Hey Gang,

Here is a new video that we just shot with the wonderful folks at Core Media Group.

With 2010 underway, I must point out to my readers the realities and differences of what a good credit score is and what a GREAT credit score is. It is now more important than EVER that you re-evaluate what you think is a high FICO credit score and what lenders think is a high credit score. If you have low scores, you must repair credit report now.

With historically low rates, many homeowners are watching closely for the right time to refinance their mortgages. Those with good credit may well recall the comfort in knowing that they could get approved by just about any mortgage broker at the most attractive rates.

Not anymore…

A few years ago, a score of 620 or higher was good enough. That increased to 680 in early 2008. Then it jumped to 720 in April last year and 740 in August!

In the past, any score of 700 or higher would get a double thumbs-up from credit experts. Now, rate adjustments begin kicking in at 740, with every 20-point drop adding another adjustment.

In other words, many people who were taking pride in their credit habits either must pay significantly higher or try to make quick changes to nudge their scores upward. What used to be great is now only good. Refinancing that would have worked a year ago might well not make sense.

I have students & clients all the time who literally wind up with a score of 739, 719, 699, 679 … and it costs them money to either fix it or pay for it!

One of my recent students, who always had a score of about 740, went to do a refinance and found her current score at 719. The reason was, she put a new washer and dryer on a store credit card.  Many store cards are actually revolving credit, and your limit may well be equal or about equal to the purchase you’re trying to make that day.

Another reader of my program, Crushing The Credit Bureaus was interested in lowering the rate on an existing mortgage, the borrower could verify substantial income, assets and personal credit history, but the borrower’s credit score had taken a hit after co-signing an auto loan for his son that had not been paid timely.

As a result, the borrower, who otherwise met every other criterion, was unable to refinance the loan at a rate that made economic sense for the lender.

Another wrinkle in today’s market: Even those with FICO scores of 740 or higher are penalized for buying in a geographic market on the downswing. The scary part about this is that  this adjustment affects all borrowers, regardless of score, if in a declining market.

In many cases, the added costs of rate adjustments are enough to make a refinance that would otherwise make sense have no benefit to the borrower.

How Did This Happen?

The nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac, suffered major losses in the market last year and then redefined risk, announcing price adjustments for borrowers with FICO scores below 720.

And, in case you were wondering, these fees have nothing to do with your mortgage company or its various products and cannot be negotiated away.

All mortgage bankers, brokers and credit unions must comply with the higher interest rates and delivery changes in all traditional mortgages. Only entities intending to hold the mortgages in their own portfolios can follow their own guidelines.

Worse news may be coming down the road. There are many factors, including proposed legislation and regulation, that continue to change the mortgage lending landscape. In the near term, it is more likely that this benchmark will continue to rise than fall.

Some of you may have heard about these new credit restrictions, but the actual cost to is often a surprise when you sit down with a broker.

Today’s new lending requirements:

• Great credit.

• Stable job, with a minimum of two years of employment.

• Reserves after closing, including a minimum of two to six months of mortgage principal, interest, taxes and insurance.

• Down payment from the borrower’s own funds.

• Low debt-to-income ratio. The required ratio varies between banks but is generally less than 40 percent, according to many in the industry.

• Good loan-to-value percentage. It also varies, but it’s often cited as less than 80 percent.

Having equity in your home is a major factor in getting approved for a refinance and in finding the best rate. The more equity in the home, the less risk there is to the lender if the home is repossessed.

What Steps To Take To Improve Your Credit Score

What can a homeowner who wants to refinance do with a good FICO score that’s not good enough?

Virtually everyone can raise their scores by at least 10 (points) to 20 points, sometimes significantly more in 30 days.

Here’s what to do.

1. Find out what might have gone wrong. Applicants should know their credit score, understand what it means to their loan rates and ask their loan officers to use credit analysis on their behalf. Credit analysis tools are a simple way to identify key score influencers by scrutinizing the information contained in each of an individual’s three credit reports to look for inconsistencies, errors and omissions that may artificially depress the score.

2. Correct any inaccuracies. You can raise your credit scores if something is reported inaccurately and there is proof of a discrepancy.

3. Decrease the percentage of available credit used. This can be done by paying down balances or increasing credit limits. Ideally, this means keeping balances as close to zero as possible, and definitely below 30 percent of the available credit limit.

I have personally seen people increase their scores by as much as 90 points or more, simply by paying off the right cards!

4. Move things around. If one income can be used to qualify for the loan, transfer accounts to “park” the debt in the other party’s name.

5. Get a rapid rescore. It’s the only way to find out fast if an attempt to improve a score was successful. It’s done through your lender and a rescoring company. The process takes about a week, but it can get the loan process back on track. The downside is it costs a few hundred dollars. The credit bureau Experian has seen an increase in rapid rescoring requests.

Aside from working toward a better score, there are two additional options;

One is paying points to buy down the interest rate. This is only a good idea if the borrower will then live in the house beyond the break-even point, meaning the time where the money they’ve paid in points is made up for by way of less expensive monthly payments.

