“ How the heck could my credit scores be off by that much, in just one month, when nothing has changed?“ That is the question that I was being asked by a gentleman who had just had a lender pull his credit for a mortgage. It only took few questions to realize that the difference was caused by the difference in the sources of the scores he was comparing. I have touched on this subject before, but it is worth touching on again. There are a bunch of credit scores out there that tell a story about each of us to potential lenders and others. There are scores used for renting an apartment, scores for buying an automobile, and,  of course, we know about the scores for getting a mortgage, just to name a few. Keep in mind that credit scores are intended to determine, mathematically, the level of risk involved in lending money to a person, based upon current and past behavior, and the chance of of that defaulting on the loan. High scores indicate lower risk and low scores not so much. All of these scores, that professionals pull, have an applied purpose. These scores are tools for making a specific business decision. Outside of the arena they are designed for, they are essentially useless. There are some that might want to argue that a bit, but put into context, there is little to debate. A score is not useful if it can not be used for an...

“Pay us today or we will have the sheriff at your door to arrest you this afternoon!” “But I don’t have the money right now to be able to pay it.” she said. “It doesn’t matter!” demanded the voice on the other end of the phone. “You have to pay today or we will have you arrested and seize your bank account and your home!” “What do I do?” cried the young woman when she called me for help. “I don’t have that kind of money.” She was practically in tears with fear over the threats that were issued buy the collection agent on the phone just a few minutes earlier. I told her not to worry, that everything will be alright. “You see,” I said calmly, “It is completely illegal for the collection agent to issue such threats. Not only are the threats illegal, but the collection company has absolutely no power or authority to seize bank accounts or your home, and you have not broken any laws to warrant the police arresting you.” “Are you sure?” she asked. “Absolutely!” I assured her. “Let me tell you about a little thing called consumer rights.” It is never acceptable for collectors to threaten people. I have talked about and shared this information before, but with tax season upon us, I have noticed even more of this happening, as collectors prey upon people getting their tax returns back as easy targets. The first thing I encourage all people to remember when...

Have you ever heard the phrase “Aim small, miss small” and wondered what it meant? Or why it should matter to you in the business environment? The phrase, commonly used in shooting sports, speaks to accuracy. If you want to hit the bulls eye of the target, you have to be aiming at the bulls eye. That probably sounds painfully obvious, but as an archer and competitive pistol shooter in the past, I can tell you there is important truth to it. You see there is much more to hitting the ten ring, or bulls eye, than simply pointing the weapon toward the target. You have to have a clean well functioning weapon, your hand steady, your breathing calm, your sights aligned, and you have to pull the trigger just right. If any of these things is less than perfect, the shot will be off the mark and not score as well. The more of these elements that are not perfect, the higher the chance of not hitting the target at all. I remember early on getting frustrated with my coach about some of the little things that didn’t seem very important. I quickly learned that the little things can matter the most. I particularly remember him showing me how he could move the weapon, when extended out and aimed, in a circular pattern about an inch in diameter and still score well, as long as his trigger pull was perfect. This meant that I didn’t have to get too...

If you are asking this question, let me say I understand what you are going through. I have experienced it myself in the past and have helped many clients address the situation, when they experienced it. It won’t be fun, but things can be fixed. The first thing to consider is taking steps to limit the opportunity for it to happen again, by adding a fraud alert or credit freeze to your credit report. I have gathered the bulk of this information directly from the FTC Consumer Information site for you. Here is some information about fraud alerts and credit freezes. Fraud Alerts: There are three types of fraud alerts that you can place on your credit report to put your creditors on notice that you may be a victim of fraud: an initial alert, an extended alert and a Active Duty Military Alert. For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year. Why Place an Initial Fraud Alert An initial fraud alert can make it harder for an identity thief to open more accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit. Three national credit reporting companies keep records of your credit history. If someone has misused your personal or financial information, call 1 of the companies and ask for an initial fraud alert on your credit report. A fraud alert is free. You must...

Have you ever encountered someone that has credit scores that are a little too low to be able to get them a loan? Have you ever told them to go out and pay off the collections on their report, to improve their scores? Have you ever heard someone say that they were going to pay their collections off, to improve their credit scores? If you have ever given someone those instructions, or have heard them say it, or any similar scenario, then please stop them right away. As crazy as it may sound, they may be on their way to a disaster, in the worst case, or spending a lot of money and not helping themselves at all with score improvement, in the better scenario. I know, it sounds crazy that doing the right thing, taking responsibility for your debts and paying them off could be damaging to your credit. But the fact remains, because so many companies, either intentionally or unintentionally, improperly report activity on an account, the general result of paying on or paying off a collection is destructive to a person’s credit. The cause behind this problem is a little thing on our credit reports called DLA or date of last activity. This misunderstood term, in reference to collections, refers to how old an injury that collection is. This is important because, in credit, just like when our body gets injured, a injury hurts the most when it initially happens. Then as time goes by the injury...

Have you ever wondered why your lender, realtor or title agent will tell you not to make a large purchase that involves financing, when you are trying to buy a Home? I get asked about this all the time. It can be a really big deal, so I thought I would shed a little light on why it is important to be thinking about the things you are doing when trying to get that mortgage you desire. A mortgage is likely the biggest financial decision most of us will ever make. It should not be taken lightly. The choices we make can cost us tens of thousands of dollars over the life of the loan. In some cases, the choices we make can eliminate our chances of qualifying for our mortgage, at least for a period of time. So, lets look at a couple of elements that can be big factors in the mortgage process. First, it is important to understand that when you go to close on your mortgage, you will be signing documents that state you have not made any large purchases between the time you were approved for the loan and the closing. That by itself is a critical point. If you buy a car or finance a bunch of furniture for that new home you are buying, before you have closed on the mortgage, you could ruin your chances of actually closing on that loan and potentially lose the house and your earnest money, all because...

