Paul Yamilkoski

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A Road Map To Better Credit


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Avoiding A Trap In Credit Scores

“ 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 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 can be relatively meaningless for trying to qualify for a mortgage.

This happens because the scoring algorithms used for each purpose 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 etc that are not reported to the standard system. There are a few such scoring models being used right now in the mortgage environment.

The trap in credit scoring is the “consumer” scores, sometimes referred to as “Fako” scores (as in fake scores), that are offered to the public, are not useful for any of those purposes.

Unbeknownst to the common man or woman looking at these scores, you are paying for a score that compares you to other people, but can be and often is vastly different than the scores used to qualify you for a mortgage or auto loan, for example. It is not uncommon for these “consumer” scores to be as much as 100 points different than the FICO scores that their loan officer might pull for a mortgage.

Now you are probably asking your self why anyone would pay for those scores. I ask myself that same question all the time. The only time I have ever known anyone to be even a little bit interested in their credit scores, is in the context of lend being able to get a loan or credit card etc.

There are a few rare people that watch scores closely because scores affect insurance rates and so on, but most people are not nearly that attentive. Heck, I’m a credit expert and help people with their credit for a living, and I don’t focus on my own credit that intently. I take care of following a basic plan and, other than a periodic check to make sure nothing has gone wrong, my credit is pretty much on auto pilot.

So why do those other scores exist, if they can’t be used for any real purpose such as lending? And why do people pay for something that has so little relevance and hence lacks any real value?

Well, I can tell you why they exist. There is an obvious need for people to know their scores, so they can get qualified for a loan. The challenge is that the algorithm that is used for mortgages, FICO, is very closely guarded and expensive for companies to obtain and use. So, if you don’t want to pay for the real thing, you make up your own and sell it.

It is all about making a buck.

Consumers, however, rarely understand that the scores are not relevant when considering lending. You have to really look and pay attention on those various sites to get any idea that they are not going to be helpful for lending.

I have worked with thousands of clients, and a high percentage of them were confused and frustrated by consumer scores, when they went to their loan officer to get a mortgage.

I have not taken the time to  evaluate all the services out there, and do not plan to do so. But I can tell you a few that we encounter on a regular basis that do not give you FICO scores for your money.

Credit Karma is one we hear of often. I have not had a single client that used that service that received FICO scores. If you use them to monitor your credit, and are focussing on your scores, check to see what scores they provide and remember that the scores may be light years from where your FICO score your lender will pull are.

Another example lies with the credit bureaus. Most people would think that getting their credit scores directly from each bureau would be accurate for lending. But most of the time, the scores being offered by them are not FICO scores. What is interesting, is that you can get FICO scores from them in some cases. You just have to dig for the right product. I know that Experian offers one particular product called Credit Check Total that provides FICO scores.

What I hope to make clear here, is that all scores are not the same, even when being pulled for legitimate lending purposes. Don’t be surprised if the scores you got when buying a car are different from the ones pulled for a mortgage. More importantly, I want you to remember that the majority of scores you will get from monitoring services will not be worth anything, if you are looking because you are planning to get lending. Don’t waste your money.

I hope you found this helpful and I welcome comments and questions. Please also share the information with your friends and contacts. Odds are they will learn something and be thankful for it.

If you are facing credit challenges, or you have a client that you are going to have to turn away due to credit challenges, then I encourage you to give me a call. A reputable company like Heartland Credit Restoration can help you turn things around and get that credit loan ready.

There isn’t a better company you can go to for help, and the consultation is always free.

I will look forward to talking to you and until then I hope you have a wonderfully blessed day!

Getting Threatened? Threats Are Not Okay!

“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 dealing with collection agents, is that it is illegal to threaten anyone. They can not get you arrested. And, unless they have already taken you to court and gotten a court order, they are not going to seize your bank account or home. 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: https://www.ftc.gov/enforcement/ rules/rulemaking-regulatory-reform-proceedings/ fair-debt-collection-practices-act-text

In most cases, there is more to the situation than just abusive tactics. Commonly there are other issues as well on the credit report that need addressed.

