Very few of us have perfect credit scores. In fact, many who previously enjoyed a good credit rating have now slid into a fair, or poor credit score status. With millions of jobs lost over the last year, the spike in home foreclosures and now the credit crunch, this should not be surprising. However, this doesn’t mean you should throw in the towel.
In the current economy, the average consumer may not be able to get a loan or a credit card for some time to come, especially in this Housing Market you must always get a pre-approved mortgage prior to even Shopping For a Home. If your credit score has suffered, now is the best time to launch a credit score repair project. The process of credit score repair can be lengthy and tedious. If you begin now, by the time creditors are again extending credit and the economy has stabilized, you’ll be credit problem free and credit worthy when that happens.
Here we offer some credit repair tips and strategies to help you through your project.
You are entitled to one free credit report per year, so get your copy so you know where you stand. Go through it with a fine toothed comb. Make sure that all the debts listed belong to you. With the spate of identity theft and unethical creditors, you may find a number of items that don’t belong on your credit report. Address these items first. Write to those creditors, letting them know you are disputing the item. The creditor is required, by law, to produce proof, within 30 days, that the debt is yours. If they do not or cannot, the item must be removed immediately. This single step can go a long way towards your eventual credit score repair.
If you have legitimate marks on your credit report, such as late credit card payments, or unpaid debts due to a job loss or temporary layoff, you have the right to submit a letter of explanation to each of the credit bureaus. While you are still responsible for the debts, future creditors will be able to read what caused the lapse and may find the circumstances warrant leniency.
If your current credit score rating is poor, whatever you do, don’t apply for any credit, no matter how desperately you need the money. You won’t get the credit card or loan. The only result will be a further slide in your credit score. Every time you apply for credit, it’s reported to the credit bureaus and becomes part of your record. It only serves to make you look like a scammer. You are penalized for such desperation moves!
One of the best moves you can make is to investigate consolidating your outstanding debt. Look for websites with the ‘.org’ suffix. These are non-profit organizations which charge less than the ‘.com’ businesses. They have the same, or better connections to get you to a successful credit score repair. These organizations can negotiate reduced interest rates, as well as a single, reduced payment you can manage, which covers most debts.
A credit score repair project is time consuming, but well worth your time and trouble.
As of the end of November reports, the number of bank foreclosure homes is up a whopping 71% over the previous year. The root cause of these astonishing figures lies with the banks and mortgage lenders. During the period of the well-touted ‘ownership society’, just a few years back, banks were making loans to many people who were clearly not qualified to assume a home loan which their income could not support.
It was recently revealed, largely through corporate whistle blowers, that mortgage brokers were encouraging applicants to not supply relevant information and even to inflate their income on paper, so that their loan would go through. Many such borrowers could barely make the payments at the lower initial rate. When the higher rates kicked in, the number of bank foreclosure properties began to rise rapidly, as almost none of these home owners were then able to meet mortgage payments.
It’s disingenuous to believe that the banks did not see this coming. However, they did receive their money for a while, including interest and whatever late fees might be involved. As borrowers began to default, the banks, on the whole, failed to attempt renegotiate lower rates in order for the borrower to avoid foreclosure.
The result? People lost their homes, their investment and their credit standing. Millions of bank foreclosure properties flooded the market. Often, the values of homes, in entire neighborhoods across the country, plummeted. Therefore, people who owned homes and made their payments are now faced with property values that fall far below what they owe on their mortgages. Perhaps these are future bank foreclosure properties in the making.
This $700 billion bailout of the banks is a thinly veiled payoff, leaving the banks hale and hearty, while saddling the taxpayers with this debt for generations to come.
Following the initial approval of this bank bailout, AIG brazenly threw a $440,000 party to celebrate their largess, while they and other failed banks threw millions in ‘golden parachute’ packages at the CEOs, who logically and ethically were accountable for making the loans in the first place. At the same time, banks were still refusing to loan, even to other banks. Now they are reportedly moving $2 trillion amongst themselves and won’t disclose to whom they are lending!
Other controversial issues arise in this scandal of bank foreclosure properties. Falling values make this buyers market. With the current credit crunch, few can qualify. This invites foreign investment, which doesn’t bode well for our economy.
How about all of the people who already lost their homes, pre-bailout? Why did the government wait until bank foreclosure properties had reached such a crises point?
Moreover, this proposed home owner bailout addresses only home owners who are at least 3 months behind, owe more than the property is worth and who face imminent foreclosure. This represents only 20% of mortgage delinquencies. Will this make a real difference to resolving the crises in the end?
It remains to be seen what the final resolution to the problem of bank foreclosure properties will be. The situation begs the question, how much more quickly might the economy be stimulated if some of this $700 billion were paid to working people, instead of buying up the debt of failed and unscrupulous bankers?
instead of the rescue at the top, give some of this money to working people – this will stimulate economy if no one qualifies, consumers aren’t buying, small business will go out of business, job losses
We are excited to announce that our first Foreclosure Tour will hit the streets December 6th. Elizabeth and Walter are beginning to preview properties now, to ensure only the best values are shown on the tour. Seating will be limited, so sign up early. We are looking forward to our voyage tour!
Sign in will begin promptly at 9:00 am with departure promptly at 9:30.
Once all homes are scheduled we will be able to provide you an estimated length of the tour.
We will announce the departure location soon.