you could envision for this transaction?
The answers to these types of questions help the originator and the borrower create a framework for proposals and discussion. It is a client-focused approach, with the understanding that the best match possible needs to be made between what the clients wants and needs and what is available in the mortgage market.
A good mortgage originator is willing to take the time to make sure you understand what you are getting.
A good mortgage originator is able to clearly explain how the recommended home loans work, and the advantages and disadvantages of each.
A good mortgage originator is patient, understanding that obtaining the right loan is an important decision on your part.
Hearing the best terms from the wrong person can only lead to disappointment, headaches and higher costs.
Hearing competitive terms in a suitable program from the right person can lead you to a proper decision for yourself, a comfortable process and many times a truly less costly experience.
Look for the caring, experienced mortgage originator that wants to help you find a program suited to your needs. You will remember the quality of that experience long after the close of your transaction.
the person is everything!
The call starts out with the best of intentions:
"What are your rates and fees for ..."
The borrower wants to do their homework.
They want to get a good deal.
They don't want to overpay for the home loan.
They want to believe what they are being told.
When I receive these calls, I am concerned for the borrower. I know that in many cases they are setting themselves up for a disappointment, because their focus is on the wrong thing. They want to feel good about getting the lowest rates and fees at the time and not leave any money on the table.
But, the less scrupulous lenders out there find it easy to tell the borrower what they want to hear, and then deliver the real terms when the borrower is too deep into the transaction to comfortably make a change.
They do it by telling them "today's rates". Unless the file is already approved and ready to go to loan documents, "today's rates" can't be delivered to the borrower.
They do it by quoting an interest rate, but not discussing fees.
They do it by quoting terms that may include a prepayment penalty and not mentioning it, whether that it something that is acceptable to the borrower or not.
They do it by quoting monthly payments that conveniently ignore how long the rate and payments are guaranteed. The borrower may fall in love with the low payments and not understand (until it is too late) that it is an adjustable rate loan which may or may not meet
their needs.
They do it by intentionally lying about the availability of rates and programs with the hopes that they can get deep enough into the transaction so that the borrower has to accept the real terms because it is too costly to back out. Or worse, that they risk losing the home they want because of the additional time it would take to make a change.
What these borrowers need to focus on is the person with whom they are working.
A good mortgage originator will ask questions before quoting rates and fees and programs.
What is your credit score?
How long do you intend to own the home?
How much equity or down payment is there in the transaction?
Are you interested in a fixed rate loan or are you open to adjustable rates?
Would you rather keep fees as low as possible, or are you interested in a lower rate by paying loan fees?
Can we document all of your income to qualify, or do we need to consider stated income or no documentation loans?
What is important to you about your home financing?
What would be the best outcome that you could envision for this transaction?
The answers to these types of questions help the originator and the borrower create a framework for proposals and discussion. It is a client-focused approach, with the understanding that the best match possible needs to be made between what the clients wants and needs and what is available in the mortgage market.
A good mortgage originator is willing to take the time to make sure you understand what you are getting.
A good mortgage originator is able to clearly explain how the recommended home loans work, and the advantages and disadvantages of each.
A good mortgage originator is patient, understanding that obtaining the right loan is an important decision on your part.
Hearing the best terms from the wrong person can only lead to disappointment, headaches and higher costs.
Hearing competitive terms in a suitable program from the right person can lead you to a proper decision for yourself, a comfortable process and many times a truly less costly experience.
Look for the caring, experienced mortgage originator that wants to help you find a program suited to your needs. You will remember the quality of that experience long after the close of your transaction.
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