If you have found yourself in a situation where you are getting those nasty calls, or just are at a point where you are realizing your credit is in rough shape and need help, a reputable credit restoration company like Heartland Credit Restoration is a great place to start. They are professionals that will treat you with understanding and compassion and help you get things turned around and eliminate those nasty calls. In fact, in just a matter of months you could be loan worthy again.

 Call me for a free consultation to see how we might be able to help. 319-533-5236.

If you are a lender or realtor that has a client you might have to turn away due to credit problems, then let me see if Heartland Credit Restoration can help change that client into a approved client with loan ready credit.

You should never have to say “NO” to a client. We can help change those into a “YES”.

Call me for a free consultation. 319-533-5236.

Don’t forget to let me know what you think. I always welcome comments. And please do me a favor and share this with your contacts on social media.

I’m looking forward to helping you.

Until then, I hope you have a wonderfully blessed day!

Aim Small, Miss Small – Your Results Depend Upon It

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 worked up about being a little shaky, but instead focus on my trigger pull and aim.

The trigger pull matters because if I pulled the trigger anything but straight back, I would be either pulling the muzzle or end of the weapon to one side or pushing it toward the other, the result being a barrel that is not 90 degrees to the target but at an angle. When the barrel is at an angle to the target, the error gets magnified by the distance to the target, and it is easy to miss the target completely.

This brings me to the aim small miss small concept. If you have ever watched kids shooting bow and arrow, you probably have noticed that they can end up with arrows all over the place. They don’t really know how to aim the bow to get the arrow exactly where they want it, so just point it in the direction of the target, with the goal being to just hit the target and with the little fantasy to maybe hit close to the bulls eye. As a result, many arrows miss the target completely.

Watch those same kids shoot after being shown how to aim the arrow so it goes where they want it to go, and you will see much better groupings of arrows, meaning consistent performance, and almost all arrows at least in the target.

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So why does this matter to you?

Well, outside of participating in some type of shooting sport, it can apply to the instructions you give your team or clients. If you don’t give them a goal that is exactly what you want to achieve, the you will likely see results similar to the kids shooting in the general direction of the target and not only missing the bulls eye, so to speak, but often missing the target completely, a total fail.

I’ll give you an example. Most lenders and realtors, and many others for that matter, understand that balance to limit ratios on credit cards affect credit scores. Many will tell a client to keep their balances under 50% to help their credit.

Now, when a balance to limit ratio hits 50% it starts to hurt your credit scores. The higher the ratio goes, the more it hurts your scores, so it makes sense to not want balances to be in that area.

If they hit the target you gave them, great, they are not being hurt. But they are not being helped either. And what happens if the client is off the mark even a little bit? They are in the range doing damage to scores. We effectively told the client to shoot in the general direction of the target, trying to avoid the miss but did not tell them where to actually aim.

If you want the client to get the best benefit, you tell them to aim for a 4% balance to limit ratio. That will give them the best score. If they hit it fantastic. If they miss what they are aiming for, say by 20%, they are still well within the good range. If they miss by 40% they are at least avoiding any damage.

You see the difference? Aim small, miss small. This can apply to all kinds of situations, but I help people fix their credit, so think of things in that context.

How about telling people to pay their credit cards off at the end of the month? Do you think you are helping them? What if they pay their bill on the 30th and the cards reported on the 25th? Their ratios look terrible and their scores get creamed.

What if you then told them to pay the cards by the 25th? Fail. If they pay on the 25th, the payment won’t clear before they report the balances and your client is in the same boat as paying at the end of the month.

Now, tell them to call their card companies to find out when they report to the bureaus and then schedule their payments to clear the account 2-3 business days prior to reporting date, and you have a recipe for success. Aim small, miss small.

