In my last post I went into some detail about the banksters. Today I found this article that explains much more about what's going on in our country. This article was written in 1998. My how things have changed since then! I believe that understanding money is the most important thing we can do right now. We don't have much time left. Americans need to wake up and understand what has happened to us. Our country will soon be ruled by total dictatorship if we don't do something about this. Copy and paste the link below to go to the article.
http://www.justiceplus.org/bankers.htm
Monday, October 19, 2009
Sunday, October 18, 2009
The Banksters
I've written enough posts to help you fix your credit report if you click on the labels that apply to your particular problem. Now I'm going to start a little history lesson for those of you who don't know how we got into this mess in the first place.
We hear a lot of sound bites on the main stream media about the federal reserve bank and Ben Bernanke. Until two years ago I thought the federal reserve bank was a government operation. They print our money here in the USA. They are federal right? Wrong!! They are part of an international private banking cartel. They took on the name of "federal" to make us sheeple think they are part of our government. They are no more federal than "Federal Express."
Do you know why that is so wrong for America? It's because our constitution calls for Congress to coin money and regulate the value thereof. Back in the day when the constitution was signed, the only real money was gold and silver. That's why the congress shall "coin" the money. There wasn't paper money. Paper money is called Fiat currency. When someone came up with the idea of fiat currency it was because carrying the weight of the coins around was a burden. The early dollars for example would say "one dollar silver certificate" which meant you could take that piece of paper to the bank and trade it in for the actual silver metal that equalled one dollar. They could never create a new paper dollar if there wasn't actual metal to back it's value.
In 1913 the Federal Reserve act was passed and signed into law by president Woodrow Wilson. Congress gave up their right to coin money for America to a banking cartel that has no allegiance to any country. Their sole purpose in life is to make a profit.
In that same year the personal income tax act was passed. Until that point, individual people didn't have to fill out a 1040 form and pay taxes. They didn't have taxes withheld from their paychecks. But the international banksters who were now printing money for the government were charging interest. How were they going to collect the interest? Through each individual paying a personal income tax!
When our country was started it was never intended for a day of your hard labor to be taxed! Why? Because it was thought that if you worked 8 hours you were trading your labor for an equal amount of pay. No profit was gained from that. It was just a fair trade. Taxes were only supposed to be charged on profits from a corporation, not charged to people for trading their labor in fair exchange for pay!
I used to think that our income taxes were collected to pay for things that Americans need like infrastructure. But this personal income tax only goes to pay the interest that we owe to the international banksters for the money that they print out of thin air and loan to our government! That's right. They create paper money out of thin air. The top edge of a dollar says "federal reserve note" instead of saying "silver certificate" because there is absolutely no silver or gold to back a fed note. The only value the fed reserve notes have is the value that you and I imagine they have. You can't cash them in for any metal anymore. We think they have value because we have been propagandized to believe it ourselves. And what is propaganda but a means to psychologically manipulate a population of people?
You might ask "How can Americans fall victim to propaganda?" We have the first amendment in our bill of rights that states we have freedom of the press. The press reports the truth freely to the public right? It's their duty right? Wrong!! We haven't had a free press probably ever! The Rothschilds family bought out Reuters in the 1800's who then went forward and bought the Associated press. These huge media news outlets are owned by the international banksters. We will only get news reported to us as they see fit. The main stream media now a days are simply media whores. Your favorite journalist will only have a career if they agree to report what the banksters want reported.
I'm posting this today because you need to start to wake up. You need to understand why you are in debt and why it was always pre-planned for you to become a debt slave. You and I really are slaves to the powers that be. Your birth certificate has a federal ID number on it that you can look up on the stock exchange to see how much you're trading for these days. Did you know that you are only a commodity on the stock exchange?
I'd like for you to do a youtube search for a movie called "Freedom to Fascism" by Aaron Russo. Just go to www.youtube.com and type in the name of the video. Watch all the parts. Think about what it means for you and your loved ones.
I'm faced with the fact that "conspiracy" is a word we all sort of back away from. Especially if it's combined with the word "theory." The Conspiracy theorist is pictured as wearing the "tin foil hat." I'm only going to send you to places that are "conspiracy fact" not theory. Everyone needs to be able to research for themselves instead of taking my word for truth, the main stream media, politicians, Aaron Russo with this video I mentioned, etc etc. If you don't like to do your own research then this blog isn't for you.
I will leave you with a quote from the house of Rothschild. "Give me the ability to control a nation's money and I care not who makes the laws."
We hear a lot of sound bites on the main stream media about the federal reserve bank and Ben Bernanke. Until two years ago I thought the federal reserve bank was a government operation. They print our money here in the USA. They are federal right? Wrong!! They are part of an international private banking cartel. They took on the name of "federal" to make us sheeple think they are part of our government. They are no more federal than "Federal Express."
Do you know why that is so wrong for America? It's because our constitution calls for Congress to coin money and regulate the value thereof. Back in the day when the constitution was signed, the only real money was gold and silver. That's why the congress shall "coin" the money. There wasn't paper money. Paper money is called Fiat currency. When someone came up with the idea of fiat currency it was because carrying the weight of the coins around was a burden. The early dollars for example would say "one dollar silver certificate" which meant you could take that piece of paper to the bank and trade it in for the actual silver metal that equalled one dollar. They could never create a new paper dollar if there wasn't actual metal to back it's value.
In 1913 the Federal Reserve act was passed and signed into law by president Woodrow Wilson. Congress gave up their right to coin money for America to a banking cartel that has no allegiance to any country. Their sole purpose in life is to make a profit.
In that same year the personal income tax act was passed. Until that point, individual people didn't have to fill out a 1040 form and pay taxes. They didn't have taxes withheld from their paychecks. But the international banksters who were now printing money for the government were charging interest. How were they going to collect the interest? Through each individual paying a personal income tax!
When our country was started it was never intended for a day of your hard labor to be taxed! Why? Because it was thought that if you worked 8 hours you were trading your labor for an equal amount of pay. No profit was gained from that. It was just a fair trade. Taxes were only supposed to be charged on profits from a corporation, not charged to people for trading their labor in fair exchange for pay!