Two, shop around. Some lenders have loans, known as “portfolio” loans, that aren’t subject to blanket rules on credit scores because the lender intends to keep them rather than sell the loans in the secondary market.

In a perfect world, anyone contemplating a refinance or a new mortgage anytime within the next year or so would start working on getting the ideal credit score now..

Happy New Year!

2010 Secrets to Success

When I was going through my credit nightmare a few years ago and trying to figure out how to improve credit score myself, I was searching for anything and anyone that could help me!

I needed to know I could overcome the bankruptcy on my credit report as well as all of the other negative info I had

There wasn’t much available back in 2001. Google was still in it’s infancy, and the search engines that were available were not that good.

I did however find one great source of inspiration and it has stayed with me over the years.

Investor’s Business Daily publishes this list every now and then and I’ve republished it here for your review.

IBD’s 10 Secrets to Success

Make Every Day in 2010 Count!

Mark

I hate to say  ”I told you so…” but I have been warning my readers for awhile.

Well…last week the Secretary of Housing and Urban Development (HUD) testified before the House Committee on Financial Services to address several policy changes to improve the financial performance of the Federal Housing Administration (FHA).

In case you didn’t know, thanks to the mortgage meltdown over the last two years, FHA is the best way…and in some cases…the only way to get a mortgage after bankruptcy.

What does this mean to you?

It looks like the FHA is planning to hold lenders liable for loan losses.

Translation…It will cost you more money to close a mortgage.

In addition, FHA also plans to tighten its underwriting standards. These changes will include…

1. Raising minimum FICO scores for new FHA borrowers
2. Increasing the borrower’s up-front cash requirement
3. Increasing mortgage insurance premiums

Translation number two…If you’re in the market to finance a home, do it sooner rather than later.

Usually when FHA proposes changes, it’s another way of saying that they’re coming soon—real soon!

Probably by the end of  January, 2010

There is a way to get “grandfathered” in…if you submit your credit application to an FHA lender and get approved. Once you do that, you’re in (using the current guidelines).

Welcome to the new credit economy,

To review the HUD secretary’s entire testimony, go here.

Until next time,

Continuing on with our series of common credit repair myths:

Myth #2 – I Can Easily Fix My Own Credit

The is the biggest myth about credit repair. Credit bureaus want you to believe this because they know you cannot achieve the same results alone as you can with professional ore experienced  guidance. This benefits them, but can only hurt you. They will even give you forms and web pages to use, but rest assured, these are deliberately designed to be ineffective, because they don’t want you to repair your credit.

Disputing the credit report is easy. Getting results (and actually repairing bad credit) can be difficult, complex, and infuriating. The truth is, you CAN attempt credit repair without experienced help. You can also perform surgery on yourself, although it probably wouldn’t be wise. It’s also not wise to attempt to correct your own credit report without the proper information and guidance.

Why go it alone, when for less than a hundred bucks you can benefit from the best credit repair program in the country? Go to www.CrushingTheCreditBureaus.com to learn more, including FREE tips on how to repair credit report fast and improve your credit scores!

Mark

It seems every day that the question about credit repair and the myths surrounding it comes up in conversations I have with friends, family and colleauges.

I have decided to answer the 10 most popular myths here on this blog.

Myth #1 – Credit Repair Isn’t Legal

Not only is credit repair  legal, you are guaranteed these rights by the Federal Fair Credit Reporting Act. The credit bureaus try their best to undermine the process, but it was their misdeeds that caused the law to be passed in the first place. The Fair Credit Reporting Act is your defense against them.

The Federal Trade Commission receives more complaints against credit bureaus than any other type of business. If you call the FTC today to report a complaint about the credit bureaus, their phone mail system will ask you to press one if your complaint is about the credit bureaus, and press another number if your complaint is about anything else. Clearly, this situation evolved out of deep consumer frustration with the uncooperative nature of the credit repair process.

Not surprisingly, the credit bureaus have declared war against companies that help people repair their credit. The bureaus criticize these companies in the media and send anti-credit repair literature to anyone who they suspect is getting help.

Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. The credit bureaus do everything in their power to discourage consumers from making progress with their credit repair and improve credit score , so you need to do whatever you can to protect your interests.

Until Next Time

Mark

If you have bad credit, here are 3 simple choices for you to make about credit repair:

1. WAIT  7-10 years for items to come off your credit report

2. PAY  2x to 3x the normal interest rate on everyday things

3. ACT  Take matters into your own hands and repair your credit report !

There is simplicity in being brief

Your credit score expert

Mark

With the upcoming 2010 Census process beginning to ramp up, I wanted to share some helpful advice for my readers.

The first phase of the U.S. Census is underway and temporary workers have begun verifying the addresses of households across the country.  Eventually, over 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race and other “relevant” data.

Being the suspicious person that I am, I have a question…”How Do You Tell The Difference Between a U.S. Census Worker And a Scam Artist?” My fear is that most folks are law abiding and will offer up data that they shouldn’t because they want to comply with “Official Government Business”.