There are a multitude of things like this that can affect a person’s credit. The cool thing is that you don’t really have to worry about most of it yourself. Let a reputable credit restoration partner like Heartland Credit Restoration do it for you. Then you can focus on what you do best.

If you, or someone you know,  has run into credit problems and could use a little credit help, a reputable credit restoration company like Heartland Credit Restoration is a great place to start. You will reach your credit goals much faster and safer with the help of a professional, and you will have loan ready credit when you are done.

Call me for a free consultation to see how we might be able to help. 319-533-5236.

If you are a lender or realtor that has a client you might have to turn away due to credit problems, then let me see if Heartland Credit Restoration can help change that client into a approved client with loan ready credit.

You should never have to say “NO” to a client. We can help change those into a “YES”.

Call me for a free consultation. 319-533-5236.

Don’t forget to let me know what you think. I always welcome comments. And please do me a favor and share this with your contacts on social media.

I’m looking forward to helping you.

Until then, I hope you have a wonderfully blessed day!

Stop – Don’t Just Pay Collections!

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 heals and hurts less.

So, when an account becomes a collection, that account is hurting the most it ever will from that time on. Going forward the injury is supposed to heal, just like our body would.

Now lets say you tear the scab off that wound. You are right back where you started and it has to heal again. That is what most commonly happens when people pay on or pay off a collection. The scab gets pulled off and the injury is affecting your credit as if it just happened again.

That is not supposed to happen. In fact it is illegal. But it happens ridiculously often and little is done to enforce proper reporting.

The fact is, technically speaking, a collection can not actually have the scab removed. The date of last activity for a collection is the date it first went delinquent and never went back to good standing. Once that clock started and it became a collection, there was no going back, ever, no matter how many times you talk about the debt with the company, no matter how many payment arrangements you have made for that account, and no matter how many times the debt was sold.

A great analogy is an automobile. Once that 2003 Chrysler Town and Country went into production and became a 2003 Chrysler Town and Country, it was always a 2003 Chrysler Town and Country, no matter how many times it was repaired, crashed, modified, maintained, or sold.

Like I sad before, it is illegal to effectively “tear of the scab” of a collection, but it happens and it hurts.

So, if you are telling people to go out an pay collections to help their scores, or you hear people talking about paying collections to help their credit scores, stop them. Have them get help with making sure things get done right. In fact a reputable credit restoration company, such as Heartland Credit Restoration, will do even better than that, and in many cases can potentially help you get the account completely removed from your credit as part of the deal in settling it.

Don’t suffer for trying to do the right thing. Get some help.

If you, or someone you know,  has run into credit problems and could use a little credit help, a reputable credit restoration company like Heartland Credit Restoration is a great place to start. You will reach your credit goals much faster and safer with the help of a professional, and you will have loan ready credit.

Call me for a free consultation to see how we might be able to help. 319-533-5236.

If you are a lender or realtor that has a client you might have to turn away due to credit problems, then let me see if Heartland Credit Restoration can help change that client into a approved client with loan ready credit.

You should never have to say “NO” to a client. We can help change those into a “YES”.

Call me for a free consultation. 319-533-5236.

Don’t forget to let me know what you think. I always welcome comments. And please do me a favor and share this with your contacts on social media.

I’m looking forward to helping you.

Until then, I hope you have a wonderfully blessed day!

The Absolute Best Tool To Build Your Credit Scores

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 to affect your credit score positively than any other single thing on your credit.

I can hear some of you sighing now as you lament over how credit cards got you into credit trouble and are the scourge of your credit report and scores.

I can understand that. Any tool that has tremendous capability to do good will also have tremendous capability to do damage. The only thing that determines the positive or negative result is how the tool is used. And that is up to you.

I want you to be able to get the best possible results, so I am going to tell you exactly how to use a credit card as the amazing tool to drive your credit scores up.