I used to think that our income taxes were collected to pay for things that Americans need like infrastructure. But this personal income tax only goes to pay the interest that we owe to the international banksters for the money that they print out of thin air and loan to our government! That's right. They create paper money out of thin air. The top edge of a dollar says "federal reserve note" instead of saying "silver certificate" because there is absolutely no silver or gold to back a fed note. The only value the fed reserve notes have is the value that you and I imagine they have. You can't cash them in for any metal anymore. We think they have value because we have been propagandized to believe it ourselves. And what is propaganda but a means to psychologically manipulate a population of people?
You might ask "How can Americans fall victim to propaganda?" We have the first amendment in our bill of rights that states we have freedom of the press. The press reports the truth freely to the public right? It's their duty right? Wrong!! We haven't had a free press probably ever! The Rothschilds family bought out Reuters in the 1800's who then went forward and bought the Associated press. These huge media news outlets are owned by the international banksters. We will only get news reported to us as they see fit. The main stream media now a days are simply media whores. Your favorite journalist will only have a career if they agree to report what the banksters want reported.
I'm posting this today because you need to start to wake up. You need to understand why you are in debt and why it was always pre-planned for you to become a debt slave. You and I really are slaves to the powers that be. Your birth certificate has a federal ID number on it that you can look up on the stock exchange to see how much you're trading for these days. Did you know that you are only a commodity on the stock exchange?
I'd like for you to do a youtube search for a movie called "Freedom to Fascism" by Aaron Russo. Just go to www.youtube.com and type in the name of the video. Watch all the parts. Think about what it means for you and your loved ones.
I'm faced with the fact that "conspiracy" is a word we all sort of back away from. Especially if it's combined with the word "theory." The Conspiracy theorist is pictured as wearing the "tin foil hat." I'm only going to send you to places that are "conspiracy fact" not theory. Everyone needs to be able to research for themselves instead of taking my word for truth, the main stream media, politicians, Aaron Russo with this video I mentioned, etc etc. If you don't like to do your own research then this blog isn't for you.
I will leave you with a quote from the house of Rothschild. "Give me the ability to control a nation's money and I care not who makes the laws."
Tuesday, July 14, 2009
Foreclosure
Foreclosures show up under the public record portion of your credit report and can remain on your credit for 7 years. This is one of the worst things that can happen to your credit but it's not the end of the world.
Many people are losing their homes now a days due to the poor economy and rising unemployment. So much noise was made about sub-prime loans when the mortgage market imploded that it was hardly mentioned what the trickle down effect would be for everyone else. Now we are seeing the effect nationwide. Some areas have been hit harder than others. Some people simply walked away from their homes after the homes lost so much value that they couldn't justify paying for them any longer.
They will take a big hit on their credit score. One can't predict how many points their scores will drop. Everything in their credit history file will be weighed and measured I'm sure. And how fast their scores will bounce back will be effected by how they handle their other debts.
As with any other event that lowers your credit score, having a foreclosure will effect your interest rates on credit applications such as credit cards and car loans. Expect to pay higher rates and fees while your scores are down and out.
Currently to get a conforming home loan you would have to wait three years after a foreclosure before being able to apply. (That's even more of a waiting period than the bankruptcy waiting period of two years.) Mortgage rules and regulations change without notice from time to time so keep that in mind if you think you can go through a foreclosure and then wait three years to buy another home. These rules may not apply in three years!
After the 7 year waiting period, contact the three bureaus and ask them to purge the negative information from your credit report. Always remember that if you don't contact the bureaus, the negative stuff on your report might linger around forever.
Many people are losing their homes now a days due to the poor economy and rising unemployment. So much noise was made about sub-prime loans when the mortgage market imploded that it was hardly mentioned what the trickle down effect would be for everyone else. Now we are seeing the effect nationwide. Some areas have been hit harder than others. Some people simply walked away from their homes after the homes lost so much value that they couldn't justify paying for them any longer.
They will take a big hit on their credit score. One can't predict how many points their scores will drop. Everything in their credit history file will be weighed and measured I'm sure. And how fast their scores will bounce back will be effected by how they handle their other debts.
As with any other event that lowers your credit score, having a foreclosure will effect your interest rates on credit applications such as credit cards and car loans. Expect to pay higher rates and fees while your scores are down and out.
Currently to get a conforming home loan you would have to wait three years after a foreclosure before being able to apply. (That's even more of a waiting period than the bankruptcy waiting period of two years.) Mortgage rules and regulations change without notice from time to time so keep that in mind if you think you can go through a foreclosure and then wait three years to buy another home. These rules may not apply in three years!
After the 7 year waiting period, contact the three bureaus and ask them to purge the negative information from your credit report. Always remember that if you don't contact the bureaus, the negative stuff on your report might linger around forever.
Chapter 7 Bankruptcy
When you file a chapter 7 bankruptcy it's a fresh start, complete liquidation bankruptcy for the most part. You would still have to pay your government backed student loans or any other money you owe government such as back taxes. (You still have to pay your child support too.)
Chapter 7 will show up under the public record portion of your credit report. It will remain on your credit report for 10 years from the date that you filed for bankruptcy. Then it can be purged.
You need to send a copy of your bankruptcy documents to the three credit bureaus so they can update your report to show which accounts were included in the bankruptcy. If you don't take this step, your credit report will not necessarily show that your past due and collection accounts were included in the bankruptcy and that will make it even harder on your credit scores.
From the date you file for chapter 7 until the date it's discharged usually takes a few months. Most are discharged in 3 months but I've seen some that took a few months longer. It will depend on your personal circumstances. But two years from the discharge date (not the filing date) you may be able to purchase a home.
There are currently two types of home loans that allow you to try to qualify this quickly. They are the FHA home loan and the VA home loan for veterans or active duty military. You will have to establish a new, good credit history in this two year waiting period to prove that your finances are back under control. You can't have anything else derogatory happen to your credit within this two year period. And of course you would have to show that you have a solid work history and enough income to support the proposed new house payment.
I read somewhere recently that "Capitalism without bankruptcy is like Christianity without hell." And that being true, there were more people who filed bankruptcy in America last year than those who filed in the entire decade of the 1960's!
