Archives for "The Credit Bureaus"
Credit Repair for Really Damaged Credit
Do Not Despair
There are many events that can create the need for credit repair, from the loss of a job to a medical emergency that taps savings and strains an otherwise sound budget. There are also cases of identity theft that, through no fault of ours, cause grievous credit harm. Regardless of the underlying cause, there is never a case that should make us despair.
Expecting Errors
It is important to understand, as you examine your damaged credit report, that the credit reporting system is prone to spawning errors from the seeds of real events. This is not the fault of the credit bureaus. The reporting system is massive and incorporates data from millions of participants, including creditors, collectors, courthouses and the services that gather public records. Expect errors to occur.
Disciplined Self-Monitoring
The need for credit repair is inherently acknowledged by the presence of the Fair Credit Reporting Act (FCRA). The requirement by the FCRA that all national credit bureaus provide free reports to consumers on demand once per year at no charge is a nod to the inevitability of errors. Perfection, from a system of such complexity, is not in the cards. The solution is regular disciplined self-monitoring.
The Time is Right Now
The need for self-monitoring is never more important than after a period of credit damaging financial hardship. It is almost inevitable in these cases that credit repair is necessary. As traumatized as you may be from the events that led to the credit damage it is still critical to address it efficiently. To ignore it may be easier, but reporting errors when neglected have a way of multiplying and taking root.
Feel Good Again
There is literally no situation that justifies sticking your head in the sand. Foreclosures, charge-offs, collections, and even the discharge of a bankruptcy is an occasion for credit repair. To address the issues now in an intelligent and thoughtful manner will put you on the path to recovery, give you peace of mind, and deliver a refreshed credit report and score that you can feel good about.
A Detailed Examination
The first step is a detailed examination of your reports. It might be worthwhile hiring a top credit repair service to do this for you as many of the score-wrecking errors that arise are subtle. This means that you may miss the errors entirely or mistakenly identify them as accurate. Just because something looks familiar does not mean that it should be on your report.
Dispute the Errors
Once all of the reporting errors are identified it is time for the dispute phase of your credit repair project. As in the case of the initial proofreading, you might want to turn this important but repetitive task over to a professional. The effectiveness of credit bureau disputes depends on a highly organized and specifically targeted routine of approach and response. If you do it right you will soon have a greatly improved credit report.
Up From the Ashes
The final step on the path to renewed credit is rebuilding. This requires opening new accounts and managing them for the greatest possible FICO score impact. Secured credit cards are the credit repair weapon of choice, and a remarkably powerful way to propel your scores back into the realm of respectability. Being secured, they are not based on your credit history, so there is no fear of denial. Open two cards and manage them with great care. Make your payments on time and keep your balances low. Soon the bad credit of the past will fade from memory.
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Repair Mysteries Unveiled
Your Credit Score is Not What You Think
Credit repair is not always clear-cut. You may be surprised to hear that you can pay your bills right on time for years on end and still have crummy credit scores. Your score is not a report card on your payment habits, it is a complex algorithm designed to predict the chance that you will default on a loan. There are numerous factors involved, many of which may seem to have no bearing on your willingness or ability to repay.
You Have Control Over Your Scores
Credit repair is about achieving an optimal balance of the factors that influence your scores. There are many dynamics involved, including the type of debt you use, number of accounts you have, utilization of credit lines, and age of accounts. The FICO scoring model may be a black box, inasmuch as the exact formula is not public knowledge, but the mechanics are not obscure. Credit repair is a science and you can control your scores.
The Credit Bureaus Make Mistakes
Before launching a credit repair effort it is important to know that the credit bureaus manage an unusually complex network of participants, all of which come together to create the credit reporting system. Creditors, collectors, and the service bureaus that catalog public records contribute the data. Massive software programs combine and sort it, and human operators supervise and guide the technology. Errors are commonplace and will not fix themselves.
Time Will Not Fix Your Credit
Errors will not fix themselves, nor will time. Credit repair is critical. Errors have a funny way of becoming entrenched and even multiplying as months and years go by. You cannot afford to imagine that a credit report left alone will shed reporting errors. Seven years will almost certainly leave you in even worse shape. You must look out for yourself and be as proactive as possible.
Deleting Errors is Only Half the Work
Everyone loves to see errors erased from their credit report, and it is indeed a wonderful thing. But error removal is not the only objective of credit repair. The ultimate goal is to have the kind of credit that will put a smile on the face of a lender. This involves more than a cleanup of your reports. You need to make sure you have the quality and quantity of accounts you need to get results.
