Credit REPAIR-FACTS & FALLACIES

There is lot of information available about credit repair, but so much of it is conflicting, it’s easy to get confused. The credit bureaus themselves would like consumers to believe that there is nothing they can do to improve their credit ratings. There are unscrupulous credit repair companies that guarantee miraculous, instant jumps in credit scores… and then there are legitimate credit repair agencies that provide services that give consumers realistic and reasonable results.
To help clear up some of the confusion, here are five facts and fallacies about credit restoration:

1. Only Time Can Change The Information on Your Credit Report.

FALSE.

The purpose of the Fair Credit Reporting Act is to give consumers the right to challenge the accuracy and fairness of information on their credit reports. Congress recognized that credit bureaus have a vital role in accessing the creditworthiness of consumers. The act was designed to ensure that consumer reporting agencies exercise their responsibilities with fairness, impartiality and a respect for the consumer’s privacy.

The result is a federal law that gives consumers the right to challenge the information in their credit reports.
The FTC has warned consumers to avoid using credit repair services. Why? Because in the past so many Americans have been deceived by them. Due to the number of people desperate for credit repair, inflated offers of overnight credit restoration target a large and eager audience. Most of these companies promise impossible results and fail to deliver after they have the customer’s money. In an effort to protect the public from being preyed on by such companies, the FTC has issued the sweeping statement that “Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.” However, this isn’t entirely true.

2. Accurate Information Cannot be Removed from your Credit Report.

FALSE.

The Fair Credit Reporting Act provides in part that a “consumer reporting agency is not required to remove accurate derogatory information from a consumer’s file, unless the information is outdated under section 605 [§ 1681c] or cannot be verified.” Section 609(c)(2)(E).

Did you notice the wording, “not required to remove”? There is nothing that prohibits credit agencies from removing accurate information. In fact, the Fair Credit Reporting Act lays out EXACTLY the situations in which credit bureaus are REQUIRED to remove an accurate item from a consumers report.

Why does anyone say otherwise? The banks want to know every derogatory event in a potential borrower’s credit history and the credit bureaus are in the business of selling negative information.

Congress recognized that consumers are bombarded with offers of easy credit and that good citizens should not be punished for every mistake they’ve ever made. Since the purpose of the law was to give consumers the right to challenge information in their credit reports, Congress left room for reporting agencies to remove even accurate information under certain circumstances.

3. Credit Reporting is Subjective.

TRUE.

There is no one number or report that defines your credit history.
There are three nationwide consumer reporting companies, Experian, Equifax and TransUnion. Each of these companies has its own sources of credit information as well as its own method for calculating a consumer’s FICO score.
FICO is short for the Fair Isaac Company. FICO scores range from 365 to 840. The higher the score, the better credit a consumer has. Anyone with a score of 720 or lower might benefit from credit repair services.

The way that FICO scores are calculated is shrouded in mystery. However, it is generally accepted that FICO scores are calculated on a scorecard on which several factors are given varying degrees of importance. These factors include: delinquencies, the number of new accounts, length of the credit history, the amount of unused credit available, and inquires requesting the credit report.

Since each of the three credit bureaus uses its own formula to arrive at a FICO score, they usually have different FICO scores for the same person. While some banks rely on only one FICO score, others look at all 3 and average them together.4. Credit Repair can be Instant and Guaranteed.

FALSE.

There are no instant fixes when it comes to credit repair. Even if you were to pay off all of your current debts, it would take at least a month for that action to be reflected on your credit reports.
So what is a reasonable period of time for a consumer to expect to see an improvement in his or her credit rating? Of course, it depends on the situation. And the consumer has to keep their credit in good standing going forward. Getting a new late payment reported will send credit repair efforts back to square one. A consumer’s goal is to convince the credit bureaus that the bad history is old information, and the new information accurately represents their current financial picture. Since credit bureaus tend to weigh most heavily the events of the last 12 or 18 months, depending on a consumers specific history, it is reasonable to expect that it may take 3 to 12 months to significantly impact a consumer score.

There is also an unpredictable aspect to credit repair. Of course, the skill of the person repairing the credit is one variable. But part of credit restoration depends on what each of the individual creditors and credit bureaus do. For this reason, the same type of request regarding the same kind of derogatory credit information can have very different results from one creditor to the next.

5. Lenders are the Only Ones Who Look at your Credit Report.

FALSE.