While filing bankruptcy can be personally humiliating, it is no longer seen as the most horrible deadbeat thing a person can do. You will pay a price to be sure. After bankruptcy your consumer credit card rates and car loan interest rates will be much higher for the first few years than rates for those who have good credit.
With the economy the way it is and the increasing unemployment we can expect to see the bankruptcy filings increase as well. If you want to learn more about chapter 7 and other bankruptcies click the link.
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
Chapter 7 will show up under the public record portion of your credit report. It will remain on your credit report for 10 years from the date that you filed for bankruptcy. Then it can be purged.
You need to send a copy of your bankruptcy documents to the three credit bureaus so they can update your report to show which accounts were included in the bankruptcy. If you don't take this step, your credit report will not necessarily show that your past due and collection accounts were included in the bankruptcy and that will make it even harder on your credit scores.
From the date you file for chapter 7 until the date it's discharged usually takes a few months. Most are discharged in 3 months but I've seen some that took a few months longer. It will depend on your personal circumstances. But two years from the discharge date (not the filing date) you may be able to purchase a home.
There are currently two types of home loans that allow you to try to qualify this quickly. They are the FHA home loan and the VA home loan for veterans or active duty military. You will have to establish a new, good credit history in this two year waiting period to prove that your finances are back under control. You can't have anything else derogatory happen to your credit within this two year period. And of course you would have to show that you have a solid work history and enough income to support the proposed new house payment.
I read somewhere recently that "Capitalism without bankruptcy is like Christianity without hell." And that being true, there were more people who filed bankruptcy in America last year than those who filed in the entire decade of the 1960's!
While filing bankruptcy can be personally humiliating, it is no longer seen as the most horrible deadbeat thing a person can do. You will pay a price to be sure. After bankruptcy your consumer credit card rates and car loan interest rates will be much higher for the first few years than rates for those who have good credit.
With the economy the way it is and the increasing unemployment we can expect to see the bankruptcy filings increase as well. If you want to learn more about chapter 7 and other bankruptcies click the link.
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
Chapter 13 Bankruptcy
This bankruptcy is also called the wage earner plan. This plan allows you to reorganize your debts and make payments to the bankruptcy trustee for a period of 3 years up to 5 years in some cases. Your monthly payment amount will be determined by what your current monthly income is and how much you can afford to pay. The trustee will take your monthly payments and distribute them amongst your creditors.
Chapter 13 will show up under the public record portion of your credit report. You will need to send a copy of your bankruptcy papers to the three credit bureaus so that they can show that each of your creditors have been included in the bankruptcy. Otherwise, it might look like you have unpaid past due or collection accounts that are not part of the bankruptcy. This will hurt your credit scores even more if potential lenders can't see what was in the bankruptcy and what wasn't.
Make all your payments to the trustsee on time each month to re-establish a good payment history.
After making 12 months worth of on time payments to the trustee you might be able to purchase a home, providing that you haven't had anything else derogatory happen to your credit since filing bankruptcy. You would have to qualify for the new house payment and you would have to obtain permission from the trustee to purchase a home but I've seen this work out many times.
A chapter 13 bankruptcy will stay on your credit report for 7 years from the date you filed it and then it can be purged. To learn more about chapter 13 click the link below.
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
Chapter 13 will show up under the public record portion of your credit report. You will need to send a copy of your bankruptcy papers to the three credit bureaus so that they can show that each of your creditors have been included in the bankruptcy. Otherwise, it might look like you have unpaid past due or collection accounts that are not part of the bankruptcy. This will hurt your credit scores even more if potential lenders can't see what was in the bankruptcy and what wasn't.
Make all your payments to the trustsee on time each month to re-establish a good payment history.
After making 12 months worth of on time payments to the trustee you might be able to purchase a home, providing that you haven't had anything else derogatory happen to your credit since filing bankruptcy. You would have to qualify for the new house payment and you would have to obtain permission from the trustee to purchase a home but I've seen this work out many times.
A chapter 13 bankruptcy will stay on your credit report for 7 years from the date you filed it and then it can be purged. To learn more about chapter 13 click the link below.
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
Student Loans
You will pay the government what you owe them!!
Most student loans are government backed. When you don't pay them they will go into collection and eventually show in default status as an unpaid government debt. I'm not sure how other creditors treat them but for home buying purposes, you could not get a conforming home loan if you were in default over any government debt!
How can you get out of default status? You will have to bring the past due amount current and in some cases, after you have brought it current you will need to keep making your monthly payments on time for a year before they will allow you to be considered no longer in default. They can also take any tax refund you might have been due until your debt is paid in full. So either pay them in full or bring them current and keep them on time for a year to get them out of default.
If you owe the government money you can't even discharge it in a bankruptcy! It's that serious!
Most student loans are government backed. When you don't pay them they will go into collection and eventually show in default status as an unpaid government debt. I'm not sure how other creditors treat them but for home buying purposes, you could not get a conforming home loan if you were in default over any government debt!
How can you get out of default status? You will have to bring the past due amount current and in some cases, after you have brought it current you will need to keep making your monthly payments on time for a year before they will allow you to be considered no longer in default. They can also take any tax refund you might have been due until your debt is paid in full. So either pay them in full or bring them current and keep them on time for a year to get them out of default.
If you owe the government money you can't even discharge it in a bankruptcy! It's that serious!
Judgments
One section of your credit report shows if there are any public records against you. Public records would be things that have been filed in a court somewhere. If you've filed a bankruptcy it will show under public records. If you have a collection account that went for so many months and you just didn't or couldn't pay it, the creditor may have decided to sue you. If they went to court against you (whether you were in court or not) they got a judgment against you.
Judgments look much worse on a credit report than unpaid collections and you usually won't be able to purchase a home as long as you have an unpaid judgment. You will have to call the courthouse where the judgment is filed in order to pay this off. I'm not aware of a court allowing monthly payments on judgments. They want it paid in full.
Once a judgment is placed against you, then your wages can be garnished and in some cases your bank accounts can be seized. Better to pay those off as soon as possible!