Want to know the absolute best tool to build your credit scores? I would be surprised if you said no to that question. Almost everyone cares about their credit, to some degree. And I don’t know anyone that doesn’t want the secret to making their scores improve. Heck, people throughout the world spend billions of dollars every year on self help books, seminars, programs, DVD’s, and so on, in their constant search for the miracle pill, trick or idea that will magically transform their lives for the better. Can there really be a solution that is that simple? The answer is yes. It can really be that simple. Are you ready for the answer? Okay, here it is. The absolute best tool you can have to build your credit score is a credit card. Are you blown away right now? Are you filled with excitement at knowing the answer? I suspect right now you are anything but excited, and are feeling a little annoyed with me. I imagine there are a few of you who feel a little let down by that answer. I suspect some of you are thinking that a credit card is exactly what got you into trouble to begin with. Still others are probably disappointed because you have no desire or intention of ever getting a credit card and may even be insulted that I would tell you to get one. Well, regardless, the fact remains that a credit card has more than twice the power...

Have you ever asked for instructions and then only followed part of them? How did that work out for you? I know I have definitely had times where I thought I was fine without instructions. I grew up in a house of boys. We thought we either knew everything, or that we could figure it out. That is not necessarily a bad thing. We learned a great deal by trial and error and working through things on our own. It often took longer and cost more than if we had just asked for instructions and followed them, but often times that is not a big deal compared to what we gained by doing it for ourselves. But then there are those times when time and money are significant and the quality of the results is important. Not following instructions in those cases can be costly to say the least. This is especially true when dealing with something that we have not been successful with in the past. That brings me to why I am thinking about this today. I have a client that has a boat load of issues that need work on his credit. When we got started, he insisted he wanted the help to fix his credit. The problem came when he didn’t want to follow our instructions. He wanted to do some of it his way. This is similar to asking a mechanic to work on your car but expecting him to use the tools in your...

I read a piece by Pamela Marron the other day, where she drew some attention to the importance of being aware of “disputes” on credit reports and automated underwriting findings. The article presented some good information. Her examples cast a light on the problems that can be created when consumers and credit repair companies dispute information on the credit report. The light she shines in this article exposes what happens when the dispute process is improperly handled, either out of ignorance, as is the case for most consumers, or malpractice, as is the case with many but not all credit repair companies and credit repair type services. I have dealt with many consumers that think that just sending a “dispute” to the credit bureaus will solve all their problems and that nothing else needs to be done. That is understandable. In an ideal world if a potential problem were noted, the response would be for all parties involved to be diligent in correcting the error. The reality is that creditors and the bureaus seldom demonstrate that type of diligence. I am not accusing them. Let’s face it, many consumers dispute a negative account, even when they know there is nothing inaccurate, thinking that by disputing the account it has to be removed and they won’t be accountable for it any longer and won’t have to pay it. When enough of those types of circumstances occur, companies and the bureaus naturally will not assume all disputes to be valid and won't want...

I get asked all the time about debit cards and how their use affects credit scores. Most of the time, it is someone trying to be responsible and build credit. I’m always glad to hear the question, because it at least shows that they are thinking about what things they can do to improve their credit or protect it. So many people don't give their credit a second thought except when they are applying for loan of some kind. Just a quick tip, if you don’t already know roughly where your scores are and are applying for a loan, you have waited too long. I hope that your time line is not very important and you don’t need the loan very quickly, because if you get denied for credit problems there is very little that can be done in 30-60 days to change that appreciably. Oh sure, you could pay down balances today and see the benefit in 30 days. But if you can’t do that, or that is not the problem, it will take more time and expertise. Anyway, back to the subject of debit cards. To make things short and simple, debit cards have no affect on your credit scores at all. I know, I know, there is a Visa or Master card symbol on it and you commonly use them as credit instead of debit in transactions, but that only affects the way they charge you and the amounts you can spend per day or per transaction....

I spend a little time every day reading about what is happening in the world. Every day I see articles about how we need to change the financing to make it easier for people with less than good credit to get financing. I see posts about how credit is unfair. I see posts about how everything is the government’s fault, or banks fault or someone else’s fault. Today I read a post that made me once again think about how things change, and reflect on whether or not those changes are a good thing. The post I read was from a mortgage blog discussing whether you should save for a down payment or pay off debts first. Nothing wrong with that discussion and the piece had some good suggestions. What really got me thinking was discussion on current options for financing. The writer noted that 20% down is a thing of the past and noted several loan options that are available: USDA - no down payment required; VA - no down payment required; FHA 3.5% down payment required; Fannie Mae HomeReady - down payment required as low as 3% for credit worthy, low to moderate income borrowers; 1stHome Illinois - offers $7,500 in down payment and/or closing cost assistance for first-time homebuyers or someone who haas not owned a home in the last three years; @HomeIllinois Mortgage - allows first-time and repeat homebuyers to buy a home with as little as $100 out of pocket. These are the things the writer listed,...

I don’t know why it bothers me to the extent that is does, but I start to experience serious road rage when I am driving down the street or road at night and other cars are driving without their lights on. It has gotten to the point where every time I drive at night I count the number of cars that do not have any tail lights showing and/or headlights on. The average count is 8 vehicles in the 25 minute drive it takes me to take my daughter to work and back. That’s 8 vehicles with no headlights or tail lights showing while driving at night - every night I take her to work. I make a point of trying to let each of them know their lights are not on. After all, my safety, their safety and the safety of everyone in the road is at stake. At first I couldn't fathom how they were capable of doing it. I can’t see the dash of my truck at night if I don’t turn my lights on. The dash lights don’t come on unless I turn them on. Then one night I was driving my wife’s Jeep instead of my truck, and it hit me. Newer cars have electronic dash boards, and so are lit up all the time. My Xterra is older and still has analog instruments and the back lights only come on when I turn on my head lights. The two are connected. The problem for...

I have been seeing more and more articles and posts about what to expect from the housing market and financing over the next year or more. The most recent article I read was from Inman. The takeaways were interesting to me, since I specialize in helping individuals get their credit into shape for getting qualified for a loan and in helping lenders and realtors that have clients with credit challenges get those clients back to them loan ready. The key takeaways noted at the start go the article were: •Mortgage rates are likely to continue to increase throughout 2017. •There will not be any easing in inventory, and affordability will still be a challenge in big markets. •The potential is there for a large number of first-time buyers to enter the buying market, but they will face new challenges. I especially took note of the first and third bullet points, as they could be significant for Millennials, the group that I am seeing an increase in need for credit help. More and more I am seeing young people that would like to own a house for the first time, but their credit is either not very good or nonexistent. Unfortunately, for many of those individuals that I have encountered, I have observed and make no judgment as to why, many are not very willing to take action to prepare their credit profile to be able to qualify for a mortgage. The reason I say this is unfortunate, is in light...