Here are some tips to protect yourself (especially sensitive data that could be used to access your credit):

• If an official U.S. Census worker knocks at your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentially notice. Ask to see their ID and badge before answering ANY questions. Also, be smart and don’t invite anyone you don’t know into your home.

• Census workers are currently only knocking on doors to verify address information. DO NOT give out your Social Security number, credit card or banking info to anyone, even if they claim they need ti for the U.S. Census. If someone asks you for this info under the guise of “Official Government Census Business”…you can politely tell them to “Go Fcuk Themselves” or like we do in Texas, aim your favorite caliber “lead delivery system” and give ‘em a count of three to get off the porch!

• REMEMBER, NO MATTER WHAT THEY ASK, YOU ONLY NEED TO TELL THEM HOW MANY PEOPLE LIVE AT YOUR ADDRESS – THAT’S IT!

• While the Census Bureau might ask for basic financial information, such as salary range, YOU DO NOT HAVE TO ANSWER ANY QUESTIONS ABOUT YOUR FINANCIAL SITUATION. A legitimate Census Bureau worker will not ask for bank account, credit card numbers, nor will employees solicit donations.

• Finally, the Census Bureau has decided to NOT work with ACORN on gathering this information. If you haven’t been following the news the past few months, this organization was finally caught on videotape performing highly questionable community service advisement.

Eventually, the Census Bureau may contact you via telephone, mail, or in person at home. They WILL NOT contact you by e-mail. So be cautious for email scams impersonating the Census Bureau. Never click on ANY link or open attachments in an e-mail that are supposedly from the U.S. Census Bureau.

For More Information on avoiding identity theft and credit fraud, visit www.bbb.org or www.CrushingTheCreditBureaus.com

Mark

Even though most mainstream news programs keep talking about “recovery” in the job market and in the housing market, those of us who don’t take such news at face value realize that the truth is not being reported.

In my research about the housing market prospects for 2010, I came upon this fantastic article by Mark Hanson over at the Mortgage Fanatic Blog

Click Here To Read The Full Story:

Stay Informed!

Mark

If you want to improve credit score, you must have a detailed, actionable plan with step-by-step methods and knowledge on exactly “How To Repair A Credit Report!”

To start the process known as credit reports repair, type the term “fix my credit score” or ” clean up my credit report” into your favorite search engine. Conduct this search and see what pops up, and ask yourself “How do I fix my credit score as quickly as possible?”

Why are Scores Important?

Credit scores are very important in our society and without a positive score you might be paying higher interest rates. This is a serious thing since your credit determines so much of your life in today. Credit can effect your ability to buy a home, rent an apartment, buy a car, or be employed or approved for a promtion.

Many people have negative items on their credit report that can be fixed. Some people don’t even realize that they have bad credit until they apply for a loan and a lender checks their credit report. Anyone who has tried to fix an error in a credit report knows that it can be a slow, tedious process. Yet some companies promise to fix credit mistakes in 72 hours or less. If you’re being offered instant credit repair directly, its almost certainly a scam. Repairing your files takes some time, but is reasonably easy. Are you ready to improve your financial lifestyle today by improving your credit history?

The Credit Repair Process

Repairing credit is not a job that can be rushed. Exactly how to begin repairing it starting today. Credit repair companies can help you figure out the right pathway for fixing your credit score, but if you feel comfortable you can execute the steps on your own. So how do you know who to use for credit reports repair. If your FICO scores are a mess consider getting professional assistance. Most trustworthy repair companies in the industry offer a FREE, no obligation consultation. A Certified Specialist will work with you to create a customized plan based on your specific credit situation.

What Exactly Are FICO Credit Scores:

FICO scores range from 300 to 850; the median score is 723. Even though Fair Isaac has published the main factors that affect FICO credit scores,many still wonder what will happen to their credit scores if they cancel credit cards or sign up for new ones. Many factors affect your FICO® scores and the interest rates you may receive. The first step would be to know exactly what your credit scores are. Unfortunately, there’s a lot of misinformation floating around about credit scores. There is absolutely no reason for you to have to struggle any more with your credit scores. The reporting system in this country is far from perfect and because of it, millions of Americans have credit scores that are not accurate assessments of their risk. Yet, most people don’t even know their scores, much less know how to make them better.

Plan The Work & Work The Plan

Listen, with today’s economy the way it is, having respectable credit scores are a must in our financial society. If you do nothing nothing will happen, collections, charge-offs, and late payments remain on your credit report for 7 years. Bankruptcies remain for at least 10 years. This is equivalent to your credit file serving time in financial jail. Some tips to get started:

1. Acknowledge the problem
2. Develope a Plan ( Get professional Help or Do It Yourself)
3. Get Your Reports
4. Make Decisions on Accounts ( Debt Reduction, Negotiations, Repayment Plan)
5. Track Your Progress
6. Stick to the Plan!

Repairing your credit reports isn’t easy, but then again it’s not rocket science. With some effort, dedication to resolve your situation, time, and energy it can be accomplished.

Until Next Time,

Mark