Here is what you need to do, in three simple steps:       images (3)

1.)  Get at least one credit card, if you don’t already have one. Ideally, if possible, get two cards.  You don’t need more.

Any card will do, as long as it is an actual credit card. Debit cards and preloaded cards that have the VISA or MasterCard symbol on them do not count. It has to be an actual credit line you have been extended. A secured card can work great if needed.

Get the absolute smallest credit line you possibly can. Don’t worry about the interest rate, but avoid annual fees, if at all possible. Interest rates only matter for those who carry over balances. That is not you.

If you already have two or more credit cards, then don’t get more. It won’t be helpful.

2.)   Now that you have a couple of cards, it is time to talk about the use of those cards.

I’m talking to those of you who just got new cards first. This includes those of you who got into trouble with credit cards in the past and are starting over.

For those of you who just got cards, DO NOT CARRY THEM IN YOUR WALLET. They are a tool to build your credit, remember? They are not supposed to be readily available for you to spend money.

The first thing to do is, and I realize this is a slight contradiction to my last instruction, take them with you the next time you go to the store for groceries. Use each card to buy a single small item, from your cart, of about $5 value. Pay for the rest with your regular form of payment.

You will now have a small $5 balance on each new card. Take the cards home and lock them up and don’t touch them. When the bill is due, pay it. Do not pay it early, but pay it in full. Paying early does not help your scores and paying the bill in full limits any additional costs. Repeat this exercise about every three to four months. Simply put a reminder on your calendar.

Another easy option is, if you have a very small reoccurring bill, to pay that bill automatically with the new card and then pay the card from your regular account. This option results in you never actually having to touch the card after locking it up. You just have to check the statement every month to make sure the payments went through properly.

For those of you who already have two or more cards, here is what you need to do.

If you use your cards very sparingly, mimic the cycle noted for beginners. This will have you getting ideal results with minimal effort and cost.

For those who use their cards heavily, call your card companies and find out when they report to the credit bureaus. Make note of those dates. Now plan on making your payments on those cards every month, at such a time so as they clear the account 2-3 business days prior to the reporting date. This will result in the credit bureaus only seeing your account with little or no balance and help your scores the most.

3.) NEVER, EVER, EVER, PAY YOUR BILL LATE

This might seem obvious, but you would be surprised at how many people rationalize late payments. I can’t even count the number of times I have heard the comment “ I wasn’t very late”. That my friends is like saying your not very pregnant. Late should never be seen as okay. Don’t give in the the slippery slope. Aim small, miss small, as the adage goes.

That’s it folks. It is as simple as that, simple but not always easy, especially for those you have multiple cards and use them heavily. For those individuals, I would encourage a new budget that gradually had you setting money aside for expenses, until you were able to pay cash for all those things you are charging to the cards. You still can use the cards, but now you have the ability to make the payments in a timely fashion, instead of waiting for the expense reimbursement to come in. If you are not using your cards heavily due to work related expenses that you get reimbursed for, that you just need to be patient enough to save the money before spending it.

Now I suspect some of you are wondering why it is such a big deal to have the balances paid down before they report.

Here is the short answer: High balances represent risky behavior and the higher you balances are, the more they hurt your credit. Low balances reflect more responsible behavior and help your credit scores grow. The lower the balances are, the more positively they affect your scores. The ideal balance to limit ratio appears from research to be at about 4%. That’s right, the best balance to have reporting to the credit bureaus, to most benefit your scores, is $4 on every $100 of credit limit.

I’ll give you a real life example. I had a client that we had cleaned up his credit report so that there was little or no negative remaining. His scores were in the 620 range. His credit cards all were at about 90% of limit. We had him pay them down the ideal range of about 4% and he saw a 120 point swing in his scores to a 740. That is why it matters.

If you, or someone you know,  has run into credit problems and could use a little credit help, a reputable credit restoration company like Heartland Credit Restoration is a great place to start. You will reach your credit goals much faster and safer with the help of a professional, and you will have loan ready credit.