In all my years as a loan officer I did have one case where a man had just recently found out he was a father. An old girlfriend had come forward saying he was the father of her child from 12 years ago. A DNA test was done and it determined he was indeed the father. The court found that he owed 12 years of back child support. They placed an immediate judgment against him and set up monthly child support payments, a portion of which went toward the back child support. Even though he had a judgment against him for over $50,000 in back child support, he was able to show the documentation needed to prove that he had been paying all those child support payments on time as ordered for about a year. In other words, my loan underwriter could see that he wasn't a deadbeat. So he is the only one I've known who had a judgment and was still able to purchase his home with a conforming home loan.
I'm aware that when the sub-prime loan business was booming, anyone with terrible credit could get a home loan that was non-conforming with terrible interest rates and terms. But I didn't originate sub-prime loans. My customers couldn't purchase a home if they had unpaid judgments or unpaid child support except for the one man I mentioned here.
Judgments look much worse on a credit report than unpaid collections and you usually won't be able to purchase a home as long as you have an unpaid judgment. You will have to call the courthouse where the judgment is filed in order to pay this off. I'm not aware of a court allowing monthly payments on judgments. They want it paid in full.
Once a judgment is placed against you, then your wages can be garnished and in some cases your bank accounts can be seized. Better to pay those off as soon as possible!
In all my years as a loan officer I did have one case where a man had just recently found out he was a father. An old girlfriend had come forward saying he was the father of her child from 12 years ago. A DNA test was done and it determined he was indeed the father. The court found that he owed 12 years of back child support. They placed an immediate judgment against him and set up monthly child support payments, a portion of which went toward the back child support. Even though he had a judgment against him for over $50,000 in back child support, he was able to show the documentation needed to prove that he had been paying all those child support payments on time as ordered for about a year. In other words, my loan underwriter could see that he wasn't a deadbeat. So he is the only one I've known who had a judgment and was still able to purchase his home with a conforming home loan.
I'm aware that when the sub-prime loan business was booming, anyone with terrible credit could get a home loan that was non-conforming with terrible interest rates and terms. But I didn't originate sub-prime loans. My customers couldn't purchase a home if they had unpaid judgments or unpaid child support except for the one man I mentioned here.
Unexpected Collections
Just a quick post here to tell you about a pattern I saw becoming more widespread when I was a home loan originator. Often I would pull someone's credit report and find collections for parking tickets, unpaid overdue library book fees, and collections for movies you may have rented and either didn't return them at all or you didn't pay the late fees on them. Most of the amounts owed were ridiculously low but they ended up as unpaid collections anyway.
These are items that you might not think of as having to do with your credit so I thought it best to warn you. If you think you're doing a great job managing your credit, and yet you have a little something like an overdue library book fee, you better pay it or it could hurt your credit score when you least expect it!
These are items that you might not think of as having to do with your credit so I thought it best to warn you. If you think you're doing a great job managing your credit, and yet you have a little something like an overdue library book fee, you better pay it or it could hurt your credit score when you least expect it!
Unpaid Collections
When unpaid collections show up on your credit report they may be described as collections, write offs or profit and loss accounts. No matter what they're called they are collections and the company wants you to pay the money that you owe usually with penalties and interest tacked onto the debt. Here's how to handle them.
Call the company that you owe the money to. Ask them if they will settle the debt for less than what's owed. Many times they will. If they agree to settle the debt have them send you something in writing that you can keep for your records. It should state the terms of the settlement. For example, if you owe someone $2000 and they agree to settle this debt with you for only $1000, make them put it in writing before you send them any money. When you get the written proof you will want to make payment in a way that can be verified such as a check or money order or some way that has a paper trail for you to keep in your records.
Make a credit file and keep all your correspondence and proof in that file for later reference. After you pay the debt, the company should report it as a paid in full or settled in full account to the three credit brueaus. But if they don't report it, then you will have your proof in your credit file. You can make three copies of it and mail it to Experian, Transunion, Equifax and ask them to update your credit history.
Sometimes collections are in such large amounts that it's hard to pay them in one lump sum so you could ask the company if they will enter into an agreement with you to make monthly payments until you can get it paid off. For example: If you have a debt of $2000 and you don't have a large amount to settle this debt in one lump sum payment, you might arrange to start sending them $100 per month until you get it paid in full. Again, ask for the agreement in writing. Make all your payments on time and in the agreed amount so that you will be establishing a responsible track record with your new agreement. Keep copies of all your checks or money orders. When the bill is finally paid in full the company needs to report it to the three bureaus. If they don't, you will have your proof of payments so that you can report it paid. Make three copies of your proof and mail it in.
Always remember that the company you owe money to is not in a hurry to update your credit for you. You will sometimes be the only one who cares enough about your credit to see that it gets updated in a timely manner.
When you pay off an old debt it will remain on your credit report for 7 years from the date that it first went delinquent. But while it's sitting there for 7 years it looks much better to be showing as paid collection instead of unpaid collection!
I saw a financial guru on tv the other day that said some companies will work with you to delete an old account off your credit report after you've paid it off. He said to request a PTD letter which stands for "Pay to delete". So apparently there's a fee involved. I had never heard of this in all my 12 years as a loan officer but according to him it can be done. It might be worth checking into to see how much the company would charge you to delete that part of your credit history.
Call the company that you owe the money to. Ask them if they will settle the debt for less than what's owed. Many times they will. If they agree to settle the debt have them send you something in writing that you can keep for your records. It should state the terms of the settlement. For example, if you owe someone $2000 and they agree to settle this debt with you for only $1000, make them put it in writing before you send them any money. When you get the written proof you will want to make payment in a way that can be verified such as a check or money order or some way that has a paper trail for you to keep in your records.
Make a credit file and keep all your correspondence and proof in that file for later reference. After you pay the debt, the company should report it as a paid in full or settled in full account to the three credit brueaus. But if they don't report it, then you will have your proof in your credit file. You can make three copies of it and mail it to Experian, Transunion, Equifax and ask them to update your credit history.
