I had the chance to interview Hudson Henley with Henley and Henley PC. He answers a lot of questions pertaining to loan modifications, debt settlement, judgments, etc. He explains in detail what to do if you’ve been served with papers due to bad debts.
He also lets us know about the title industry and what to look for. If you want more information on how to get rid of nasty judgments, click here and enter your information. You can also call me directly in the office at 877.337.2673.
Ok…So I’m forced to write this based on a personal experience I had this morning. I received a call from a guy today that really angered me. Let me first that say that I rarely get angry. So I got angry and frankly the guy I was speaking to was surprised at my reaction. My anger #1 was based on disappointment at my other competitors and #2 the audacity they have in trying to charge outrageous fees to consumers for credit restoration or better known as credit repair.
This guy was quoted $1500.00 plus $89.00 a month for 6 months to simply dispute 9 line items on his credit report! THAT’S FREAKING RIDICULOUS! The really stupid part of this whole thing is that this guy had spent $900.00 two years ago and completely got scammed by another credit repair company.
Let me just say to anybody reading this post; If you need your credit fixed, call me directly and mention this post. I will make sure that your credit is handled in a ethical way at a great price. Example: The man above signed up for $400.00 retainer plus $57.00 a month for 6 months.
I also refer people to another affordable credit repair company called Build My Scores. Don’t pay high fees for credit restoration!
This is a really cool and inexpensive way to restore your credit if you are on a budget. It’s a direct competitor of mine but I know the owner so it’s cool.
Credit repair is 100% completely legal if done the correct way. Consumers have the right to dispute incorrect and erroneous line items on their credit reports. It is also legal to hire a credit repair organization to dispute the accounts for, or on behalf of, the consumer, as long as the disputing and tactics follow the guidelines and laws declared in the Credit Repair Organizations Act. Other different laws such as the Fair Debt Collection Practices Act, the Fair Credit Billing Act, and the Truth in Lending Act also allow all consumers to dispute inaccurate information on their credit reports.
If you are planning on hiring a company, make sure the company is reputable, bonded, and licensed with the Secretary of State. You should typically be able to find this information on the company’s website. Never deal with any credit doctor agencies that recommend you obtain a new social security number, attempt to create a consumer credit profile under a EIN, or create fake credit profiles by intentionally reporting false data. This is considered highly illegal and/or unethical. If one is caught doing this, it can result in significant personal liability. Do your research on the company, and make wise decisions regarding your credit. If you elevate your credit, you will elevate your life!
Your payment history is a detailed track record of your credit and every loan or line of credit you have obtained. This has the greatest effect on your FICO score, at a whopping 35%.
Three different factors are considered when reviewing payment history. First, severity is looked at. This is basically asking “How bad are the delinquiencies?” Next, recency is an issue. Depending on how long ago the consumer defaulted or paid late on an account will determine how many points the score is docked. Lastly, the frequency of the delinquencies is very important. Paying late on a line of credit over and over will absolutely crush your credit scores.
Amounts Owed
Be careful here… your balance to credit limit ratio is a HUGE factor in determining your credit score, 30% to be exact! If you have 3 credit cards that are all maxed out, your credit score is going to affected GREATLY. I will let you in on a little trick though. If you pay your accounts down to roughly 30%, you have hit the sweet spot. It shows use of your cards, but also keeps the balances at a percentage under 50% and helps your credit scores build each month, keeping your history stable.
Length of Credit History
Starting with this category, we bring down the weight percentage a little bit, but still a substantial amount at 15% of your score. As I said under “Amounts Owed”, your length of credit history DOES hurt you at first, but as the life of the loan or line of credit extends, it begins to help and build your scores. If you have a derogatory account (let’s go with a collection), then it is going to substantially weaken your score for up to 24 months. After the 24 month mark, the detriment to your scores is less, but still has an effect.
New Credit
Let’s say you go get an auto loan. You have just put a substantially large amount of debt onto your reports, showing as basically maxed out. This is going to hurt you for the first six months of the life of the loan, but after that, going forward, it will actually help you out, help build your scores, and show more good credit history and good standing, current, open accounts. Also, if you apply for any type of credit, there will be an inquiry for each one on your reports. An excessive number of inquiries labels you as a risk factor, and will typically be denied the credit. The weight of this factor is 10%.
Types of Credit Used
I have previously talked about having at least three revolving lines of credit and two installment loans. You want to mix up your accounts with credit cards, retail cards, car loans, mortgage, and so forth. A variety is a good thing… a “healthy” mix! This is also 10% of your score makeup.