I have often heard it said that time heals all things. But as much as we might want this to be true, so often the reality is quite the contrary. We can sit and let time pass and find that little or nothing has changed. I think the reason so many people experience this is because time is only an ingredient to healing. Time itself does not actually do anything. Time is not dynamic and active. It cannot achieve or accomplish. Time has no action. It is merely an environment for what really matters to happen. Healing is the result of an action, an action that occurs repeatedly or is sustained over a period of time. The action can’t be random or a continuation of the action that led up to the event the now requires healing either. There must be a change in the action, so the results can be healing instead if injury. The challenge so often is that we desire to just have things fix themselves and go away. We don’t want to actually deal with the situation. We don’t really want to change. We want to believe that it was misfortune that resulted in our injury, rather than our actions, so we can keep on doing what we want, when we want, and things get better again and stay that way. I see this in nearly every facet of life, but as a credit restoration professional an credit counselor I see this especially often. People make...

I see it all the time. In fact, I see it every week. Every week I see clients that are eager to buy a new home who get denied for a loan due to credit issues. In almost every case, there is one foundational problem – their credit scores are too low to qualify for a mortgage. The credit score is almost never the only problem in their way, but it is the most foundational one, because it all starts there. If you do not have a qualifying score, generally speaking, nothing else matters. You are not getting a mortgage. However, that is not what I am referring to that I see every week. What I see every week are people that make some very odd decisions. I’ll give you an example as an illustration. I talked to a couple that wants to buy a home very soon. Their time goal is to be buying a home in the next two to three months. They were sent to me because their credit wasn’t good enough to get qualified for the mortgage. I had not seen a credit report yet and was meeting with them to talk over what they thought they knew about the problems on their report. As we talked, the couple noted that their scores were a little too low to qualify. They indicated they had several credit cards with high balances, some collections with balances, possibly some accounts that were not theirs, and they had been told...

The water exploded, sending waves of spray in all directions. The big fish had launched itself into the air, thrashing its head from side to side as it tried to throw the object that had ahold of it from its gaping mouth. The black and silver monster seemed to hover above the surface of the lake, as it moved in a violent dance of head and tail whipping from side to side. Then, as gravity took over, the fat beast crashed back to the depths to try and run from it’s captor. The mighty fish surged through the water for one last powerful run and moments later was hauled into the boat. This probably sounds a tiny bit like an epic battle with a massive beast, the likes of which are chronicled in stories such as Moby Dick or The Old Man And The Sea. The reality is this was much less epic. This was a short battle with a Large Mouth Bass on a lake in Florida. That was one of many battles fought that day. In fact, that day was fairly epic in scope, as my buddy and I caught 82 bass between the two of us, all in the 3-6 pound range. None of them were huge, but all were really nice quality fish. This wasn’t the first time we had this kind of success. We had a day a few months before when we caught 76 together. Those were fantastic outings filled with great memories. One...

I get many people, including lenders and realtors that get confused about Bankruptcy and how it affects your credit score. It is understandably confusing. We know it is supposed to give you a clean slate, so expect that once the BK is discharged, that everything is clean, but it is not. When the subject of Bankruptcy comes up I first want to assess if it is even necessary or appropriate. I have had people say they need to file BK when they only have two accounts, with balances that ate not huge, getting out of control and everything else they have going on is in good shape. That would not be the first thing I would consider and I am always glad to be able to talk to them and guide them before they make a rash decision that could be devastating in the short term. One client I had, in that very situation, with a little guidance and effort, was able to get those accounts back under control and have loan ready credit within a matter of months. He had a new home within ten months. We saved him the two years or more that a bankruptcy would limit him for, and he also escaped the cost of the BK and the damage that it would do to all the account relationships he had that were is good standing. Bankruptcy has a very important and appropriate place in in the scheme of finances, but when to use it is...

Something I hear quite often, when helping people with their credit, is that the circumstances should be take into account, that it is not fair to penalize someone for something that was, for the most part out of their control. This isn't unique to credit, I hear similar comments in conversations relating to race relations, illegal immigration, responsibility to work or other organizations, and so on, with respect to accepting behavior that is socially unacceptable, irresponsible or even illegal. I think, without assigning blame anywhere for a person’s problems, that when people say things like this, in these arenas or in credit, they are talking about a need for compassion. There is no doubt in my mind that there is a serious need for compassion in the world. But I wonder if the concept of compassion in these cases is not very two dimensional and distorted. I say this because clearly the message being presented is one of acceptance as opposed to the real meaning of the word compassion. Compassion is sympathetic pity and concern for the sufferings or misfortunes of others. The challenge is, that more often than not, people say that to have compassion we must demonstrate understanding and thereby tolerate or accept behavior that stems from those sufferings or misfortunes. In fact, for many, acceptance or tolerance is not enough and the behavior should be seen as okay or even right. An example of this would be to say that to enter a country illegally is permissible...

Hurricane Matthew is steaming it's way along the east coast of Florida, tearing up the shoreline and coastal developments as it goes. Because of the unique track of the storm, those of us in central Florida were anticipating one of the worst hurricanes to hit the are in more than a hundred years. We were told to brace ourselves for the possibility of winds in excess of 100 miles per hour, heavy rains, flooding, extensive power outages and everything else that comes with such a storm. People were urged to evacuate low lying areas, especially those near rivers, and moble homes, as the storm approached.Floridians have seen their share of tropical storms and hurricanes. The majority of those who live in central Florida have seen these storms come and go never experienced the major impact that was forecast. As a result, there were many here in central Florida that once again did not really worry about the warnings and preparing too much and instead held hurricane parties.       Matthew was expected to make landfall near West Palm Beach and scrape the coast as it moved north, allowing the storm to continue to build from a category 4 hurricane to possibly a category 5, instead of losing energy as it hit land. I watched the progress outside periodically through the night, waiting for the winds to start howling. They never did. It turned out the storm track had moved east, about 20-30 miles further off the coast than initially thought,...

