The old credit bureaus; now there’s something you associate with words like: honorable, integrity, safe, organized, basically looking out for the average Joe...Oh, wait a minute, that’s nowhere close!
The Bureaus, specifically Equifax, first entered the scene in 1899. They have operations in forty countries and have annual revenues in the multiple billions; all while servicing a billion individual files. Experian is the only one based overseas, in Dublin, Ireland.
After 60 years in business Equifax was continuously being shaken by scandals..... read more
Beware of Hackers!
How many times has your personal information been exposed to hackers?
The question, in and of itself, is bad news. Notice how the question is phrased: "how many times" and not "what are the chances!" According to the New York Times HALF of all American adults have had their personal information exposed to hackers in the last YEAR alone..... read more
Credit Scores....does it matter when purchasing a home?
How much does your credit score really cost you?
Rates fluctuate. Below you will find example rates pulled off the MYFICO website. Regardless of what rates are, these general rules typically apply. For the most part, when you’re in the low 600 credit score range, you lower your interest rate by a half point for every 20 point increase to your credit score ($75 a month or $27,000 over the life of your loan (for a 250k loan)). Once you’re above a 660....read more
Although the following story seems like a joke you would tell at a bar it’s actually something that we encounter all the time. We’re going to hide the identity of these people by calling them Bob and Mary.
Now Bob isn’t a very likeable character and eventually Mary decides to call it quits after five years of marriage. In the courthouse going through the divorce proceedings it almost seems to Bob like the judge has a crush on Mary because things just don’t seem to be going his way, after all, Mary was rewarded the kids, the car and the house and poor Bob seemed to be just left with the credit card debt.
Life moved on with old Bob though, and even though his was living at a Motel 6 and riding a skateboard to work......read more
There are a lot of scams out there these days, none that we find as frustrating though as the infamous online credit score! Here we have one of the all-time greatest inventions to rip off the average consumer, why isn’t anybody creating a fuss about such a magnificent scam? The reason is because almost nobody understands how it all works and the powers to be keep it all very hush hush.
How many people have checked their scores lines online at some point? There is no great data on this but we are thinking the majority of everyone has checked their scores online. Now, out of all these millions of people, how many could use these exact scores for lending purposes? We are going to go with 0, give or take. This is due to the fact that online scoring models, even the ones provided by the bureaus themselves, are completely different.....read more
Credit Tip for Lenders
This credit tip is directed solely towards our precious mortgage professionals. There are many laws governing the credit restoration industry, so many in fact that there are considerable conspiracy theories that suggest that there are many mega entities out there that would really be better off if the people had no credit representation (bureaus, creditors, banks, etc.). A fun and extreme example of this is in the state of Oregon a credit restoration firm is only allowed to charge a maximum of a $100 no matter how big the client’s caseload. Good news for the Oregonians correct? Not so much...this means that they are pretty much out there fending for themselves as it costs more than a $100 to do much of anything these days. Anyways, these examples go on longer than you might care to read about. The question becomes: "Why should all our mortgage professionals care?"
We have it on very good authority that substantial numbers of Attorney Generals are currently investigating and targeting mortgage professionals and their companies, who are personally practicing credit repair without a license. This includes anywhere from simple advice....read more
Do's and Don'ts - Credit Plan!
Underwriting. Now that’s a word that makes any mortgage professional get the chills. Let’s say it again...underwriting...brrrr...those blasted pencil pushers just making all our lives more miserable. Over 90% of our clients are seeking a loan approval for a home. This has naturally turned our business model into a niche specialty. So, whether it’s underwriting issues or last minute bad credit ideas, today’s credit tip will focus on the largest mistakes clients and their mortgage professionals make when trying to get their credit ready for closing....read more
To Pay or Not to Pay
As Shakespeare almost put it, To Pay Or Not To Pay, that is the question:
When it comes to your credit scores, paying the right account or the wrong account can make a massive difference in your credit scores. Today let’s focus on what not to pay. One would assume when paying off bad debts on your credit report, the credit scores would always increase. However "one" is not always correct. Paying off items like.....read more
Charge Offs - how do you handle them
Question: Have you ever wanted to know what the real difference is between a Collection, a Charge Off and a Profit & Loss on a credit report?
Answer: The quick answer is that there is a huge score impact difference between them. First off, you need to categorize a Charge Off and Profit & Loss (P&L) into the same group on a credit report where the difference is just mere accounting terminology. However, the difference between a collection and the other two can be enormous.
Let’s take a look out how accounts can be classified on a credit report......read more
Collections - Fix Them!
Question: When a collection or another derogatory item is deleted from the credit report how much will the score increase? The answer, go figure, is that it depends. The question that should be asked is what are the factors that it depends on?
Answer: A derogatory account can weigh as little as 0 points on your credit score! But don’t get too excited because you actually don’t want your derogatory items weighing nothing. On the other side of the scale you could lose up to 175 points with one.....read more
Collections part two:
Problem: Clients come to us all the time asking us why their collection is still showing a balance on their credit report despite the fact they paid it some time ago.
Answer: Think about it, because it’s a nice little conspiracy.....read more