Sometimes collections are in such large amounts that it's hard to pay them in one lump sum so you could ask the company if they will enter into an agreement with you to make monthly payments until you can get it paid off. For example: If you have a debt of $2000 and you don't have a large amount to settle this debt in one lump sum payment, you might arrange to start sending them $100 per month until you get it paid in full. Again, ask for the agreement in writing. Make all your payments on time and in the agreed amount so that you will be establishing a responsible track record with your new agreement. Keep copies of all your checks or money orders. When the bill is finally paid in full the company needs to report it to the three bureaus. If they don't, you will have your proof of payments so that you can report it paid. Make three copies of your proof and mail it in.
Always remember that the company you owe money to is not in a hurry to update your credit for you. You will sometimes be the only one who cares enough about your credit to see that it gets updated in a timely manner.
When you pay off an old debt it will remain on your credit report for 7 years from the date that it first went delinquent. But while it's sitting there for 7 years it looks much better to be showing as paid collection instead of unpaid collection!
I saw a financial guru on tv the other day that said some companies will work with you to delete an old account off your credit report after you've paid it off. He said to request a PTD letter which stands for "Pay to delete". So apparently there's a fee involved. I had never heard of this in all my 12 years as a loan officer but according to him it can be done. It might be worth checking into to see how much the company would charge you to delete that part of your credit history.
Co-signing
When you co-sign a loan for someone else you are responsible for the repayment of their loan just as much as they are.
If they become 30 days late on a payment it will show up as a late payment on your credit history too. So be very, very careful about becoming a co-signer for someone else's loan. Consider whether you would be able to make their monthly payments if they stop paying. If you are not prepared financially to make that extra payment then it's simple...Don't co-sign!
If they become 30 days late on a payment it will show up as a late payment on your credit history too. So be very, very careful about becoming a co-signer for someone else's loan. Consider whether you would be able to make their monthly payments if they stop paying. If you are not prepared financially to make that extra payment then it's simple...Don't co-sign!
How to Start Building a Credit History
Unless you have a co-signer, the easiest way to start a credit history is to apply for a credit card. Because it will be your first credit, you will probably not get very good terms on your interest rate that will be charged. So it's important to charge small amounts each month and pay the balance off fully each month so that you don't have to pay that high interest rate. Make your payments on time and soon you will have built up a good credit history.
If you aren't able to get approved for a traditional credit card then you can apply for a secured card. With a secured you will be sending money to the card company to be held as collateral against your charging. For example: If you send them $250 to hold, they will grant you a credit limit of $250. As long as you don't try to charge more than $250 at a time you will be okay. Again, only charge small amounts, pay the bill on time and balance in full each month to avoid paying interest.
If you aren't able to get approved for a traditional credit card then you can apply for a secured card. With a secured you will be sending money to the card company to be held as collateral against your charging. For example: If you send them $250 to hold, they will grant you a credit limit of $250. As long as you don't try to charge more than $250 at a time you will be okay. Again, only charge small amounts, pay the bill on time and balance in full each month to avoid paying interest.
Wednesday, July 8, 2009
Information Blackout
I've already discussed in a previous article the importance of your three FICO scores. This time I will tell you about changes that have made it more difficult for the consumer to know their three scores.
In February of this year Experian stopped selling the FICO score to consumers. They still sell it to commercial lenders but not to you. They use their own credit score model called "PLUS" and they also use Vantagescore that was developed between the three credit bureaus. Are they trying to create scoring systems to give FICO some competition? I think so. Will it work? I don't know. It is estimated that 90% of lenders still use FICO score models and prefer them as the most accurate scoring model compared to Vantagescore or PLUS. As consumers, we are stuck in the middle of their battle.
It was already difficult for consumers to understand how credit works. Now, if you no longer have access to your 3 credit scores you don't know if you really qualify for a loan or not. Before February, you could go to myfico.com and purchase your three scores. (The ones the lenders would be looking at if you were to go apply for a loan.) At the moment you can only get two. That's a real set back. The score you can purchase from Experian will be different from the FICO that they sell to the lender. Can you see how this could be a problem when you're trying to be an informed consumer? When you try to compare a FICO score to a Vantagescore or PLUS score it's like comparing Apples to Oranges!
At the moment you can still purchase two FICO scores. However I've been reading the speculation that the other two bureaus, Equifax and Trans Union might follow Experian's lead and only sell the Vantagescore system to consumers. This is bad timing to be sure since the economy is in the tank and causing so many changes in who can get credit and who can't.
But this credit reporting and scoring business is all about the money. I don't think it was ever intended to be consumer friendly to start with. We'll just have to keep a watchful eye out for more changes to come.
In February of this year Experian stopped selling the FICO score to consumers. They still sell it to commercial lenders but not to you. They use their own credit score model called "PLUS" and they also use Vantagescore that was developed between the three credit bureaus. Are they trying to create scoring systems to give FICO some competition? I think so. Will it work? I don't know. It is estimated that 90% of lenders still use FICO score models and prefer them as the most accurate scoring model compared to Vantagescore or PLUS. As consumers, we are stuck in the middle of their battle.
It was already difficult for consumers to understand how credit works. Now, if you no longer have access to your 3 credit scores you don't know if you really qualify for a loan or not. Before February, you could go to myfico.com and purchase your three scores. (The ones the lenders would be looking at if you were to go apply for a loan.) At the moment you can only get two. That's a real set back. The score you can purchase from Experian will be different from the FICO that they sell to the lender. Can you see how this could be a problem when you're trying to be an informed consumer? When you try to compare a FICO score to a Vantagescore or PLUS score it's like comparing Apples to Oranges!
At the moment you can still purchase two FICO scores. However I've been reading the speculation that the other two bureaus, Equifax and Trans Union might follow Experian's lead and only sell the Vantagescore system to consumers. This is bad timing to be sure since the economy is in the tank and causing so many changes in who can get credit and who can't.
But this credit reporting and scoring business is all about the money. I don't think it was ever intended to be consumer friendly to start with. We'll just have to keep a watchful eye out for more changes to come.
Wednesday, July 1, 2009
Everything Matters
This post will be short and to the point.
I want you to know that when it comes to your credit score, everything matters. I met many people over the years as a home loan officer who believed they could ignore small monthly payments and it wouldn't hurt them as much. These were people who would pay their big payments and ignore their small payments. They were everyone from college professors to active duty military men and women, business owners, factory workers. etc etc. That showed me that no matter what people do for a living, what their education level, there is still a lot of misconception across the board about how credit works.