Our credit is an assessment of our financial behavior over time and the scores we get are an assessment of how much of a risk we are to lend to. There are a multitude of ways we can build or destroy our credit. Much like anything else in life, it is much easier to destroy our credit than to build it. We can destroy things in a matter of seconds. Building tends to take time, especially in credit, where time is the key to everything. When we want to build our credit scores, we need to take actions that will result in positive information about our financial behavior being reported to the credit bureaus. One of the most common ways to do this is to get a credit card. Let's quickly look at why credit cards are  great tool for building our credit scores. Our credit scores are like a pie cut into five segments of varying size. Each segment or piece of the pie is a different size to reflect the degree of power it has in the over all score. Credit cards are powerful because they affect more pieces of the pie than anything else. First is payment history - which includes nearly every account of any kind reporting on your credit, including credit cards, making up 35% of your score. Next is balance to limit ratios or utilization - which make up 30% of your score. This segment is basically only affected by credit cards. If you don't have any...

I heard a story as part of the sermon at church this past week. It had some important lessons for us as Christians, but that is not the angle I want to talk about today. The story also cast a huge spotlight on our country for me.This is not a political piece. Regardless of you party affiliation, this message is important. I hope you value your liberty and freedom enough to at least consider what I have to say, with a mind open to possibilities, and I pray a little grace if this sounds like a little bit of ranting at times. I love this country and all the people of this nation, and it can be a little bit of a roller coaster ride. First, I will briefly paraphrase the story for you.There was a town on the Ireland shore. The seas were cold and could be very violent and ship wrecks were very common. In the early age of the town, the people saw a genuine need for victims of ship wrecks to be rescued and cared for. They committed personal resources and the town, as a whole, responded to the alarm when there was a wreck, day or night.  The town took great pride in helping those in need and celebrated with those they rescued and mourned over those lost. The social fabric of the town centered around community and taking care of local needs and had become a beacon for achievement in helping those in need. But in...

Many people get hung up on thinking the dollar amount of their collections makes a difference in their credit score and how challenging it will be to clean up their credit - this is a trick question - there are multiple elements that would affect the answer.First, let's consider the most direct path. If I have only one collection on my credit for $10,000, from 14 months ago, and another person has only one collection, from 14 months ago, for $500 on their credit and all other elements of our credit are virtually identical, who's credit score is higher?       The answer is that our credit scores should be essentially the same. The amount of the debt for each collection has absolutely no affect on our credit scores. Now this might stop a number of people in their tracks to question that. I have heard many people talk about how their lender told them that the amount owed on a collection mattered. It does matter in the process of qualifying for a loan. The lender will only be able to accept a certain amount of collection debt for a given loan product. It also affects your debt to income ratios for determining how much you can borrow etc.But when we are talking about your credit score, the dollar amount of the account has no affect on determining your credit score.What if we changed things slightly? What if, in the example above, the $500 collection was from 5 months ago and...

I get asked questions about credit all the time. One of the most common is from lenders. They say " Paul, can credit really be fixed?"The short answer is, yes it can.Let me start by giving you some stats about your credit reports.In Feb 10, 2013 CBS News reported about A study indicating as many as 40 million consumers have a mistake on their credit report. Since then there have been a few follow up studies. In the latest update in 2015 the FTC  noted that, in the case where an item was disputed as inaccurate with the CRA's, "...of these consumers (nearly 70 percent) continue to believe that at least some of the disputed information is inaccurate."Around the same time as the initial reports were released, the U.S. Government reported that, One in four consumers identified errors on their credit reports that might affect their credit scores - that's 25% of consumersOne in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports - that's 20%Four out of five consumers who filed disputes experienced some modification to their credit report - that's 80% saw their reports modifiedSlightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report and Approximately one in 20 consumers had a maximum score change of more than 25 points.That's what the stats say, and those numbers...

Why are my scores different for the three credit bureaus?This is a very big question and confuses many people when they look at their credit reports and scores.I will give you the answer according to FICO, the source of the scoring that most lenders use.       In the U.S., there are three national credit bureaus (Equifax, Experian and TransUnion) that compete to capture, update and store credit histories on most U.S. consumers. While most of the information collected on consumers by the three credit bureaus is similar, there are differences. For example, one credit bureau may have unique information captured on a consumer that is not being captured by the other two, or the same data element may be stored or displayed differently by the credit bureaus.A predictive FICO scoring system resides at each of these credit bureaus from which lenders request a FICO® Score when evaluating a particular consumer’s credit risk. The FICO scoring system design is similar across the credit bureaus so that consumers with high FICO Scores on bureau “A’s” data will likely see a similarly high FICO Score at the other two bureaus and conversely consumers with lower scores at bureau “A” will likely get a low FICO Score at the other two bureaus when the underlying data is the same across the bureaus.When the scores are significantly different across bureaus, it is likely the underlying data in the credit bureaus is different and thus driving that observed score difference. However, there can be score...

"Why Should I Check My Credit Report?"I get asked this question a lot. On one hand, it seems obvious to nearly everyone that knowing what is reporting on your credit report is important.But, on the other hand, that is kind of like saying it is important to eat healthy. We all know it. But that is not necessarily enough to get us to do it.So lets give checking our credit report a little meaning and value.I’ll give you five reasons it is important to check your credit report:1. Identity Theft -                            You would be amazed (or maybe not) by how many people have their identity stolen on a daily basis. According to an article published by the Insurance Information Institute, it is estimated that 12.7 million people got their identity stolen in 2014 totaling $16 billion, slightly down from 13.1 million cases in 2013. You don’t want to be one of those. Keeping a close eye on your credit can help catch a thief quickly, and save you a lot of work trying to repair the damage.2. Wrong Information - This is a little like identity theft, in that you have things reporting on your credit that have nothing to do with you. Those things can be very damaging to your credit. It is very easy for things to get onto your report that are not yours. Think about it. All it takes is a simple typing error...

I had someone pose an interesting question. "Can your credit affect your taxes?" At first, I was inclined to say no. Your credit score does not affect your taxes at all. But then it got me to thinking about it further. I don't know if many people have given it much thought, but there is a way that your efforts to address items on your credit could have tax implications. I am talking about efforts to settle debts that appear on your credit report ( heck, even those that don't show up on your report for that matter). Just about every client I have ever worked with has had at least one collection with a balance on their credit report. Most of those clients also wanted to get the debt settled, so they wouldn't have to worry about it any more. I respect and applaud their desire to make things right. What many people don't realize, is that when you settle a debt that results in the forgiveness or cancellation of a debt of more than $600, the company can issue you a 1099-C Cancellation of Debt form. This would also be reported to the IRS. The amount of the debt forgiven or cancelled, must be reported as income on your taxes. If you fail to properly handle those debts, you could be looking at a very large tax bill, or worse, penalties for not paying the taxes due. There are many types of debts that can result in receiving...

