Paul Yamilkoski

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A Road Map To Better Credit


credit help

Do Prepaid Cards Help My Credit?

“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.
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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 “secured” credit cards, because secured credit cards require a deposit to open them.

However, the difference is that you are not spending the money deposited to open the card. You are being extended a credit line, commonly of the same value as the deposit. The credit line is “secured” by the deposit, much like a auto loan is secured by the vehicle itself.

A secured credit card can be a very good tool to building your credit, when you are not able to qualify for an unsecured card.

If you or anyone you know is facing credit challenges and would like so help, Heartland Credit Restoration is a great place to start. Call or email me for a free consultation. The same goes for those of you who have clients with credit challenges. Forward their contact info to me and I will be happy to give them a free consultation and see what we can do to get them back to you with loan ready credit.

Please share this with your friends and contacts on social media. I also welcome comments and encourage you to feel free to let me know if you have any questions. In the mean time, I hope you have a wonderfully blessed day!

What A Rip Off!

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.”images.jpeg
“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 something like this at some point. People make mistakes and clients get unrealistic expectations some times.But a good, reputable company will be up front and transparent with you. And when mistakes happen, and they will, they will be willing to make sure they are corrected.

If you are getting fast talked or pressured, that should tell you something. It is also important to ask questions, so you have a reasonable set of expectations. 

Remember, credit repair is a process that takes time to run it’s course. Most of us have been working our whole lives to get our credit to where it is today. You are not going to change that over night. Some companies will claim they use the Fair Credit Reporting Act and other laws, as if that is a magic wand that only the have and use. Every repair company uses those laws. Some are just more efficient and productive than others. 

Those laws also give creditors 30 days to respond to a dispute or request more time to address the dispute. That alone tells you claims of full repair in 30 days are absurd. Run the other way.

images.jpegThere is also some truth to the phrase – You get what you pay for. If you get too cheap, you likely will not be happy with the results. But don’t over spend either. Just because a company charges a lot does not mean they do a thorough and compete job. 

I would encourage you to look at credit repair as an investment in your future. A good credit repair company is going to do a lot more than just try to clean up some negatives on your credit. They will help with settlements and pay-for-deletions, and  they will make sure dispute comments are removed. A good company is  going to educate and guide you as well, so you are less likely to repeat the mistakes that resulted in your need for repair to begin with.  Remember, we learn from history. If we forget our history, we are doomed to repeat it.

If you or anyone you know is facing credit challenges and would like so help, Heartland Credit Restoration is a great place to start. Call or email me for a free consultation. The same goes for those of you who have clients with credit challenges. Forward their contact info to me and I will be happy to give them a free consultation and see what we can do to get them back to you with loan ready credit.

Please share this with your friends and contacts on social media. I also welcome comments and encourage you to feel free to let me know if you have any questions. In the mean time, I hope you have a wonderfully blessed day!

Obi Wan’s Lost Planet

 

“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 I would have to make sure fewer of those opportunities failed to close.
I would rather not spend more money, if given the choice, to try to get more loans to close. So, if I were to use that as my primary limiter, I would be able to narrow down my options to consider.
One obvious thing to consider is if I am providing a great service, such that people want to come to me for their loan. Or, are my clients acting as advocates for me? Am I getting their repeat business and referrals from them? If not, I will want to see hat I can do to change that.

But, if I’m doing those things well, what can I do with the supply I have, to improve my closings?

This will sound funny, but the question reminds me of a scene in Star Wars Attack if the Clones, when Yoda asked a group of Jedi younglings what the answer is if there is evidence of gravity on the star map but the star and it’s planets are missing. One of the younglings states the obvious and says that someone erased it from the archive memory.
So the answer to my question about improving my numbers is obvious too. I need to make more of the opportunities, that come my way, turn into successful closings. I need to look at the clients that came to me that I turned away for credit issues.
I may or may not have time to help them correct heir situation, but I can get them to someone who can. If I can help 2 clients like that per month, I move from the bottom third to the top. Even better, I can do it at no cost of time or money for me, and my clients will appreciate it.

Yoda - there is no try.jpg

This would be a great time to call a reputable credit repair company, that is well known for bringing clients back to those that referred them, loan ready, like Heartland Credit Restoration.

If you are one of those realtors or lenders that could use a few more deals closing each month, give me a call so we can see if Heartland Credit Restoration can help your clients get back to you for a loan or sale/purchase of a home.

Feel free share this socially and to let me know if you have questions or comments. If you have any topics you would like me to touch on, please let me know and I hope you have a wonderfully blessed day!