Running a credit check has become a common practice among a lot of businesses that deal with the public, not just lenders.
More and more, insurance companies are pulling their applicants credit reports before making a decision to issue or not issue coverage. The insurance industry justifies the practice by pointing to its finding that the likelihood a customer will file a fraudulent claim rises if that customer had a bad credit history. Of course, even if a consumer convinces an insurance company to issue a policy in spite of his or her bad credit rating, that customer is very likely to pay a higher premium that someone with a good credit.

Employers frequently check on their prospective employees histories. It’s very disturbing to think that a couple of derogatory reports on your credit report could keep you from landing a job, but it’s true. It’s not much comfort that any employer who rejects a job candidate because of his or her credit history has to notify that candidate in writing and provide him or her with a copy of their credit report.

There is now a law that requires insurance companies and employers to get written consent of the consumer before running their credit history. But this isn’t much protection. A potential employer can claim that a job candidate hasn’t completed their application until they sign the consent to have their credit report checked.

A bad credit report can negatively affect many aspects of your financial life. With something this important, it makes sense to get professional help with your credit repair. The result of any credit restoration effort depends in large part on how well a consumer complies with the repair program as well as the skill of the credit repair professional hired.

6. Anything a legitimate Credit Restoration Company can do for you legally, you can do for yourself at little or no cost.

FALSE.

Since Credit Restoration Companies work with numerous clients, the reputable ones have much more experience in dealing with creditors, the credit bureaus and collection agencies. As an analogy, credit dispute strategies can be much more complex than simply changing the oil in your car. Automobile mechanics can check the more technical aspects of your vehicle, such as your brake pads, rear differential fluid, etc. Another comparison would be representing yourself in court. It’s not impossible, but one small mistake could cost you. What if I were to say to you…

“Anything a legitimate attorney can do for you legally, you can do yourself at little or no cost.”
The same goes for a mechanic. In the end it comes down to the “cost to benefit ratio.” How much can I do myself based on my current skills and experience, and would I benefit by hiring someone to handle the more technical aspects of my credit report. The answer is almost always a resounding “yes.” A skilled credit restoration expert lives, breathes, and eats their work. They always have light bulbs going off in their head as to additional angles that can be used to get you the results you need, and as quickly as possible.

For example, some collection agencies can be very uncooperative. You just can’t “shake them”. They might ignore your dispute letter, and the credit bureaus might verify the account as accurate. What next? A skilled credit restoration expert will be able to bring you the persistence you need in getting negative items removed, as well as helping you add positive primary unsecured accounts to your credit report to immediately boost your credit score. This is why all consumers should consider hiring a professional.

Facts Consumers Should Know Before Considering Credit Counseling or Debt Consolidation

There is one topic which every time I write about it seems to generate some hate mail while at the same time spawning a flurry of wonderful praise from consumers. Of course, the hate mail is always from a few people that happen to own these “certain types” of businesses I discussed and those businesses of course are Credit Counseling or Debt Consolidation companies; of which many “claim” to be non-profit organizations.

You’d almost have to be an ostrich with your head stuck in the sand to not see or hear at least one advertisement a day from a Credit Counseling or Debt Consolidation Company. However, you can expect this to change and change soon. Since this is a topic that tends to “stir up” the owners of these businesses, I am going to take a different approach by NOT sharing my opinion, but rather, the opinion of others. I will start with the news media and the Internal Revenue Service:
“(NPR News, May 15, 2006).

The Internal Revenue Service is revoking the tax-exempt status of some of the largest credit counseling agencies in the country. An IRS investigation disclosed that the firms solicited business from people seriously in debt and that they didn’t provide counseling or consumer education, as required.

Prodded in part by a congressional oversight committee and consumer advocates, the IRS began investigating dozens of credit counseling agencies — most holding non-profit status — two years ago. IRS Commissioner Mark Everson says the companies “poisoned an entire sector of the charitable community.”
Everson says in many instances, companies were organized merely to funnel business to loosely affiliated for-profit companies. Many of the firms spend millions of dollars on commercials that urge anyone with debt to call them to solve their financial woes. And because tax-exempt organizations are not bound by the federal do-not call list, the firms were able to randomly call consumers, pitching their services under the guise of a non-profit counseling service.

The IRS investigations are also likely to affect consumers, thanks to a new bankruptcy law that requires consumers considering bankruptcy to get counseling before they are allowed to file. The IRS wants to ensure that only legitimate non-profit agencies are doing the counseling. In addition to the actions announced Monday, the IRS is sending more than 700 compliance letters to the rest of the credit counseling industry (END).”