Credit card debt and how we handle our credit pair payments is a big factor in our credit scores. About 98% of all the clients I have worked with have been in need of at least a little coaching on how to properly handle their cards. I'm sure it would not surprise any of you to know that almost 100% of clients, that already have credit cards, think that they know the right way to use them. The interesting thing is that most of those clients benefit from making some changes to what they think is so right. Some clients think you are supposed to spend lots on your cards each month or use them many times each month to get the most benefit. That is incorrect. In fact that kind of behavior can crush your credit. Just so you know, one use of the card, for even a tiny purchase such as a soda, is more than enough activity to help you. More use gains you nothing on your credit, and can create a problem for you, if not careful. Anyway, back to those clients that I work with and how they use their cards. Many of those clients tell me that they pay on their cards or pay off their cards at the end of each month, so there is nothing to worry about. That is the thing I want to caution you about today. I would like to help you see the flaw in that line of...

There are a bunch of credit scores out there that tell a story about each of us to potential lenders and others. There are scores used for renting an   apartment, scores for buying an automobile, and of course we know about the scores for getting a mortgage, just to name a few. All of these scores, that professionals pull, have an applied purpose. These scores are tools for making a specific business decision. Outside of the arena they are designed for, they are essentially useless. There are some that might want to argue that a bit, but put into context, there is little to debate. A score is not useful if it can not be used for an intended purpose. So, though the score we get when our credit is pulled for an auto loan is very useful for qualifying for the auto loan, it is meaningless for trying to qualify for a mortgage.This happens because the scoring algorithms used for each type of use are different. For example, the scoring for an auto loan will weigh more heavily your past history with an auto loan. That same credit information is looked at differently when applying to rent an apartment, which looks at history relating to rental history more heavily. The same is true when you are applying for a mortgage.There are also some scoring models designed to include individuals with less conventional credit history, who would otherwise not have a score. These will take into account reported rental history...

It is time to ask some questions.What kind of a person openly lies to you or cheats and steals from others? What kind of person considers themselves above the law, but thinks others should be held to it? What kind of person would take an oath and then openly defy that oath? What kind of person holds others to a different standard than they hold themselves? What kind of person says they believe something and then does not reflect that belief in the way they live their life and conduct themselves professionally and socially? What kind of person cheats on a spouse or physically abuses a child, spouse or significant other? What kind of person would use anger over something that happened to someone else as an excuse to loot and burn businesses? What kind of person says that it is my right to choose to kill another human being and not be accountable for the choice that resulted in that person's existence? What kind of person thinks that because another person was killed by a cop, that is is acceptable to target and murder cops? What kind of person thinks that death threats are acceptable because a business suggests vegans not apply for a job, when the job entails tasting foods not in line with that diet choice? What kind of person would choose to be represented, before the entire world, by someone who has contempt for the law, violates public trust, uses public service for personal gain, perjures...

“There is nothing that can be done” she said. “We already disputed the debt and it turns out we do really owe it. Besides, I know how to read a credit report and there is nothing that can be done.”Have you ever heard this kind of comment from someone? I have, many times. Commonly it stems from a feeling or sense of pointlessness or futility when things are just not going according to plan and things start to feel hopeless and we feel defeated.       I think most of us have been there, to some degree, at one point or another. It is always a challenge, as we are faced with giving up or persevering.In this case, the young woman I was talking to and her husband were facing a situation where their credit scores were preventing them from getting a home loan. Their scores were about 40 points from where their lender wanted them to be to get a loan for them. That is not too far off and very reasonable to overcome, in most cases. She had several issues on her credit, that made it very clear that she needed repair help, and that she could get qualified. But they needed both incomes and therefore both credit scores to qualify for a loan. The challenge was her husband’s credit. There were only two or three collections on her husband’s credit report, and as far as she was concerned, only one of them was having any real affect...

I have worked with thousands of clients who have come to me with all kinds of credit issues. In every case we have been able to help them get those issues corrected and help those clients get their credit loan ready. There are some things that people do that can have epic impact on their credit. Bankruptcy and divorce are two of the biggies. It should come as no surprise to you there. We all have heard the horror stories about one spouse holding the credit of another hostage, or creditors failing to properly report the accounts that were included in a bankruptcy, and as a result trashing a person’s credit. One very big action, that does not immediately come to mind for people, is co-signing on a loan. I understand why people do it. But, from a credit perspective, I have to strongly advise you never do it. When you co-sign a loan, you are opening yourself up to a pandora’s box of potential problems and credit pain.             Most of the clients I have dealt with, that have co-signed a loan, are parents that signed with one of their children. Usually they have signed on a note to purchase an automobile. Now, I’m a parent, and I get it. You want to help your child out. You want them to have the best opportunities. You want them to have it better than you did. But the bottom line is that they are never really...

As another celebration of the birthday of our wonderful nation comes to a close, I am so thankful to live in this country, but I am sobered by the profound amount of anti-American news flooding to my attention. One might think that I am talking about ISIS, terrorism, radical Islam, bombings and so on, but I am not. I am referring to the amount of illegal and unethical behavior, lies and corruption that our government leaders seem to eagerly embrace, and the state of the people of this wonderful country. There is scarcely a serious voice anywhere in the government demanding that their peers be held to some level of accountability, making those that don’t fully embrace or engage in such activity no less culpable. I think to myself that I am glad that I do not work in the FBI, the Secret Service, the Justice Department, anywhere in the judicial system, or any other part of the government, as the embarrassment would have me rethinking my career choice. But then I realize that I am not saved from the embarrassment by not having a job in the government. The leaders of this country, by their actions as our leaders, have somehow turned being an American into something dirty, cheap and sleazy, something to be embarrassed about (well, maybe not so much about being an American as being embarrassed by the words and actions of the people and government  of our country and how we are seen as a result)....