It doesn't matter if your Mastercard payment is only $5 per month. If you aren't paying it, Mastercard will report it as 30 days, 60 days, 90 days past due. They will report it to Equifax, Experian and Transunion. These bureaus also called credit repositories, are the ones that score you based on that FICO scoring model I discussed in my last article. (They should not report you as late unless you become 30 days or more late.) You might have to pay a late fee for being 1 day late but it will not be reported as a late payment to the three bureaus unless it becomes 30 days late.
It doesn't matter to them if you are late on an $800 per month house payment or a $300 car payment, or a $5 Mastercard payment. So if you're one of those people who thinks it's okay to clump 3 months worth of payments together at a time....think again. You'll be ruining your credit score if you do that!! I know it can seem like a pain in the neck to send in $5 per month, but it really does matter. This is your first real lesson about making payments. Make all of them on time every month until they are paid in full.
I want you to know that when it comes to your credit score, everything matters. I met many people over the years as a home loan officer who believed they could ignore small monthly payments and it wouldn't hurt them as much. These were people who would pay their big payments and ignore their small payments. They were everyone from college professors to active duty military men and women, business owners, factory workers. etc etc. That showed me that no matter what people do for a living, what their education level, there is still a lot of misconception across the board about how credit works.
It doesn't matter if your Mastercard payment is only $5 per month. If you aren't paying it, Mastercard will report it as 30 days, 60 days, 90 days past due. They will report it to Equifax, Experian and Transunion. These bureaus also called credit repositories, are the ones that score you based on that FICO scoring model I discussed in my last article. (They should not report you as late unless you become 30 days or more late.) You might have to pay a late fee for being 1 day late but it will not be reported as a late payment to the three bureaus unless it becomes 30 days late.
It doesn't matter to them if you are late on an $800 per month house payment or a $300 car payment, or a $5 Mastercard payment. So if you're one of those people who thinks it's okay to clump 3 months worth of payments together at a time....think again. You'll be ruining your credit score if you do that!! I know it can seem like a pain in the neck to send in $5 per month, but it really does matter. This is your first real lesson about making payments. Make all of them on time every month until they are paid in full.
Tuesday, June 30, 2009
Where Does FICO Come From?
The FICO score came into existence after a company was formed in 1956 called Fair Isaac and Company. Now a days it's known as Fair Isaac Corporation. It's named after the two men who started the company, an engineer by the name of Bill Fair, and a mathematician named Earl Isaac. Gee thanks Bill and Earl!!
By 1958 Fair Isaac started building their first credit scoring systems.
In 1970 they implemented and delivered the first credit card scoring system.
In 1981 The Fair Isaac credit score model was introduced into the credit bureau system.
Could there be problems with the FICO system? I was prepared to talk about that in this article today but this morning when I received my email report from Money and Markets, low and behold Nilus Mattive had sent out this article that says much of what I was going to tell you. Since Money and Markets allows republishing of their articles, giving full recognition to the author of the article, I will now present you with Nilus' article below.
Does "Unfair Isaac" Give Credit Where It's Due?
by Nilus Mattive
Dear Subscriber,
In the Dividend Superstars issue that just went to press, I talked about FICO credit scores — the three-digit numbers that greatly determine how much money we can borrow, what interest rates we pay, and even how employers and landlords view us.
And I think this information is so critical to your financial life that I want to go over some of the details again here in Money and Markets today. Plus, I want to tell you why I think the system as it stands today is treating many responsible savers and borrowers unfairly in these credit-crunched times. That's something I didn't have room for in the latest Dividend Superstars newsletter.
So let's get into it ...The Basics of Credit Scores
If you've been reading my columns and issues, you know I firmly believe you should pull your credit reports from the three major reporting agencies — Equifax, Experian, and Transunion — once a year. Doing so is now completely free because of the Fair Credit Reporting Act.
You can choose to pull all three reports at one time, or space them out throughout the year so you get a frequent look into your records.
Whatever way you choose to do it, look for errors, incorrect addresses, or any suspicious activity. If you have questions or corrections, don't hesitate to contact the agency. After all, your credit score affects the interest rates you pay on all kinds of loans.
To get those reports, visit http://www.annualcreditreport.com/ or call 1-877-322-8228. You can also request them by mail at: Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Of course, when you pull those reports you WILL NOT see your actual credit score, which is derived from your reports.
The most commonly cited credit score number is known as your "FICO score," named after the firm that created it, Fair Isaac Co. The three-digit number falls between 300 and 850, with most people falling into the 600s or 700s.
Landlords and employers use credit scores as a way to get a sense of who you are, and as I noted, a FICO score greatly affects your borrowing ability. Fair Isaac says a borrower with a 580 might pay three percentage points more for a loan than someone with a 720!
The importance of your FICO is only getting more dramatic with the ongoing credit crunch. Some mortgage lenders have even been creating additional tiers above the 740-750 level, which has typically represented the general cutoff point for their "best" customers.
How a FICO Score Is Calculated, Along With Recent Important Changes ...
Fair Isaac's website gives the following general guidelines:
Your payment history counts for 35%. Being late on credit card balances, declaring bankruptcy, and other factors fall into this category.
Your debt counts for another 30%. This includes your overall debt vs. credit available, the balances on individual cards, and similar factors.
The length of credit history makes up 15%. In simple terms, the longer your credit history, the better your score will be.
Applications for new credit contribute 10%. Whenever you go shopping for a mortgage or open a new credit card, your score can potentially suffer.
The rest of your score comes from a mix of other factors. And note that the exact algorithm behind the FICO score is a closely guarded secret that is continually being tweaked.
For example, in February of 2009 Fair Isaac made a number of important changes to the formula:
Only spouses and children are able to piggyback onto your cards to boost their scores.
Debts of less than $100 that go into collections do less damage to your score.
Having less available credit hurts a score more.
A healthy smattering of loans (i.e. student, mortgage, credit card, etc.) helps a score.
Closing accounts hurts a score.
Single negative events may have less of an effect.