Threats Are Not OK

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“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!
The first thing I encourage all people to remember when dealing with collection agents, is that it is illegal to threaten clients. It is part of the set of laws that have been established to protect consumers from such abusive collection tactics. It is a good idea to be aware of your rights so that you can avoid the tremendous and unnecessary additional stress related to addressing collections. You can find information about the Fair Debt Collection Practices Act here.

Feel free to share this socially to let me know if you have questions or comments. If you have any topics you would like me to address, feel free to let me know and I hope you have a wonderfully blessed day!

I Always Pay My Bills!

 

“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 them.
The credit card collections were for charges that she didn’t feel she should have to pay. The same was true for the repossession of an automobile. ( That in itself is sufficient for a future story).
23 collections and charge-offs,
that is the number of of accounts reporting with balances on her credit. She could give me a background on each and every one.
She still insisted she always pays her bills. No matter, she needed credit help and I was willing to help her, provided she was willing to commit to working with me and making some changes.
She got qualified for a mortgage and is thrilled to have her new home.
Think you pay your bills?
This is a somewhat fantastic story. I get asked all the time how someone can think they “always” pay their bills, when they can list in detail 23 accounts that are not paid and have gone to collection. The answer is that I don’t know. What I do know here is that people have a unique way of seeing things. I also know that if we had not taken the time to help her see what needed to change and guide her in a plan to accomplish that goal, she would not now be a happy home owner. Just some food for thought.

Feel free to share this on your social networks and to let me know if you have questions or comments and I hope you have a wonderfully blessed day!

There Is No Such Thing As Not Very Late

“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 31 days late. He had gotten really busy with some other activities in his life. Who of us has never experienced a lapse of memory during hectic time? It wasn’t that big a deal was it?

“Crash!” go the blocks as they scatter across the table.

Not that late, is like not that pregnant, if you will pardon my change in analogy from the Jenga game. In credit you don’t want to allow your self the luxury of thinking that a little late is acceptable. That is a dangerous an slippery slope, because it is just a matter of time before you hit day 31.

Once you hit day 31, you will get reported late on your credit. Sure, the company may forgive the late fees, but you can pretty much count on the late history being reported.

In this case, the lapse in memory just cost my client nearly 100 points on his credit and a year before he could get a mortgage, the time being due to a lender requirement to have 12 months clean payment history, but that is for another writing.

Suffice to say, he now clearly understands that, in credit, there is no such thing as not very late.

 

Feel free to let me know if you have questions or comments and I hope you have a wonderfully blessed day!

But I Gave The Car Back Voluntarily

“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.”                            images.jpeg

 

“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 I give it to you voluntarily. Does that change anything?”

 

“No.” She said.

 

“Now lets say you have it sitting on your garage and someone sees it and offers to buy it from you cheap. If you sell it, for say $100, would you call it even and I would not owe you any more money?” I asked.

 

“Not a chance!” she demanded. “You borrowed $1000, you still owe me $900!”

 

“Exactly,” I replied “that is why the bank says you still owe them. They sold the car at auction and got some back, added the fees they had to pay on top and now, even though you don’t have the car, you still owe them the money.”

 

I went on to tell her that the remaining balance is not the only thing to consider either. A repossession, voluntary or not, is a huge negative on your credit. It will commonly get in the way of you getting a mortgage for 2-3 years, as well as drop your score as much as 100 points.

 

If there is any way of avoiding a repossession (short of breaking the law), you want to try it.

Feel free to let me know if you have questions or comments and I hope you have a wonderfully blessed day!

 

 

Divorce Decree and Your Credit – He Held Me Hostage!

“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 credit had suddenly dropped and she needed help understanding why, and she she needed help fixing it and fast.

It didn’t take long to figure out what happened. Her Ex was supposed to pay of the credit cards and take her name off the accounts. He had paid them off but never took her name off them. Now, he had run up the balances to max and stopped paying on them. They were now 60 days past due.

At first she didn’t understand what that had to do with her. Then I explained to her that she was jointly on the cards and the high balances and new late history was crushing her credit and the only way to stop it would be to pay off the cards ASAP!

A divorce decree does not rule over your credit.

This story highlights an all too common problem that can arise after a divorce. A divorce decree that says your Ex is responsible for something, does not remove you from the original obligation. If you do not make sure the decree stipulations are completed before it is final, your credit could end up being held hostage.

 

Feel free to let me know if you have questions our comments and I hope you have a wonderfully blessed day!