Credit scores are an important part of our daily lives.They affect our ability to get a mortgage, get an auto loan, a personal loan or a credit card. They can even affect getting a job or our insurance rates. If, our score is bad, or worse yet, we don’t have a score, things can get difficult.So, it is not surprising to me that people wonder what it takes to get a credit score. What is surprising, is how the perception is presented that, for many people,  it is really hard to have or get a credit score. Just a heads up, I may travel down a rabbit trail at some point. It is important to me that people get the help they need. In that zeal I can get a little worked up, so please show me a little grace the it happens.There is not really a complex formula to creating a score. Basically, you have to have something positive about your financial activities being reported to your credit report.According to FICO’s website, as long as your credit report contains the following minimum requirements, you should have a FICO credit score being developed:    - At least one account that has been open for six months or more    - At least one undisputed account that has been reported to the credit bureau within the past six months.    - No indication of decease on the credit report (Please note: if you share an account with another person this may affect you if the other account...

“What Is Your Problem!”This is what I was yelling to the driver who thought it would be fun to suddenly slow to 35 mph while the rest of us were doing 65 mph or more.Of course this had a whole line of cars suddenly slamming their brakes to avoid a collision. What was this guy thinking? He even was doing it with a child sitting in the front seat! We were on a turnpike in Florida in a 65 mph zone. Admittedly, I was doing closer to 70 and the driver in question was in the left lane maybe driving 64 mph. Common courtesy and standard driving etiquette, not to mention it is the law, would suggest that slower traffic should move to the right and yield to faster traffic.Not in Florida. This concept seems to be completely absent from the fold. Here drivers think they should block traffic in the “speed” lane and pass at obscene speeds on the right side instead of the left, even if it is the on or off ramp lane. So, the driver got an attitude about the rest of us thinking he should move over. Needless to say, there were more than a couple of irritated drivers on this particular morning.Anyway, you are probably wondering what this has to do with credit. I’ll tell you.                       Credit Scores tell the world how responsible you are in life.Like it or not, you are being judged by your behavior...

I get asked all the time about credit. One of the most common is " Can I repair my own credit?" The simple answer is yes. Yes you can. Now, why would a professional, with one of the best credit restoration companies in the country, say such a thing?Well, the reality is that there is nothing that you pay other people to do, that you can't do your self.You can fix your own car, drill your own teeth, give yourself shots, do your own taxes, represent yourself in court, grow your own food make your own clothes. Heck you could even conduct your own brain surgery, if you really wanted, though I doubt even the greatest brain surgeon would operate on themselves instead of have a colleague do it.     The list is endless. The real question though, is if you have the time and knowledge to do it at all, and if is sensible for you to go it alone. When it comes to credit, the perception that "all it takes is a few letters", leads many people to believe they don't need a professional or that they should not have to pay for their help. The perception is made worse by credit repair companies that promise unrealistic  results overnight, making it sound too easy.Heartland Credit Restoration has conducted free consultations with thousands of potential clients. Some just needed pointed in the right direction. Some were not ready for repair and we declined to take them on as clients. Many have engaged in repair and I personally have...

“I have a prepaid credit card. Will that help my credit score?”That is a question that I get asked quite often, as I am working with clients to help them build their credit scores.The cards that they are referring to, are like those that you can find in the Wal Mart check-out line. These cards are then loaded with a balance in exchange for cash you give the cashier. They can then be used much like any other credit card.Clients ask me this question when encouraged to start a credit card, to help build credit.The important thing to know here is that NO, they do not help your credit score.The reason is twofold. One, a prepaid card is not a credit line. It is just like a checking account, where you are spending the money you have there. You don’t have minimum payments to make or a credit limit.Credit scoring is based upon you being extended a line of credit, making payments on-time, keeping the account active for a long time and keeping your balances low compared to the limit. A prepaid card does not do this.Two, prepaid cards do not get reported to the credit bureaus. In order for anything to help or hurt your scores, the information has to be reported to the three major credit bureaus.Having a active credit card reporting on your credit is an important part of helping build your credit scores. But a prepaid card will not help. Prepaid cards often get confused with...

    Before I start getting comments about what forum this gentle rant is appropriate for, this is definitely about work and our work life, among other things. The things that form the foundation of what we believe, are the foundations of what ground our ethics and our conduct in the world and the world of business. Personally, I believe that without this foundation, there is little that can be trusted in the world or business.    I experienced something today that is becoming more and more common and gives me great concern.   I had an encounter with a couple of people that were talking about how hypocritical Christians are and that, as Christians, we are supposed to love all people and are supposed to accept all of their behavior out of love. I am concerned about this because their statement could not be further from the truth. I am also concerned by how this mentality is daily becoming more prevalent in our country, and I believe it to be a core reason behind so many problems we face in society today.   I’m going to go out on a limb here and risk alienating you right away here by saying that The United States of America is a Christian nation. I don’t mean by religion and I don’t mean by the number of Christians in our country. I mean in core fundamental beliefs that help to form the foundation of our founding documents and principles for the United States of...

What A Rip Off!Hmmmm…Sounds like you have had a bad experience with a credit repair company.Do any of these statements sound familiar?:“They told me it would be no problem, but then nothing got removed!”“They completely ignored the proof I gave them and the account never got changed!”“They misled me to get me started and then charged me up-front fees!”“All they did was sent out a bunch of generic letters. I could have done that!”“They dragged their feet, only doing a little work at a time, and a year later not much has changed except the amount of money they charged me!”“I never heard from them. No eduction, no guidance on what I should be doing, no plan, only an email saying they are working on it and a bill!”“They weren't looking out for me at all!”“They only seemed to work if I complained!”“They only disputed a set number of accounts each month.”“They were rude and judgmental!” “When they finally said I was done, I got my credit pulled and still couldn’t qualify for my mortgage because they didn’t remove the dispute comments!”“I referred my client to them for repair, and then never heard from the repair company or the client again!”“The repair company told me they don’t remove dispute comments. Why didn’t they tell me that at the start? I could have gone to a company that actually does a complete job! What a waste!”So what is the answer?The reality is that every credit repair company is going to hear...