Credit Repair Balloon
Your credit scores are calculated based on both the positive and the negative information on your reports. You can think of your scores as a hot air balloon. The negative accounts are the sandbags that keep the balloon from rising, and the positive accounts provide the hot air you need to ascend. You may cut off the sandbags, but without sufficient hot air your balloon will not go anywhere.
Building for Success
Many survivors of poor credit find themselves with no open accounts. The correct credit repair strategy for someone in this position is to simultaneously clean up the errors and rebuild positive credit. For most people attempting to rebuild, secured credit cards are the best alternative. They are inexpensive, and you will not be denied. Two cards will provide the lifting power you need. Just get them open, keep the balances down and watch your scores take off. Good luck!
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Practical Realities of Credit Repair
A Utopian Credit Dream
In the perfect world, the credit bureaus would never err. The billions of pieces of data they each process, related to more than two hundred million Americans, would all click right into place. When you examined your credit report there would never be a mistake. And there would be no use for credit repair.
The Facts of Life
In real life credit repair is the only way to insure an error-free credit report. The credit bureaus do an admirable job. It is no small task to coordinate the massive amount of information provided by millions of creditors and collectors, not to mention the public records gathered through courthouse sources. But the system is far from perfect. Errors are constant, and they are costly.
An Example
The real problem with reporting errors is the awful impact they can have on their victim. Here is an example of a common and expensive error, now resolved by credit repair. A woman examined her credit report and found five collectors all reporting the same debt. She defaulted on the debt a number of years ago, so initially felt that the derogatory accounts were her fate. Not so.
A Collector Pile Up
The woman ignored the mess on her report for a long while, but upon investigation discovered that only one collector may report a debt at a time. Collectors are expected to withdraw accounts from credit reports when they sell a debt. And as debt sales are a normal part of the collection business, and as collectors are typically remiss in their reporting compliance, collection accounts often pile up.
The Credit Repair Solution
A single round of credit repair dispute letters to the credit bureaus resolved the problem. All of the prior collectors simply withdrew their accounts when challenged; all gone. A quick check of her FICO scores showed that her scores rose close to 100 points as a result. It was a happy moment, but the magnitude of her score rebound brought a horrific fact home to roost.
The Real Cost
She had ignored the presence of these invalid collections for nearly three years. During that period of time she had lived with the belief that she was a sub-prime borrower. She had purchased a home and a car in that period and passively accepted the higher interest rates offered by her lenders. And to make it even worse, two of her credit cards companies raised her rates raised and lowered her limits. The cost of the errors was considerable.
The Good News
The good news is that the error was caught, and the purpose of credit repair was fulfilled. The truth was dour, but it is better to resolve a problem that to let it linger. The woman quickly refinanced both her home and automobile and was soon paying five-hundred dollars less each month. The credit card companies would not budge, so the story continues, but every day is much brighter.
The Moral of the Story
Do not take anything for granted. Credit reporting errors are as common as dirt and can be costly. Like the woman above, too many people make the mistake of thinking that bad credit is their karmic burden. You may have to live with the consequences of your past mistakes, but you should not have to pay for the errors of others. Do you have errors? Shine the light of credit repair on your reports today.
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
The Wonders of Credit Repair
Credit Repair Works
Credit repair works. And the results will have a dramatic impact on your financial life. Lenders everywhere have tightened their credit requirements. Every single point on your credit score matters. Credit blemishes can quickly translate into higher interest rates and even loan denials. You cannot afford to ignore the potential of credit repair. Do it yourself, or for a small investment you can hire a professional credit repair service to manage the process for you. Either way, now is the time to take action.
The Great Liberation
Free yourself from the illusion of authority. Many people make the mistake of giving too much credibility to the content of their credit reports. The power of the credit bureaus can be intimidating; we might believe our eyes against our better judgment. The credit bureaus play an important role in our world, but they are not without flaw. Over half of all credit reports include errors that are significant enough for the victims to pay premium interest rates, and, in many cases, to face loan denial. The credit bureaus maintain files on over 200 million Americans. That means that over 100 million Americans are victims of credit reporting errors.
The Credit Repair Plot Thickens
There is an unfortunate and unjust credit reporting anomaly that is virtually guaranteed to handicap those who can afford it the least. If you have had legitimate credit problems in the past you are more than twice as likely to be a victim of reporting errors as someone who has not had issues. There are two primary reasons for this; when you default on a debt the creditor is apt to move your account into another reporting category increasing the likelihood of duplicates and errors, and secondly, if an account is sent to a collector the lax reporting conformity of the collection industry can harm your credit needlessly for years to come.
