The National Bureau of Economic Research said today that the U.S. has been in a recession since December of 2007. They said that the massive decline in jobs in 2008 was one of the key reasons they decided to state why the recession started last year. They estimated that employers have cut jobs by 1.2 million. 

In a statement, White House Deputy Press Secretary Tony Fratto said that even though the recession is now official, it is more important to focus on the steps being taken to fix the economy.

“The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus,” he said. “Addressing these areas will do the most right now to return the economy to growth and job creation.”

So, if you are in need of an economic stimulus package, look into credit repairing your credit. It’s one of the biggest factors lenders look at when determining your risk. Your credit score will also determine your loan rate. The lower the score, the higher the interest rate. You may be able to save hundreds of dollars a month by avoiding high interest rates on your credit cards, auto loans, and home loans. 

To read more, visit: 

http://money.cnn.com/2008/12/01/news/economy/recession/index.htm?postversion=2008120112

Question

hi well ihave three credit cards and i pay on time never late and I also have a mortage and i always pay ontime never late but my credit score stays below 600 no matter what i do it never seems to up

Lisa D.

Answer

Lisa

Congrats on paying your bills on time.  This is very important for maintaining and building positive credit.

There are other factors that go into calculating your credit score.  Here a few things to check…

1) Monitor your credit.  Make sure you or no one else is pulling your credit too often.  Inquiries can lower your credit score.

2) Make sure everything on your report is accurate.  If it is not, dispute these items with each of the credit bureaus.

3) Make sure you have available credit showing on your accounts.  Having your accounts “maxed out” with lower your score.

4) Make sure that if you have old accounts on there, they are paid off.  An old collection or judgment could bring down your score.

Check on these 4 things and keep maintaining positive credit.  Your score should continue to go up over time.

Thanks

Candice

Question

I just found out my husband has bad credit and a lot of debt in his past.  The collections bills are now starting to roll in and we just had a debt collector come to our door the other night for 8000.00.  What are my options?

Blake H.

Answer

Blake

Sorry to hear about this but this is a common problem in marriages; spouses bringing in old credit history into the new marriage.  It is very important for you both to sit down, talk about your combined financial picture and work out a plan together.  Above all, keep communicating to each other!

As far as the debts go, you have a few options…

1)      Debt Acceleration.  If you get on a spending plan together, you may see you have extra money coming in each month.  If you do, start applying this extra monthly month to one of these bills.  Once you have paid off one, apply all the money that was going to the now paid off account and apply it to the next bill.  You can continue to do this until all your bills are paid off.

2)      Family and Friends.  It is getting more common now to borrow from family and friends.  If this option is available, make it official.  Sign a note with them that clearly spells out the repayment terms and the interest rate and by all means pay them back on time!

3)      Credit Counseling.  There are non-profit companies out there that can renegotiate the payment terms with your creditors.  They will draft your account once a month and handle all of the re-payment process.

4)      Debt Settlement.  There are agencies out there that can negotiate a settlement for less than full balance of what you owe.  This could be a good way to save money on some old debts.

5)      Bankruptcy.  If all else does not work, bankruptcy may be an alternative.  You would have to meet with an attorney in your state and discuss whether a Chapter 7 or a Chapter 13 would help in your situation.

Blake, if you would like to have a free referral to a debt specialist, give us a call @ 800-445-8540 and we can match you to a reputable partner.

Good luck.

Candice

Question

Upon paying off a collections account, will my credit score suffer if I settle in full versus paying in full? Also, upon paying off collections accounts, will the reporting collections agency remove the derogatory information or negative rating by not responding to a personal letter from me saying “this account has been paid and should not reflect a negative status, as it is affecting my ability to obtain credit”? What advice can you offer to have derogatory accounts be removed from my credit report?

Joseph D

Answer

Joseph

Great questions. 

We recommend that you always satisfy your debts in some way.  This is a great way to increase your financial health.  In the long run, this should also improve your credit score.  According to myfico.com, 30% of your credit score is made up by the amounts you owe on your debts.  So the less you owe, the greater you will score in this area.  Outstanding collections, judgments, tax liens should be satisfied in one way or another. 

Unfortunately, in the short term, paying off these accounts either in full or by a settlement, may lower your credit score.  The payment you make on these accounts will be more recent than your previous payments and will update the activity date.  Your credit score weighs new activity, usually over the last two years, more than old activity.

Unless you negotiate for a deletion with your settlement, the creditors will not remove these collections accounts from your records.  In fact, they could stay on your reports up to 7 years from the last date of activity.

As a part of your settlement negotiation, you could stipulate that the creditor delete the item in full from the bureau reports.  Often times, the creditors will ask for a higher settlement amount to accommodate this request.  If they do agree to this, it is recommended that you get the agreement in writing BEFORE you make your payment.  Monitor your credit reports in about 90 days from your settlement to make sure these items have been removed from your reports.  If they are not, mail a copy of your settlement agreement to each of the bureaus by certified mail asking them to comply with the deletion request.  If this does not work, follow up with the collection agency to have them contact the bureaus again.