Since almost all Credit Counseling and Debt Consolidation companies claim a non-profit status, I feel most consumers are easily sucked in with their skepticism and defenses at bay. After all, when most of us hear the word “non-profit” the first thing we usually think of is a church or homeless shelter.

From the NPR article and the actions of the IRS, I think it’s fair to assume that many of these “non-profit” organizations have been operating under a scenario similar to that of a wolf guarding a hen house. However, this doesn’t mean all credit counseling and debt consolidation companies are bad but… you do need to know the truth about how they operate and their limitations.

The first thing you want to understand is these companies are ALL more interested in making money off you than they are in preserving your credit rating. The bottom line with either credit counseling or debt consolidation is that it absolutely ruins your credit. I can just hear the companies arguing this with a consumer right now, telling them nonsense like “It helps your credit since it tells creditors that you’re working on your situation and not just running away from it.” Listen… if one these places tell you that, than watch out. Why? Because they will lie to you about other things as well!

One of the first actions these programs usually require you to do is for you to CLOSE all your revolving credit accounts. You then make payments to the organization and they take care of everything for you. What this says to all your creditors (as well as anyone considering giving you credit) is that you are so out of control with your finances that you can’t even manage paying everyone back on your own. Therefore, you’re hiring someone else to do it for you!99% of the time these companies will claim they can negotiate with your creditors and get interest rates reduced thereby saving you money. While this is true, what’s also true is you can easily negotiate these same rates as well as they can by just calling your creditors yourself. You’d be amazed at how many of your creditors would love to hear from you (especially when the chips are down!). Not too mention, any money the counseling company was to save you would more than likely be sucked back up by their monthly fees (usually around $500 to $1,000 per year).

This brings us into a whole other dynamic of their business model. Because these companies always make their money off of monthly fees paid by the consumer, the longer they can keep those monthly fees coming in the more profitable their business will be. It’s for this reason that most consumers who sign up with these companies usually find themselves on payment plans with the lowest monthly payment possible (which turns out to also be the LONGEST payment plan as well). Not surprising is it?
Am I against Credit Counseling and Debt Consolidation companies? Absolutely not. After all, there are millions of people in America who will never be able to manage their finances. Credit to them is a destructive addiction much like alcohol or drugs and they will never be able to control it. Instead, it will always control them. We’ve all seen these people. Every time they are extended credit shortly thereafter they are in financial trouble (usually blaming it on some external factor). For these people I think these credit and debt counseling programs can be a good thing (as a ruined credit report is not a hindrance to them but actually an asset). It keeps them out of future financial trouble by forcing them to live their lives on a “cash and carry” basis; which is ultimately conducive to a better standard of living down the road.

On the other hand. If you’re good with your finances and have control with credit but went through some type of hardship beyond your control in the past (i.e. divorce, job loss etc); then the services of these companies will never be for you. You will do far better and preserve your credit rating by taking matters into your own hands. Reason being is that you understand your credit rating is a powerful tool that can help you move ahead faster, help others and help yourself as well as create the life you want. It all comes down to self-management. We all know that others will ultimately manage those who cannot manage themselves. Credit is no different. When you learn to manage it well, you are the master and it is the servant.

If you care about your credit and want to benefit from it in the future, then you will never rely on a credit or debt counseling service to help you get out of any trouble you find yourself in. Instead, you’ll look inward and get yourself out while preserving your credit rating the best you can. Credit and debt counseling is for people who are “ok” with throwing their credit rating in the trash so they can have “someone else” manage their payments for them (since they are unable to manage them themselves). And again, as far as negotiating interest rates, you can do just as good as them or better. If you don’t believe me just call any of your creditors and straight out tell them your situation. You will quickly find you don’t need to be afraid of them. They just want to get paid like the rest of us.

The Truth About Credit Repair

Have you ever wondered what companies send you when they claim you can erase your bad credit overnight? How about those ads that say you can get any major credit card 100% Guaranteed regardless of your credit?

Ads abound almost everywhere (online and off) selling books, systems and secrets to help you fix your credit in a hurry. Many of these programs have claims that read like the covers of supermarket tabloids “In 3hrs my credit score jumped from 580 to 676!”… “Erase bad credit and smash your debts with just 2 Magic Letters!”. “Create a completely new credit file in 24hrs!” Are these types of claims ALWAYS too good to be true? The answer is “Yes and… no”.

While many people would love for you to believe that the only thing that can fix bad credit is time; in reality… nothing could be further from the truth. The fact is, time is only one factor that will fix a credit report (but it’s a far cry from being the only factor). How can I back this up? Easy. Under a consumer protection law known as the Fair Credit Reporting Act (a.k.a. the FCRA) the only negative information that can remain on your credit report is not what is accurate… but what can be proved as such. What’s this mean to you?