So How Can You Help Your Score (Or At Least Not Hurt It)?
Here are some of the basic steps you can take:
First, you should keep a few credit cards open for as long as possible, and with high available lines of credit even if you aren't really using them all that often.
It can make sense to close a couple newer cards, especially if they levy annual fees, but be careful that you'll still have a healthy amount of available credit and a long continuous history.
And don't let your few cards sit completely idle because lenders may unexpectedly close them, reduce your available credit, or stop reporting the activity to the credit agencies.
Second, you should not go around opening new cards just to get those initial 10 percent-off discounts or shopping for a home equity loan just to see what rate you can get. FICO tries to account for similar credit inquiry activity all falling within a small window (roughly 45 days) such as when you go mortgage shopping, but it still makes sense to limit your activity in this area.
Third, high balances are to be avoided. And if possible, you should spread out your activity among a few cards.
Fourth, don't forget about the simple steps like consistently paying bills on time and correcting errors on your credit reports, either.
Yet All This Begs One Last Question: Is the FICO System Even Fair in Today's Environment?
Think about some of the steps I just outlined: Keep cards open that you aren't really using ... have a "healthy mix of debt" ... and don't shop around for loans very often.
Do those make sense to you? Do those sound like steps a conservative consumer should take?
No way!
And yet these are apparently some of the best ways to get — and keep — a top credit score.
Consider this case: A hypothetical borrower has paid cash for his house and cars. He uses just one rewards card for all his purchases and pays off the balance in full every month, though he sometimes changes what card he uses based on the best rewards program at the time. And he frequently rolls his savings into CDs with whatever bank pays the highest rates.
Now, that sounds like someone I would loan money to! I mean, the guy has no debt and makes sound financial decisions.
Yet, as far as the FICO system is concerned, he doesn't have much of a credit history nor a smattering of loans. And all that credit card and CD shopping will also cause a lot of credit report pulls.
Oh, and get this: From what I've heard, the FICO system doesn't recognize patterns like regularly paying off large credit card balances. So in our hypothetical example, Mr. Conservative would also show a high debt-to-available credit balance.
Now, I'm sure this guy would still have a very decent score. And if he's cash rich and debt free, he probably wouldn't give a darn what Fair Isaac's system thought of him, either.
But what if he did decide to go shopping for a second home mortgage? Would the system — or the lenders who blindly rely on it — actually see him for the low-risk borrower he is?
My general impression is that FICO is best applied to the masses — people who live with all kinds of loans and spend the rest of their days faithfully paying off little bits here and there. And I guess that's exactly who lenders want to court, too.
Still, anyone who is responsible and doesn't fit "the mold" might be left calling FICO's creator "Unfair Isaac" when it's time to shop for a loan.
Best wishes,
Nilus
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com/
By 1958 Fair Isaac started building their first credit scoring systems.
In 1970 they implemented and delivered the first credit card scoring system.
In 1981 The Fair Isaac credit score model was introduced into the credit bureau system.
Could there be problems with the FICO system? I was prepared to talk about that in this article today but this morning when I received my email report from Money and Markets, low and behold Nilus Mattive had sent out this article that says much of what I was going to tell you. Since Money and Markets allows republishing of their articles, giving full recognition to the author of the article, I will now present you with Nilus' article below.
Does "Unfair Isaac" Give Credit Where It's Due?
by Nilus Mattive
Dear Subscriber,
In the Dividend Superstars issue that just went to press, I talked about FICO credit scores — the three-digit numbers that greatly determine how much money we can borrow, what interest rates we pay, and even how employers and landlords view us.
And I think this information is so critical to your financial life that I want to go over some of the details again here in Money and Markets today. Plus, I want to tell you why I think the system as it stands today is treating many responsible savers and borrowers unfairly in these credit-crunched times. That's something I didn't have room for in the latest Dividend Superstars newsletter.
So let's get into it ...The Basics of Credit Scores
If you've been reading my columns and issues, you know I firmly believe you should pull your credit reports from the three major reporting agencies — Equifax, Experian, and Transunion — once a year. Doing so is now completely free because of the Fair Credit Reporting Act.
You can choose to pull all three reports at one time, or space them out throughout the year so you get a frequent look into your records.
Whatever way you choose to do it, look for errors, incorrect addresses, or any suspicious activity. If you have questions or corrections, don't hesitate to contact the agency. After all, your credit score affects the interest rates you pay on all kinds of loans.
To get those reports, visit http://www.annualcreditreport.com/ or call 1-877-322-8228. You can also request them by mail at: Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Of course, when you pull those reports you WILL NOT see your actual credit score, which is derived from your reports.
The most commonly cited credit score number is known as your "FICO score," named after the firm that created it, Fair Isaac Co. The three-digit number falls between 300 and 850, with most people falling into the 600s or 700s.
Landlords and employers use credit scores as a way to get a sense of who you are, and as I noted, a FICO score greatly affects your borrowing ability. Fair Isaac says a borrower with a 580 might pay three percentage points more for a loan than someone with a 720!
The importance of your FICO is only getting more dramatic with the ongoing credit crunch. Some mortgage lenders have even been creating additional tiers above the 740-750 level, which has typically represented the general cutoff point for their "best" customers.
How a FICO Score Is Calculated, Along With Recent Important Changes ...
Fair Isaac's website gives the following general guidelines:
Your payment history counts for 35%. Being late on credit card balances, declaring bankruptcy, and other factors fall into this category.
Your debt counts for another 30%. This includes your overall debt vs. credit available, the balances on individual cards, and similar factors.
The length of credit history makes up 15%. In simple terms, the longer your credit history, the better your score will be.
Applications for new credit contribute 10%. Whenever you go shopping for a mortgage or open a new credit card, your score can potentially suffer.
The rest of your score comes from a mix of other factors. And note that the exact algorithm behind the FICO score is a closely guarded secret that is continually being tweaked.
For example, in February of 2009 Fair Isaac made a number of important changes to the formula:
Only spouses and children are able to piggyback onto your cards to boost their scores.
Debts of less than $100 that go into collections do less damage to your score.
Having less available credit hurts a score more.