Call me for a free consultation to see how we might be able to help. 319-533-5236.

If you are a lender or realtor that has a client you might have to turn away due to credit problems, then let me see if Heartland Credit Restoration can help change that client into a approved client with loan ready credit.

You should never have to say “NO” to a client. We can help change those into a “YES”.

Call me for a free consultation. 319-533-5236.

Don’t forget to let me know what you think. I always welcome comments. And please do me a favor and share this with your contacts on social media.

I’m looking forward to helping you.

Until then, I hope you have a wonderfully blessed day!

Which One Affects Your Credit Score More? $500 worth of collections? Or $10,000 worth of collections?

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?       canstock5722113.jpg

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 the $10,000 collection was from 14 months ago? Who would have the better credit scores?       images.jpeg

It may surprise you to know that the person with the $10,000 collection will have the better credit scores. Again, the balance does not affect the score. But, the age of a collection has a big affect on scores. The newer the collection is, the more it affects the score. A great way to look at this is to think that credit is like our body. When we get injured, we experience the most pain and debilitation when it happens. Then, as time goes by, the injury starts to heal and have less affect on our ability to function. Credit reacts much the same way. When an account first becomes a collection it hurts the most and then as time goes by, the affect decreases and the injury to your credit "heals". 

Let’s change it up even more. Using the original example, let’s say that I have ten collections, all from fourteen months ago, totaling $10,000, and the other person has only one collection from fourteen months ago totaling $500. Who has the higher credit score?

In this case the higher score belongs to the other person with one collection. This is because the number of negative accounts matters. I effectively have ten injuries to my credit and the other person only has one. 

But what if the other person, who only has one collection, got that collection last month and I got my ten collections 36 months ago? Who has the higher scores now?

Well now things are starting to get muddier. I have sustained ten injuries and the other person only one, but mine have been healing for three years and the other person’s just happened. It is likely that my scores are the better scores.

How about if I got my ten collections scattered over the last three years, with the most recent being five months ago? Would my scores still be the better ones?    images.jpeg

Probably not. You see, the scoring algorithm considers patterns of behavior in scoring. Think about it. We all know life happens to all of us. Even the most prepared person can suffer from an event they were not totally prepared for.  We would look at things like that as out of your control and generally not a reflection of any risky behavior or choices. On the other hand, if I made several poor choices or did nothing to prepare for possible circumstances, and had multiple failures, we would look at that very differently. We would see that as a result of risky behavior. In fact many of you might say failing to plan is planning to fail and I got what I deserved and I am a risk to lend to.

The scoring algorithm takes this into account. So the age of the account, the number of accounts and the frequency of occurrences all affect the score and all have to be weighed to determine our scores.

This is when it is common for people to bring up another common occurrence.        images.jpeg       What if, in the original example, The account says it is 14 months old, but it was really much older and had been sold to a different collection company and then another and another, to arrive at the most recent company fourteen months ago?

This is a little bit of an aside from the subject here, but it comes up almost every time I have this discussion, so I will touch on it briefly.

The age of an account is determined by when the original creditor last got a payment in good standing. Once the account went delinquent and was never brought current, the clock started ticking on the age of the account. It is a collection before a collection company ever gets it and no matter how many times it is sold, it is the same age.

I like to use a car analogy to easily illustrate this. If you buy a 2003 Chrysler Town and Country brand new off the lot and then trade it in to get a new car three years later, and it is then sold again and again, no matter how many times the vehicle was sold, it will always be a 2003 Chrysler Town and Country.

The same goes for collections. Although it is illegal for a collection company, or any company for that matter, to update the age of the collection (commonly known as the DLA or Date of Last Activity), it happens all the time and as a result can have a huge negative affect on your credit score.

That’s it for today. I hope you maybe learned something new from this and can see how quickly things can get complicated on your credit. 

I welcome your comments and ask that you share this information with all your contacts on social media. 