Good luck.

Thanks

Candice

Mortgage rates were impacted by the news that the government would take over Freddie Mac and Fannie Mae. According to Bankrate.com, a 30-year fixed mortgage dropped from 6.55% to 6.2% when the market opened on Monday September 8^th.

Read more in Marketwatch, Mortgage rates fall on Fannie, Freddie Rescue.

Jerry Howard, chief executive of the National Association of Home Builders, in an interview Monday said the government action was “a very important first step” that will help ease mortgage rates and restore confidence in the debt of Fannie and Freddie. The government bailout was aimed at lowering mortgage rates and assuring that home loans would be available to consumers. This is good news for consumers looking to buy a home. There are currently more homes on the market, and low rates. It is the perfect time to take advantage of a buyer’s market.

If you are considering a home purchase, it is important that you qualify for the lowest rates available. You can do this by taking control of your credit rating. Credit Report Repair services are just another way of optimizing your position and taking advantage of the current mortgage market.

Find out your options with a free phone consultation.

Question

I am overwhelmed in credit card debt and would like to try the debt settlement.  A company called Zwicker and Associates has already taken over my Discover card.  What can they do to me?  Is debt settlement a good idea?

Julianna H.

Answer

Julianna-

Debt settlement is usually a good program for old unpaid collections, charge offs, judgments or tax liens.

Usually, in the cases I just listed, you can get a 40 to 60% reduction in the balance that you owe.

There a few pitfalls to be aware off.

1)      The remaining balance that you do not pay on your settlement may be considered income by the IRS and is taxable as ordinary income.

2)      Your credit report will be updated as a “settlement for less than full balance” which can be a red flag for future creditors that you may apply for new credit with.

3)      Lastly, some settlement companies will take monthly payments from you until you have enough to equal the settlement amount.  Be aware that these monthly payments are going to the settlement company and not your creditors.  This means that the creditors still have the right to attempt to collect the debt including garnishing your wages, getting a judgment or seizing your assets.

Let us know if we can be of any assistance finding a reputable partner for you.

Candice

These days, credit scores affect almost everything we do, including rates on mortgages, auto loans, and credit cards to the ability to get a job. That is why it is essential that we understand what a credit report is and what factors can affect this report. It is also important to understand your credit score and how that number is viewed by a lender.

A credit report and score is a snapshot of how high of a risk you are to a lender. The most widely used credit score is the FICO, which ranges from 300-850. This system was created by the Fair Issac Corporation and is used by the majority of lenders in determining consumer credit scores. There are also many other credit rating agencies that sell “educational scores” that the industry somtimes refers to as “FAKOs”, meaning a fake FICO score. For example, Experian offers their own PLUS Score and TransUnion sells a Vantage Score, which ranges between 501-990. These scores can sometimes differ from the FICO score by 20 points or more and have completely different ranges, so it is very important that you know kind of score you are actually looking at and to make sure that it is consistent with the score your lender would use to qualify you for a loan.

Ultimately, it is recommended that you review your credit report at least once a year and determine what you can do to improve your score to ensure that you are not considered a high risk as a borrower. Read more on understanding your credit score.

If you are curious what is on your credit report, check out this free trial offer to view your credit report and score.

A lot of what we’ve been hearing the past year is that lending standards have become tough. That you have to have a good credit score to get a loan due to the subprime mortgage crisis. Yet now the failure of prime mortgages is going to make it even harder for first time homebuyers to get into a home. Lenders are now even scrutinizing prime borrowers, those who already have a good credit score. It is vital that your credit score be immaculate before you apply for a home loan. Lenders are being more and more conservative with their loans. If you’re looking to get into a home in the future, maybe it’s time to start the credit improvement process now. You can either do it yourself by learning how to write a reputable dispute letter which takes a lot of time and patience or you can hire a reputable firm for a monthly fixed price.

Read more about tightening lending standards here.

Eleven people were indicted in an ID theft ring that targeted stealing credit and debit card numbers from large stores. You’d be surprised by the list of stores; Barnes and Noble, TJ Maxx, Boston Market, Sports Authority, BJ’s Wholesale Club, DSW Shoe Warehouse, OfficeMax, and Forever 21.

Identity Theft can seriously harm your ability to buy a home, a car, or even something as trivial as a T.V.

What can you do when you are struck by ID theft? Check out this Identity Theft article.

Click to watch the Yahoo News hosted ABC News story.

One safety measure is by checking your credit report and/or employing a Credit Monitoring service.

It’s the question that anyone with credit problems will face - should I try to repair my credit myself or do I hire a company to do it for me? It’s a question that you’ll probably have to determine on your personal situation, goals, and financial situation. However, there are very convincing arguments as to why it will save you a lot of time, hassle, and money to go ahead and hire a company, preferably a law firm, that has experience in credit report repair. Here is a great article that helps provide valuable arguments to hire a credit repair law firm.