Keep up the great work on maintaining great credit, and this economic crunch won’t take such a harsh toll on you and your family!
A good analogy is a great way to put real life images and situations into something a little more complicated to understand or mentally grasp. It is clarity for the ones whose forte may not be the topic of discussion. I titled this blog “The Credit Plant” to confuse you at first, because you are probably wondering what on Earth that is, but to clarify the topic by pointing out to you the following analogy (and no, it does not have to do with money growing on trees!).
We do credit restoration. We don’t do the typical “open-ended contract, $99 a month for the rest of your life, flood the bureaus with letters until they suffocate” credit restoration. We coach, teach, build relationships with our clients, and perform intense audits on the credit bureaus and creditors. If there is anything to know about credit, I will either know it off-hand, or I can find the correct answer VERY quickly. Here is one of the main coaching tips or points of view that we go over with all of our clients to really show them a good analogy in keeping their credit clean and beautiful. When I talk about “The Credit Plant”, it is a metaphor for how to grow your credit scores, credit history, and credit worthiness. So here we go…
Believe it or not, your credit IS like a plant. Let’s get visual here and go with a Tulip. You can pick whatever type of plant you wish for your credit, but I’m going with Tulips for the sake of a pretty mental image, because that’s what you want your credit to look like… pretty. So you have your plant, the Tulip, and you want to grow that plant to where everyone can see it for its beauty and purpose, or maybe you just want to add a little color to your front yard, who knows. However, you’re having a difficult time growing the tulip because of all the weeds growing around it, it’s dying of thirst, and it needs more sunlight. Well let’s begin pulling those weeds to clear out some room for your pretty Tulip. That is what we do as a company to start the credit restoration process. You have this potentially beautiful credit report, but a rough past has caused a multitude of derogatory and negative line items, the weeds, to spring up and damage your scores. We help you pull those weeds by auditing the creditors and credit bureaus. While we’re pulling those ugly weeds by the roots, we still have to give your Tulip some water and sunlight. It doesn’t matter if we help get every single negative line item off of your reports if we don’t shed some light on them to help grow that score. So how do we feed that flower water and give it some rays? We add positive trade lines. We can dispute to the bureaus and creditors all day, maybe resulting in 100% deletions of negative line items on your credit reports, but those credit scores are not going to bloom unless you add trade lines, the water and sunlight, to give your scores the most potential. Keep in mind that drowning a flower also kills it, so make sure you add a reasonable amount of credit cards and installment loans, and don’t get “application happy” while surfing the internet. As long as you have a healthy mix of credit, minimal negative line items, and the will to keep working to stay financially stable and credit worthy, then your Tulip is going to bloom with color, vibrancy, and maybe even a new boat!
This may come off as a silly analogy to many people, but it is the truth, and a great visual. There are different factors in having great credit. You have to push yourself to keep up with your payments on bills, open new trade lines if needed, and understand the concept of what I just went over. Let your Tulips bloom healthily and visually resonate all the way to your new home!
“No.” “ Sorry.” “Denied.” “ Can’t.” – These are all words that everyone hates to hear when applying for anything, especially credit. You want to hear the “yes”, and see the big red “Approved” stamp on your application. Just the sound of that stamp is so invigorating. But what if your credit is bad and hearing that booming approval hit the papers is so far out of sight you can’t even dream of it? What do you do then? Do you save up cash and use it as a lifeline during emergencies or “big buys”? Is all hope of hearing positive words towards your application lost? Or maybe you “don’t need credit” and you want to rent apartments for the rest of your life. Come on… GET REAL! The American dream is to have a family and own, and I repeat… OWN, your very own house! Don’t you want your children to have a backyard to play in? Wouldn’t you love it if your wife had her marble kitchen countertops, her gorgeous wood floors, and her 150 sq. ft. walk in closet, while you enjoyed your upstairs game room with your 60 inch plasma TV to watch hi-def football with “the boys” on game days? Of course you would… and this is how you can make that possible.
So you think it will take years upon years to get your credit score remotely close to where it needs to be? Not true, my friends…not true. There are certain steps you can take and strategic moves you can make to raise your credit scores. First, you need to humble yourself, admit you have credit challenges, and realize that you need healthy lines of credit in your life. Admitting to something and looking for help is always a good first step towards getting out of any negative moment in your life. Second, save up some money and set it aside until you are ready to make the most important step in raising your credit scores, hiring a credit restoration company to professionally do everything they can, legally, to bring your scores up to par. I will tell you upfront and straight forward… the best time is now, not later.