And There is More
An informed examination of your credit report by a credit repair professional may turn up errors in many categories. Some of these errors are pure compliance violations that you are not likely to spot without training. If you are going to manage your own credit repair project make sure to do your homework before getting started. Educate yourself about reporting period limits for all categories of credit, make sure you understand the operation of statute of limitations, and peruse the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. The little details can make the difference between success and failure.
The Credit Repair Solution
Understanding your rights and the compliance requirements of the credit bureaus will give you the legal leverage you need for your credit repair effort to succeed. Your credit bureau disputes are the cornerstone of your credit repair project, but there is more. True credit repair success should be measured by the improvement in your FICO credit scores. You must carry out your credit bureau disputes with an understanding of the impact every change in your credit report will have on your FICO scores. When you put it all together you will be thrilled with the results.
Help is Near
You are not alone. Many people don’t have the time to manage their credit repair project as carefully as necessary. If you feel that you can’t give it the attention it deserves, hire a credit repair professional. A professional will insure that every issue is identified, and will address your problems in an informed and careful manner designed to produce the best results. In addition, truly effective credit repair services will assist you in rebuilding and reshaping your credit to meet future lenders guidelines so that you will be left with genuinely useable credit. Whichever route you take, I urge you to act now. It’s your credit, and it matters.
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Score Secrets Exposed
So Many Scores so Little Time
There are lots of different credit scores offered on the web. If you are starting a credit repair program you may want to benchmark your scores. So you are likely to go online, pick out a website and pay the price. Unfortunately, the odds are that the credit scores you purchase will have no resemblance to the scores a lender will use to underwrite a loan.
The Real Scores
There is only one website where you can purchase the same scores lenders use; this is MyFico.com, the website for Fair Isaac Corp the developer of the FICO scoring model. As a credit repair consultant it is a matter of daily consternation to me that the same credit bureaus that sell these important FICO scores directly to lenders will not sell FICO scores to consumers.
The Wrong Scores
You can purchase credit scores from Experian, Equifax, and TransUnion, but they are not FICO scores, and therefore of no real credit repair value. These credit bureau scores are of their own creation and exist solely for the purpose of cashing in on the ignorance of consumers. I cannot imagine any scenario where there would be no moral culpability on the part of the bureaus.
No Practical Application
I have heard it said that although these bureau scores are not the same as FICO scores they are a way for consumers to track changes in their reports. This is not so. The bureau scores just don’t behave the same way. In other words, changes in your credit affect your FICO scores differently that they do the bureau scores. These bureau scores have no practical application, for credit repair or otherwise.
The Equifax Exception
For the record, Equifax offers the only credit repair friendly credit score. In fact, they do offer a FICO score. They currently use a previous generation of the software, and they only apply it to their own data, but it will generate a close approximation of your real score and generally behaves the same and could be used to monitor credit repair progress.
Measuring Credit Repair Progress
Unfortunately, this one credit bureau nod to integrity does not provide an optimal credit repair solution. You should know that many lenders, and all mortgage lenders, purchase all three FICO scores and use the middle of the three scores. An accurate measure of your credit repair status requires all three scores
Ask Your Lender for Your Reports
Given that lenders are able to purchase FICO score from the credit bureaus, you may have a roundabout way of getting your hands on a real tri-merged report with all three FICO scores. If you recently applied for a mortgage you may consider contacting your lender and asking for a copy of your report. Tri-merged mortgage credit reports are usually quite detailed and ideal for credit repair purposes.
Bend the Rules Just a Bit
By the book, lenders are not supposed to provide copies of reports directly to consumers. This is standard boiler plate language included in lender agreements with their report provider. The Fair Credit Reporting Act includes an information sharing clause; in the case of credit denial consumers are entitled to a copy of their reports, but this is a hassle compared with calling your lender and asking for the small favor.
Credit Repair and Your Reports
If you want your credit scores to establish a starting point for your credit repair effort I should say a bit more. If you go to MyFico.com to purchase your credit scores they will come complete with your three credit reports. Unfortunately, as if happens, even though Fair Isaac is the only source for your scores, they do a terrible job on the credit reports.
Fair Isaac Report Problems
MyFico.com credit reports are edited to the point of being useless for credit repair purposes. This is especially true if you intend to investigate all the information that should be available on your reports. Fair Isaac reports are highly sterilized, and in many cases actually exclude your account numbers, which you may need for your credit repair effort. So, for credit repair purposes you should get your reports from the credit bureaus. Phew!
Making Do
If it all seems crazy and unfair remember that the credit bureaus have the credit data, and Fair Isaac owns the credit scoring software. Everyone wants to make money and until they figure out a better way to work together we just have to make do as best as we can. Good luck!
Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.