It means any negative item on your credit report can only remain there if it is accurate and CAN BE PROVED AS ACCURATE under the guidelines of the FCRA. This undisputable fact presents consumers with both good news and bad news. The good news is that through the FCRA your credit score can most likely be improved dramatically in a very short period of time with only a modest amount of effort on your part.

The bad news is that while the actual “work” will take very little of your time, it is vital that you have good information on “how” to go about it. This is the bad news; 9 out of 10 courses on restoring your credit will do nothing more than lead you into a snake pit. This is because they provide you with out-dated “Boiler Plate” dispute letters, which are rarely effective. These are nothing more than form letters and… quite frankly (more bad news) the Credit Bureaus and Creditors will laugh at you if you try to use them.

While I agree with the Federal Trade Commission (FTC) that “Anything a Credit Repair Clinic can do for you legally, you can do for yourself at little or not cost”… the key element you need for success is the latest inside techniques and procedures to get the results you want. These involve strategies known as “Proof of Contract”, “Constructive Notice”, “Challenge of Procedure” or “Restrictive Endorsement” and many others.

All these terms may “sound” impressive but they are really quite simple. In the end, it is nothing more than a method of communication, which exercises your consumer protection rights, gets the results you want and raises your credit score. Even more impressive, once you learn how simple it can be by doing it for yourself, you will find there is a fortune to be made doing it for others! Either way, it all starts by requesting a free copy of your credit report by calling the Annual Credit Report Service at 1-877-322-8228.

The Biggest Mistake I Made When Starting Out In Real Estate

When I was new to the real estate business I of course made mistakes.  Everyone does.  Although I often make little mistakes, nothing compares to this major one I was making over and over again.

 

The biggest mistake that I made was not figuring out how to bring in money for the short term that would keep me going for the long term.  I’m sure that everyone knows how expensive starting a real estate business can be.  Not only do you have to have money to get into the business you have to have money to carry you for months (sometimes) before you get any business.

 

Most of the time that leaves very little money to start growing a business.  When I was new in the business I didn’t have a clue about advertising and marketing.  I ended up throwing thousands of dollars down for magazine ads that never returned any business.  I quickly realized that I wasn’t going to last long if I continued to throw away money on bad advertisements.

 

Luckily for me I got a couple of deals done right away that kept me in business and out of the poor house.  After that big mistake of advertising I knew that I would have to come up with a better solution if I was to stay in the business and also to be able to grow my business. 

 

I looked outside the real estate industry for ideas and inspiration to discover what I was missing for success in real estate.  What I discovered was what I now call my FUEL.  FUEL is what drives my business to the destination that I want.  What is my destination?  Financial freedom. Being able to work with whomever I want to work with and do what I want to do.  FUEL will get you there faster than you could ever dream.  You will not have to face the same fate that a lot of real estate professionals do with going out of business before they ever get started.

 

Now you have two choices to make one you continue to struggle to build your business or two you invest in yourself and educate yourself on what you need to do Today to start growing your business.   www.fuelyourpipeline.com

How knowledge will get in our way of becoming successful

http://digg.com/business_finance/How_Knowlege_Will_Get_In_Our_Way_Of_Becoming_Successful 

There are two types of knowledge that I want to talk about in this post that will get in our way of becoming successful and how to over come these obstacles, which will increase our likelihood of becoming successful.

The first part is our book knowledge.  What we read and learn in a classroom or on our own will set the stage for how we view new concepts or ideas.

The second part is our street knowledge.  This is more along the lines of what we have experienced both good and bad.  This usually is a larger factor than the book knowledge of how we view new or unfamiliar ideas and concepts.  Especially if we have had a bad experience, we are more reluctant to do it again.  Our emotions are more so tied to the street knowledge than book knowledge.

 Whether it be book or street knowledge, we will face obstacles in our minds that will limit our creativity or success.  If we have prejudged an idea going into it, do you really think that it will matter if that idea could change your life?  No!  Because regardless of the outcome we have already determined in our minds that it will or will not work! 

It is really too bad that we do this!  We possibly make a large mistake by not implementing an idea or concept that could change our life forever.

What we need to do first to change.  NEVER PREJUDGE AN UNFUMILUR OR NEW IDEA.  New ideas are what have made people great or had tremendous success.

WWW.BRONSONBARBER.COM

Do you let your knowledge get in the way of your success?