A healthy smattering of loans (i.e. student, mortgage, credit card, etc.) helps a score.
Closing accounts hurts a score.
Single negative events may have less of an effect.
So How Can You Help Your Score (Or At Least Not Hurt It)?
Here are some of the basic steps you can take:
First, you should keep a few credit cards open for as long as possible, and with high available lines of credit even if you aren't really using them all that often.
It can make sense to close a couple newer cards, especially if they levy annual fees, but be careful that you'll still have a healthy amount of available credit and a long continuous history.
And don't let your few cards sit completely idle because lenders may unexpectedly close them, reduce your available credit, or stop reporting the activity to the credit agencies.
Second, you should not go around opening new cards just to get those initial 10 percent-off discounts or shopping for a home equity loan just to see what rate you can get. FICO tries to account for similar credit inquiry activity all falling within a small window (roughly 45 days) such as when you go mortgage shopping, but it still makes sense to limit your activity in this area.
Third, high balances are to be avoided. And if possible, you should spread out your activity among a few cards.
Fourth, don't forget about the simple steps like consistently paying bills on time and correcting errors on your credit reports, either.
Yet All This Begs One Last Question: Is the FICO System Even Fair in Today's Environment?
Think about some of the steps I just outlined: Keep cards open that you aren't really using ... have a "healthy mix of debt" ... and don't shop around for loans very often.
Do those make sense to you? Do those sound like steps a conservative consumer should take?
No way!
And yet these are apparently some of the best ways to get — and keep — a top credit score.
Consider this case: A hypothetical borrower has paid cash for his house and cars. He uses just one rewards card for all his purchases and pays off the balance in full every month, though he sometimes changes what card he uses based on the best rewards program at the time. And he frequently rolls his savings into CDs with whatever bank pays the highest rates.
Now, that sounds like someone I would loan money to! I mean, the guy has no debt and makes sound financial decisions.
Yet, as far as the FICO system is concerned, he doesn't have much of a credit history nor a smattering of loans. And all that credit card and CD shopping will also cause a lot of credit report pulls.
Oh, and get this: From what I've heard, the FICO system doesn't recognize patterns like regularly paying off large credit card balances. So in our hypothetical example, Mr. Conservative would also show a high debt-to-available credit balance.
Now, I'm sure this guy would still have a very decent score. And if he's cash rich and debt free, he probably wouldn't give a darn what Fair Isaac's system thought of him, either.
But what if he did decide to go shopping for a second home mortgage? Would the system — or the lenders who blindly rely on it — actually see him for the low-risk borrower he is?
My general impression is that FICO is best applied to the masses — people who live with all kinds of loans and spend the rest of their days faithfully paying off little bits here and there. And I guess that's exactly who lenders want to court, too.
Still, anyone who is responsible and doesn't fit "the mold" might be left calling FICO's creator "Unfair Isaac" when it's time to shop for a loan.
Best wishes,
Nilus
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com/
Sunday, June 28, 2009
Credit Pandemic
The definition of pandemic is: occuring over a wide geographic area and affecting an exceptionally high proportion of the population.
We normally hear this word associated with health concerns such as the swine flu or an outbreak of some other disease but the concept of credit (debt) fits into the pandemic definition as well.
At this point in time, even if you've never had credit or debt, and you don't have a credit score, you are still being affected by the credit woes of your government. Here in America you can click on the link below to see our nations national debt clock in real time.
http://www.usdebtclock.org/
Kind of scary huh? Bet you didn't know your government had you in that much debt before you ever even applied for any personal loans of your own. This government debt will be paid by us citizens through higher taxation. Every child being born now is born into debt slavery.
Here's an ironic thing: We are considered the one super power on the planet. Our military and defense spending exceeds every other country's spending by leaps and bounds. Our military men and women are deployed over and over again to the point of being worn out. They are supposed to be fighting for our freedom. The cost of these wars is turning us into debt slaves. So where's the freedom?
When our military men and women return home and need proper medical treatment that they can't get.....where's all that defense money going? Why can't it go toward treating our veterans properly after they come home? Sadly, many people grow wealthy off of wars. Defense contractors that the government hires to build and engineer bigger or better weapon systems are the ones who grow wealthy....not our veterans.
I digressed a bit off the subject of credit but I assure you this blog will be dedicated to helping you with ideas to fix your credit report. When I bring other information into the blog such as military spending its only to make you more aware of where our money goes and how it affects us. So do be prepared to get some good credit advice from me. You will be learning what I learned after almost twelve years as a home loan originator. But also be prepared to take "The Red Pill" Neo, and see how deep the rabbit hole goes!!!! Thanks for reading!
We normally hear this word associated with health concerns such as the swine flu or an outbreak of some other disease but the concept of credit (debt) fits into the pandemic definition as well.
At this point in time, even if you've never had credit or debt, and you don't have a credit score, you are still being affected by the credit woes of your government. Here in America you can click on the link below to see our nations national debt clock in real time.
http://www.usdebtclock.org/
Kind of scary huh? Bet you didn't know your government had you in that much debt before you ever even applied for any personal loans of your own. This government debt will be paid by us citizens through higher taxation. Every child being born now is born into debt slavery.
Here's an ironic thing: We are considered the one super power on the planet. Our military and defense spending exceeds every other country's spending by leaps and bounds. Our military men and women are deployed over and over again to the point of being worn out. They are supposed to be fighting for our freedom. The cost of these wars is turning us into debt slaves. So where's the freedom?
When our military men and women return home and need proper medical treatment that they can't get.....where's all that defense money going? Why can't it go toward treating our veterans properly after they come home? Sadly, many people grow wealthy off of wars. Defense contractors that the government hires to build and engineer bigger or better weapon systems are the ones who grow wealthy....not our veterans.
I digressed a bit off the subject of credit but I assure you this blog will be dedicated to helping you with ideas to fix your credit report. When I bring other information into the blog such as military spending its only to make you more aware of where our money goes and how it affects us. So do be prepared to get some good credit advice from me. You will be learning what I learned after almost twelve years as a home loan originator. But also be prepared to take "The Red Pill" Neo, and see how deep the rabbit hole goes!!!! Thanks for reading!
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