The Mortgage Manifesto!

Credit Facts You Need to Know

· Accurate information on your report cannot be changed or removed. · How Information gets on your credit report: Organizations and credit granting companies and/or retailers with whom you have submitted an application for credit or an existing credit account may furnish your identifying information, employment and/or payment history on open or closed accounts to Credit Reporting Agencies (CRA’s). Some organizations subscribe to one, two or all three major Credit Reporting Agencies. Cour5t researchers obtain public records information from the courts and furnish data to the three national Credit Reporting Agencies. · How long information remains on your file: As a general rule, credit information remains on file for 7 years from the date of last activity. This includes open and closed accounts. There are exceptions, such as derogatory accounts remain on file for 7 years from the original date of the last delinquency. As Agreed/Closed accounts may remain as long as 10 years from the last reporting date on a TransUnion file. Bankruptcy Chapter 13 remains on your file for 7 years. Chapters 7, 11 and 12 remain for 10 years from the date filed. In some states (New York specifically) satisfied judgments remain on file for only 5 years from the date of the original filing along with paid collections for 5 years from the date of last activity with the original creditor.

It Takes Credit To Build Credit

Using a credit card wisely is an important step in building a good credit rating. If you're trying to re-build your credit or if you're young and just starting out, pay close attention the next time you receive a new card offer in the mail. When you're trying to build a positive credit history for yourself, using the right credit card makes sense. Making small purchases and then making your payments on time each month is a simple, reliable way to build an outstanding credit report.


What to Look For On a Credit Card Application

If you receive a credit card application that appears to offer a low monthly interest rate, don't make a decision until you turn it over and closely examine the Disclosure Box. In it you'll find a more important measure of credit terms - the Annual Percentage Rate, or APR. By federal law, the Disclosure Box will also tell you whether or not the card has what is called a grace period - a number of days, usually 25, until your purchase starts to accrue finance charges. If a card has a reasonable grace period and you pay off your balance at the end of each billing cycle, you won't have to pay finance charges. It isn't difficult to find credit cards that offer these grace periods, so if the Disclosure Box doesn't declare one then throw the application in the trash and look for a better offer.

If you don't have any credit history at all, a credit card company won't want to give you a very high credit limit, but that's probably best when you're just starting out. You don't want to be tempted to go into serious debt with your very first credit card.

The First Step Toward Living Debt Free

All of us incur debts from time to time. It is normal to purchase items on account and pay for them at a later date. The point where we run into trouble is when we overextend ourselves and owe our creditors more than we can repay. This article will explain to you how to set up a budget so you can meet your credit repayment obligations and move on to a debt free life.

Do You Have A Positive Or Negative Cash Flow?

The definition of a break-even point is when the amount of money you are paid every month covers your expenses exactly. The two numbers would be equal in this case. When you end up with more money than you have in expenses, you have a positive cash flow for that month. Otherwise, you have a negative cash flow, and you may be borrowing money to make up the difference.

The Final Credit Mistake

The final Fatal Mistake I am highlighting in the series is this: If you have ever had a collection account, judgment or tax lien, assuming the creditor, collection agency or taxing body will report the resolution to all three bureaus is a big mistake! That goes for erroneous reporting you find on your report too.

Don’t assume that just because you paid-off a collection, judgment, or lien that it is immediately reported to the bureaus. Even when you close an account, it is often not efficiently reported as such to all bureaus. It is not uncommon to see such activity reported to just one bureau, even when the adverse account was being reported on your credit report by two or all three bureaus. Unfortunately, agencies and creditors are quick to report you when you own them money or have made a recent mistake, but they can be very slow to report the final resolution to that account when you have paid them off. Collection agencies and the creditors that have sold your account to the collector are both extremely poor at taking the final step and reporting that the account is paid in full.
This problem is magnified when

Credit Mistakes we all make!

How many times have we all fallen under the temptation to apply for a credit card in exchange for some special offer or discount? Sometimes it is in the mail, sometimes at the department stores, other times at events, but where ever it occurs, it is at an all time high with the ferocious competition out there between credit card companies. The problem is that this becomes very detrimental to your credit scores.

Don't open accounts thinking it will raise your credit scores, as it may not help at all. Have a minimal number of cards and only the ones you need, and use them wisely. The scoring algorithm looks at credit card debt in a variety of

More Credit Score Mistakes...

It is not whether you should or should not close accounts that are inactive... it is when to close them. Contrary to what some of the 'so-called-experts may tell you, closing accounts, inactive or not, with or without balances WILL NOT RAISE YOUR SCORES!! (initially anyway)

In fact, closing them WILL tend to DROP your scores immediately after closing them. Again, it is just like the result of paying off old collections, closing accounts that are inactive  immediately brings those accounts to the forefront of the scoring algorithms and appear to be new credit activity. New activity is a show of risk and therefor the scores are adjusted accordingly.

Now that said, eventually, your scores will definitely go up as a result of closing credit accounts. Less credit is less risk (as long as you have at least 3 to 4 active and open accounts). So, again, it is the timing that is important. If you are applying for credit within the next 60 days or so, don't close them yet. If you are more than a couple months out, by all means, close those inactive accounts and watch the scores come up over the next 60 days or so.

Fatal credit-score mistakes you could be making!

There are many things we do as consumers that have an affect on our credit scores. You may have a perfect history of making your payments on time, never being as much as 30 days late on an account and yet drive your scores down. Or, you may have had some problems years ago, but over the last few years, your scores have come back up due to stellar credit management since then. Simply by doing some or all of the activities we will cover over the next few days, you could sabotage your credit scores without even knowing it!

Today, lets look at 'old' judgements and or collections. Did you know that you should never pay-off old collections or judgements... unless you have no intention on seeking new credit for any reason for at least 2 years!

If you attempt to pay any of these off (especially if you may be applying for a new mortgage) it brings that OLD derogatory or delinquent credit account to NEW activity on your credit report. Now it is no longer an old dormant account... you just made it

Credit Scores: What would you like to know?

Do you have questions regarding credit scores? Post any questions you may have and over the next few days I will answer any questions you may have about scores. In addition, I will walk you through the different ways you can raise your scores, detailing a different aspect with each new post between now and the end of January. So... ask away!