Have you ever heard someone talk about the DLA or date of last activity of an account, having an affect on your credit?Some of you may have heard about it and some of you maybe not. Date of Last Activity has a big impact on your credit because it is basically all about payment history, and payment history affects 35% of your credit score.The challenge with Date of Last Activity, is the term has changed meaning over time and creates a lot of confusion.Date of Last Activity used to basically mean the last time anything happened with the account, some kind of "activity".A problem arose though.Companies, especially collection companies, would essentially constantly update the date of last activity of the account. This would make it look brand new on the credit report, which caused two problems for the consumer.First, because the account looks brand new, it has the most negative impact on the credit score possible.Second, the time clock that determines how long the negative item can be on your credit report, resets.You see, the law says that a potentially negative item can only remain on your credit report for seven years. This is so that we as consumers are not forced to carry the burden of a past accident or mistake forever, and allow us to recover and move forward again.If the clock keeps resetting, the negative will never go away. The federal government, when they became aware of this abusive tactic, changed the law in 2009.At that point the DLA...

The Magic Wand of Credit RepairThis is what most people want and many are expecting, but is it possible?“I just want to pay someone to clean all the negative stuff off my credit report.”You probably already have someone popping into your mind that thinks this way. I know I have met more than a few.Everyone loves to fantasize about credit repair being that easy, but most understand that magic wands only exist as toys.Still, there are more than a few people out there that want to think that because they throw a little money your way to work on their credit, that you are going to deliver to them a totally clean credit report, free of problems and do it tomorrow, even if the information being reported is correct.These are usually the same people that believe that there is a magic pill to make them go from fat and out of shape to super model over night too. But that’s another story.                        Part of the key to disputing items on your credit, and the primary reason pretty much every credit repair company out there focuses on disputing in some way, is that if the company reporting the info can not validate what they are reporting with evidence, then correct or not, the law says it has to be deleted. You basically can only report what you can prove. Disputing is testing their record keeping.Credit repair companies have been able...

  “WHAT! How Is That Possible?” "My husband has 3 new collections and a new 30 day late showing up on his credit and I was only late once." That is the way a conversation started with a couple of clients, husband and wife, as we started to asses their credit situation and develop a plan. She was not happy with what she was seeing. Part of our plan includes education. This was one of those challenging educational moments. You see, she saw over a 100 point drop in her mid score from a single 30 day late hitting her credit report, and her husband only saw a 37 point drop in his mid score. If that seems crazy to you, I understand. I think that there is something important to mention as well. Her score is still almost 700, and his is 501. To some of you, it all makes sense now. And to others, you are even more confused, or maybe don't see what that has to do with anything. I have always said credit is very simple, but rarely is it easy. This is an example of why it does not seem easy, at least from an understanding stand point. Fear not though. I will make it a lot easier for you. Our credit scores are not a continuous line from 300-850, with all of us just falling on the line somewhere. It is a bit more detailed than that. Our credit is more like a line...

A Friendly WaveAt first I though, “That must be exhausting”. But I soon found I looked forward to it.Every week I drive down a particular street in Lakeland, Florida, on my way to my Business Networking International chapter meeting. On particular corner, there is a woman who works with the sheriff’s department as a crossing guard. The reason this particular woman stands out to me, is that she is always waving to the passersby. I have never passed her when she is not waving. And I don’t mean a slight pageant type wave. I mean an energetic wave that demands notice.I imagine she does it to draw attention to her task. If she is getting noticed, then she is succeeding in making the commuting traffic aware of and more attentive to pedestrians, making her more effective at her job.But it is clear to me that she does it for another reason as well. She seems to have a genuine desire to have a positive affect on each person driving by.I admire her persistent and cheerful effort. I look forward to seeing her each time I pass the intersection. It brings a sense of warm greeting to me every time I pass. In fact, it is contagious for me. Now, every time I pass by her, I cheerfully wave back to her, though I'm not sure she sees me.She has succeeded in touching my day and I appreciate that. I hope that my waving in response does the same for her,...

Credit Counseling vs Credit RepairAs a professional in the credit restoration industry, I often run into situation where clients have either been through credit counseling or are wondering which one they should use - repair or counseling.I am especially glad when they ask before they make a decision, as it can have a huge affect on their home buying goals, their credit and their stress level.First, I think it is important to know your rights when you re considering working on your credit and your debts.I got this information from an article by Selene Garcia that she wrote for Guaranteed Rate, and I though she laid it out nicely.Credit RightsYou have the right to:    •    Know what your credit report contains (e.g. accounts, payment information etc.).    •    Ask for your credit score. You will have to pay for this service.    •    Dispute any inaccurate information reported.    •    Request the credit bureaus correct and update any inaccurate or dated information. The credit agencies must comply, typically, within 30 days.    •    Credit privacy. What this means is, any employers (or potential employers) must give the agencies your written consent in order to access your credit report.    •    Limit the number of pre-screened offers from credit card and insurance companies. To do so you may call 888-5-OPTOUT (888-567-8688). Or visit OptoutPrescreen on the webNow lets take a brief look at the two choices - Credit Counseling or Credit Repair.Credit Counseling AgenciesCredit counseling agencies tend to serve two basic functions. They educate consumers about ways to handle their finances and manage their debt, and commonly they...

Simple Is Not Always EasyBut using the right tool the right way can sure make it seem that way. Credit is no different.Many of you may have heard a rumor that there are going to be some changes to the scoring algorithm that lenders use to approve us for credit.It has a lot of people excited, both in a good way and a bad way.A new system has the potential for more people to be able to get financing that otherwise would have been excluded, because their files have little or nothing in them to create a score. This makes those who are in that group happy, and has others worried.Those that are worried are concerned about a number of possible issues including; adding risk by relaxing lending and scoring standards, opening up a whole new area that we need to monitor for errors, invasion of privacy, and the potential for landlords to use reporting of rent to hold renters hostage, so to speak.I see merit to the views and concerns from both sides, and will say that I think it should be unnecessary.Why do I say such a thing and utterly avoid the multitude of possible discussions and debates that are ripe for the picking here? Well, I will reserve the right to visit those later. I will say one thing though.Credit is a tool. It should be looked at as nothing more than that. If you look at it this way, the rest of the worries and concerns...

“But My Insurance Should Have Paid That!”This client was screaming at me as we talked over the numerous collections that were showing on her report. Her lender had referred her to us for credit help, so we could get that client back to them for the loan, "loan ready".I was in the process of going over her report with her line by line to get her side of the story for each account.We had just come to a bunch of accounts that appeared to be medical bills, and I asked her if she was familiar with those accounts.She told me yes, she was familiar with them.I asked her if they were really hers or if maybe they belonged to someone else.She said,”Oh they are mine. but I’m not about to pay them.”She just stopped there. she didn’t offer any further information or explanation. I was wondering what I was missing here. Why would she admit the bills are hers and yet have no intention of paying them?So I asked her, “Why, if the bills are yours, would you not think you should have to pay them?”That is when she started screaming. This was obviously a sensitive issue with her. As she was screaming about the details she said, “I had insurance at the time and it should have been covered by my insurance!” She had received bills, but ignored them because she expected her insurance to pay them. But she had never talked to the hospital about it, or gotten...