If you are finding you have some problems with your credit scores, a reputable credit restoration company like Heartland Credit Restoration is a great place to turn for help. We at Heartland Credit Restoration are all about helping people get positive control over their credit, and the more people that know this kind of information, the better.

If you are facing credit challenges, or you have a client that you are going to have to turn away due to credit challenges, then I encourage you to give me a call. We can look at how Heartland Credit Restoration might be able to help you turn things around and get that credit loan ready. There isn’t a better company you can go to for help.

 I will look forward to talking to you and I hope you have a wonderfully blessed day!

Can Credit Be Repaired?

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 consumers

One 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 modified

Slightly 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 include both consumers that got professional help with their credit and those that did it on their own.

Now, Heartland Credit Restoration has a combined professional experience of over 50 years in the industry.

So our numbers are even better, 

  TRU Results 1.jpg   TRU Results 2.jpg   TRU Results 3.jpg

as you can see from these reports that some of our clients received directly from the credit bureaus, after making changes to their credit reports. How you go about the process of addressing negative and inaccurate information on your credit report really does make a difference. Our experience really pays off for our clients.

Now, credit restoration is not a magic wand. Things do not just get removed from your report, especially if they are in fact accurate.

And it does not generally happen over night. I’m not saying that things never get corrected quickly. But  remember that we are dealing with large corporations where one hand commonly doesn’t know what the other is doing, where departments are significantly understaffed to handle the work load, and where there is little or no financial incentive to even worry about doing it right, and so it can be a challenge to get them on the same page.  

Credit restoration is a process that takes time. For many people that means six months or more.

Remember, you didn’t get into credit trouble over night. So the problem is not going away over night.

So, once a person has their credit " repaired ", what does their credit look like?

Well we could spend a lot of time on that one, but I won’t.

It really depends upon your goals.

Generally, as far as we at Heartland Credit Restoration are concerned, it means your credit is loan ready – your score is high enough and your credit report is clean enough to to meet the requirements of your lender to qualify you for a mortgage.

That is where we at Heartland Credit Restoration would say "repaired" credit starts.

Well, that’s today’s credit tidbit.

I welcome your comments and ask that you share this information with all your contacts on social media. We at Heartland Credit Restoration are all about helping people get positive control over their credit, and the more people that know this kind of information, the better.

If you are facing credit challenges, or you have a client that you are going to have to turn away due to credit challenges, then I encourage you to give me a call, and put the power of our experience to work for you. We can look at how Heartland Credit Restoration might be able to help you turn things around and get that credit loan ready. There isn’t a better company you can go to for help. 

I will look forward to talking to you and I hope you have a wonderfully blessed day!

What Is Your Problem?

“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.  

  
images.jpeg                   Credit Scores tell the world how responsible you are in life.

Like it or not, you are being judged by your behavior with your finances. And, that behavior is also used to judge you in every other facet of your life. 

Research has shown, time and again, that your behavior in your finances is a good indicator of your behavior in life. If you don’t take finances seriously, (otherwise known as irresponsible) you will likely not take safety, health and many other parts of your life seriously either (you are seen as irresponsible). 

So, if your credit scores are low, they tell a lender they better charge you a bunch if they are going to lend to you, because they are likely going to lose money with you in the long run. You are not responsible. Same goes for your health insurance, life insurance, mortgage, auto loan or other personal lending, credit cards, and of course auto insurance.

By the way. I’ve been in the irresponsible category in my past, as I’m sure most of us have been or are now. Don’t get offended by the label of “irresponsible”. Fix the problem and clean up the mess, before life gets road rage and decides to make an example of you and push you off the road for the betterment of society.

If you or anyone you know is facing credit challenges and would like some 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 are realtors or lenders and have clients with credit challenges. Tell them you know a company that is fantastic at helping people get their credit loan ready, so they can realize their dreams a new home. Ask them if they would offended if you forward their contact info to me. 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!

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!