Of course, you can spend your money and time searching how to dispute to the bureaus and creditors yourself, but beware, the results could be insufficient, time consuming, and distant. For example, you can change your own oil, you can cook your own steaks, and you can represent yourself in a court of law; but there is no guarantee that, afterwards, your car is going to run correctly, your steaks are going to be tender and juicy, or that you are going to win the court case. You can dispute your negative line items on your credit reports yourself, but there is no guarantee that you will have used your time and money wisely. Hiring a credit restoration company, full time professionals, is the best route to take.
Many people say that credit repair is a “scam”, and “there is no such thing.” These are the “credit uneducated” people who accept defeat and don’t think outside the box. These are the ones who see the life preserver while they are drowning, but don’t grab a hold of it because they don’t like the color. These are the close-minded consumers who have never had to deal with bad credit, read a couple of articles written by others, just like them, and decided to sway toward the “popular vote” because it was published in a newspaper, and therefore it is correct. President Richard Nixon was impeached out of office for being a key member of The Watergate Scandal, a scam on America, but did the United States never elect a President ever again? Of course not. My point here is simply this: Just because there are scams and unethical companies and people in the world, does not mean at all that ethical, reputable companies do not exist. Do the research, weigh your options, and make a wise and educated decision with the company you choose to go with for credit restoration.
There is hope for the “less than perfect credit” consumers. There is a light at the end of the tunnel, and it is blinding. Do not let the public negativity, the pessimists, and the close-minded people influence your decisions in life and concerning your credit. Healthy credit is vital and very obtainable, so keep your chin up and your eyes open, and let the best credit restoration company show you how to go from “no to yes”, and introduce you to your new backyard, walk-in closet, and game room.
Improving your score isn’t a race; it’s a marathon. It takes time and endurance. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your score.
Payment History Tips
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.
Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
If you are having trouble making ends meet, contact your creditors. This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.
Amounts Owed Tips
Keep balances low on credit cards and other "revolving credit". High outstanding debt can affect a score. Score explanation
Pay off debt rather than moving it around.
The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
Don’t close unused credit cards as a short-term strategy to raise your score.
Don’t open a number of new credit cards that you don’t need just to increase your available credit. This approach could backfire and actually lower score.
Length of Credit History Tips
If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.
New Credit Tips
Do your rate shopping for a given loan within a focused period of time. Scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your score in the long term.
It’s OK to request and check your own credit report. This won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
Types of Credit Use Tips
Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix - it probably won’t raise your score.
Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
Closing an account doesn’t make it go away. A closed account will still show up on your credit report and even affect your score.
Identity Theft ranks as the number one complaint to the FTC year after year and accounted for 37% of all complaints in 2005. Identity Theft is a real problem in today’s society. Your good credit rating can be damaged when someone uses your personal information without your permission to open credit accounts. The purpose of this article is to outline some of the steps that you can take to have the bad credit that results from this activity removed from your credit report.
If you suspect that your identity has been stolen then you must immediately contact the CRA’s (Equifax, Experian, and TransUnion) to have a Fraud Alert added to your credit file. A Fraud Alert will help prevent the thief from opening any new accounts in your name. You must also contact the fraud department of any company that you know or suspect has had an account opened or tampered with and you must have those accounts closed immediately.
The next step involves filing an identity theft report. This is an important step. Under the "Police Report Initiative" credit bureaus will automatically block fraudulent accounts and bad debts from appearing on your credit report. You will need to file a report. Unfortunately, there is no federal law requiring a federal agency to take a report about identity theft. State laws vary and depending on your geographic location you may be told that identity theft is not a crime under state law. If this is the case then the FTC recommends that you request to file a "Miscellaneous Incidents" Report instead. Florida has an identity theft law, allowing the report to be filed in the location in which the offense occurred, or, the county in which you reside.
The FTC has an ID Theft Affidavit that is accepted by many companies (some creditors require a different or additional forms). The affidavit should be completed and notarized and contains a Fraudulent Account Statement that must be copied for as many accounts that will be disputed on the basis of identity theft.
The following excerpts are from the FTC’s website:
"Consumer reporting companies will block fraudulent information from appearing on your credit report if you take the following steps: Send them a copy of an identity theft report and a letter telling them what information is fraudulent."
"The consumer reporting company has four business days to block the fraudulent information after accepting your identity theft report."
"Information providers stop reporting fraudulent information to the consumer reporting companies once you send them an identity theft report and a letter explaining that the information that they’re reporting resulted from an identity theft"