  “Lost a planet Master Obi Wan has. How Embarrassing.” A scene from Star Wars points the way to moving up to the top of the loan origination rankings. Two loans per month? Two loans per month? Wow. That is a number that really surprises me. What does this have to do with Star wars? I’ll get to that. This is short. Be patient. Two loans per month. That is the number of loans per month that separates the top third on average and the bottom third on average, when looking at the top 150 individual mortgage originators in the nation. That is according to the 2014 Stockman Guide rankings. I have to admit that I thought it would be a little more than that. Maybe I am a little out of touch since my mortgage origination days, but I thought the number would be more significant. I know a lot has changed over the last 15 years in lending, but I would be really frustrated with myself if I missed out on being in the top 50 originators in the country by an average of only 2 loans per month. That got me to thinking about what the difference would be. I know that we only have so much business that comes our way, and that bringing in more business can sometimes mean a much greater advertising expense. But that would also mean that if I want to improve the number of people I can help get a mortgage, then...

“Pay Now, Or Else…..!” “We are going to have the police come and arrest you!” “But I don’t have the money right now to be able to pay it.” she said. “It doesn’t matter!” demanded the voice on the other end of the phone. “You have to pay today or we will have you arrested and the seize your bank account and your home!” “What do I do?” cried the young woman when she called me for credit help. “I don’t have that kind of money.” She was practically in tears with fear over the threats that were issued but the collection agent on the phone just a few minutes earlier. I have seen this scenario many times, when working with clients to repair their credit. Though it still angers me a little that companies will treat people that way, I also laugh to myself, as now that company is right where I want them for my client. I told her not to worry, that everything will be alright. “You see,” I said calmly, “It is completely illegal for the collection agent to issue such threats. Not only are the threats illegal, but the collection company has absolutely no power or authority to seize bank accounts or your home, and you have not broken any laws to warrant the police arresting you.” “Are you sure?” she asked. “Absolutely!” I assured her. “Let me tell you about a little thing called consumer rights.” It’s never acceptable for collectors to threaten people!...

  “I Always Pay My Bills!” I could almost feel her finger poking me in the chest through the phone. This happened as I was talking on the phone with a potential client that was referred to me. I was asking her questions about what she thought her credit was like and what might be there to cause her scores to be low. The irony here was that I was looking at a copy of her credit report. She knew this. I was going through the report line by line with her to get her side of the story for anything that was potentially negative. I had just started to ask her about collections and if she had any accounts that were behind right now. It is important that I know the financial position, if they are keeping current and so on, of a client when considering taking them on as a client. Our job and desire is to help, not make things worse. So I was just starting to ask about this and she shouted through the phone that she ALWAYS pays her bills. I told that was good to hear, and I began asking if she was familiar with each account, as she then might be a victim of identity theft. She then proceeded to tell me she was aware of each account, as I read them. Most of them were medical collections and for co-pays, not large bills. Somehow, she thought that she should not have to pay...

“I Wasn’t Very Late!” If you’ve ever played Jenga and watched a tall tower crash to the table, I’m sure you can picture my face. This particular client had been referred to me by a loan officer friend of mine. Things had started out as a pretty straight forward program. The gentleman was about 30 points shy of being able to qualify for his mortgage, and we discovered a small group of collections reporting on his report that were not his. This should be a pretty cut and dry endeavor, I remember thinking to myself. That is always a dangerous thing to let yourself think. And I have been in the business of credit restoration long enough to know better. But we had 4 collections showing on his report that were not his. We had documentation to prove that they weren't his. To top it off, they were each less than about a year old, and therefore were creating a significant impact on the scores, in the grand scheme of things. It was very reasonable to think we could be looking at 40-50 points improvement, once they were removed. Then I heard my client utter those words that you never want to hear, “I wasn’t very late”. There was that Jenga tower suddenly making it’s painfully slow and unstoppable crash to the table. You see he had let a payment on a credit card slip his mind and he didn’t pay it when he normally did. In fact it was...

“But I Gave The Car back Voluntarily!” “I don’t even have the car any more!” This was the line of reasoning I was receiving from a client that I was working with. She had an auto and she had gotten behind on payments. When the bank was threatening to repossess the vehicle if she did not start getting caught up on the payments, she voluntarily gave the car to them. I was discussing with her some ideas and options to trying to get the account settled and maybe deleted. The challenge here though, was that she didn’t think she should have to pay the debt, since she gave the car back to the bank. “I understand you feel that way.” I said. “But lets look at it another way. Suppose I borrow $1000 from you, to buy a really cool plaque with a rubber talking fish on it that sings when activated. After buying it, I use it in my “Man Cave” and all my friends love it.”                               “Now a few months have gone by and I have not paid you back yet. So you get a little frustrated and threaten to take the plaque if I don’t start making payments as agreed. Do you really want the plaque? Or do you want your money?”   “The money.” She responded. “ I wouldn’t want the silly fish thing!”   “Okay.” I said. “So lets say...

“He Held Me Hostage!” $30,000 in renovations to her house. Were they all about to be lost? That was the question going through her head now.. She was in a state of despair. She had been working for months to fix up her house, including a total kitchen remodel. Now she was being referred to me because her financial situation had changed and she needed to refinance her mortgage after her divorce, or she was going to loose it. Her situation was unique to say the least, at least with resect to the seriousness and urgency of the situation. You see she had been divorced about six months ago and had been awarded the house, among other things. Her Ex had been ordered in the divorce decree to pay off the cards, which he had done, and remove her from those cards so they were only in his name. The divorce was completed and as far as my client was concerned, she was well on her way into the next chapter of her life. She had some money in her pocket, her own home, and was giving it a face lift to celebrate the new direction of her life. She was finally happy, after a long time of challenge, or so she thought. The problem was, that she was also supposed to get the house refinanced into just her name and had not yet. Now she was facing a financial need to do so and for some unknown reason her...