If you have bad credit, here are 3 simple choices for you to make about credit repair:

1. WAIT  7-10 years for items to come off your credit report

2. PAY  2x to 3x the normal interest rate on everyday things

3. ACT  Take matters into your own hands and repair your credit report !

That pretty much sums it up. There is simplicity in being brief!

Until Next Time,

Mark

Hello All,

Once again there is more news about banks failing and having to be taken over by the U.S. Government. However, if you listen to all of the talking heads on the news programs, the recession is officially over and the good ‘ole days are here again…Yeah right!

Who are they kidding? Foreclosures are still up, unemployment is up, banks and credit card issuers are jacking around with interest rates and creative fees, and with the new health care bill about to be rammed down our throats, we are in for a major financial shakedown!

For those of you with bad credit the near future is going to be rough! I found an interesting article today that I think you should all read:

Click Here for the full article.

Your Credit Insider,

Mark

     One of my reader’s recently sent in a question about wanting to know the difference between the Fair Issac Corporation’s FICO Score and the Vantage Score from Trans Union and Experian.

I have covered this in previous articles and posts before, but I found a terrific explaination from a great credit blog we have just started to follow.

Click Here  to get the full scoop.

Coming up, a new technique to stop Debt Collectors and Attorney Debt Collectors dead in their tracks!

   With the American worker losing jobs at an alarming rate, after foreclosures, what do you think will be the next aftershock in this current financial crisis. If you said car loans, you would be on the right track. But there is a larger segment that is absolutely going to rock the instability of the credit markets.

   Credit Lines, Credit Cards, and other forms of unsecured debt are about to experience massive write-offs!

   With so many workers losing their main source of income – their jobs, our economy’s main source of revenue (consumer spending) is going to severely dry up! Why? Because credit lines are being reduced and many customers are simply not able to or willing to pay on their unsecured credit accounts.

$2 Trillion In Credit Lines On The Chopping Block

   More than $2 trillion in consumer credit could be cut in the next 18 months, as credit-card companies pull back credit lines in anticipation of credit funding problems and regulatory changes. With the mortgage market contracting, the only other access to liquidity other than jobs is credit lines. With that access now severely limited, the credit crisis is only going to worsen!

  Although some experts note that consumers reduce their spending during recessionary periods — and, needless to say, after they lose their jobs — it’s important to not confuse spending and credit. During dire times, many consumers can boost their use of credit even as they cut overall spending, using the credit cards, home-equity lines and other forms of borrowing as a lifeline to tide them over. For those consumers, a credit line cut can be disastrous personally, and can aggregate into an even-steeper downturn in spending.

   Roughly 70% of U.S. households have access to credit cards, and 90% of those people use those credit cards as a cash-flow management vehicle, or revolve payments at least once a year. 

   A surprisingly small number of national companies dominate the major lending arteries – including credit lines, mortgages and credit cards – that have sustained the U.S. consumer for so long, including mortgages and credit cards. Mortgages have already hit a wall with the collapse of the U.S. housing market and wave of subprime defaults. But credit cards could be next as companies raise interest rates, tighten lending standards, cut credit lines, and even close millions of accounts in an effort to insulate themselves from consumer defaults.

   Bank of America Corp. (BAC), Citigroup Inc. (C), and JPMorgan Chase & Co. (JPM) – which controlled more than half of U.S. credit-card lines at the end of the third quarter – have all discussed reducing their credit-card exposure or scaling back growth.

   Lenders, still reeling from losses tied to subprime mortgages, can’t afford another round of defaults on credit cards. So they’ve begun pulling lines of credit, leaving the consumer out in the cold. And it’s only going to get worse. 

   As many of my followers have been hearing from me for months now, keep your credit card balances low and don’t be surprised if you get notice that your credit limits have been reduced.

Hello Again,

   While I like to mention that great credit scores will help you with lower loan rates, higher limit credit cards, and business lines of credit, I don’t want to forget to share with you some lesser known benefits of having GREAT credit scores.

> Note: What if everything you ever thought you knew about credit repair, credit scores, and how to fix your bad credit was just plain wrong? Would you keep doing the same things and getting the same results? Or would you try something new and radically different? To end the nightmare of bad credit and start living life to its fullest, go to www.CrushingTheCreditBureaus.com before this site is removed.

   It is common knowledge that bad credit means higher interest rates. If you have had a history of being late on your monthly bills, are running a large balance on your credit cards, or maybe even have filed for bankruptcy, your credit score has suffered. When you apply for a new car loan or need to update your mortgage, your lender looks at your credit report, sees the low FICO score, and socks it to you.

   They feel you are a credit risk, so they charge you a higher interest rate (sometimes a much higher rate). And each percentage point increase in your interest rate equates into bigger monthly bills for you. Fix your bad credit, and in time, the interest rates will fall. But you knew that.

   This blog will share some unadvertised benefits of credit repair that you might not have known.

Unadvertised benefit #1: Lower insurance premiums.

   The insurance companies have convinced themselves that a higher credit rating means people will be less likely to file claims on their insurance policies. So people with good credit are paying less in insurance premiums than you are, year after year. This is true for everything from auto insurance and health insurance, to homeowner’s insurance.

Unadvertised benefit #2: A better job.

   More and more employers are doing credit checks on job applicants before hiring them. While the employers may get your credit report to verify information that you put on your job application, what is to stop them from seeing how you handle your financial affairs, too?

   Those with good credit reports will avoid potentially embarrassing explanations at the job interview. It would be a shame to lose out on a good-paying job just because you were late on some credit card payments.

Unadvertised benefit #3: Lower deposits.

   If you are renting an apartment you can bet your landlord will check your credit rating. Those with good credit may well pay a lower security deposit. It can be assumed that this applies to a variety of other service providers too. Did you have to put down a deposit with the electric utility or phone company before they would hook up service?

Unadvertised benefit #4: Lower fees.

   Some people call them “nuisance fees” but they can really add up. Are you paying a monthly fee for your checking account? How about a high “processing fee” when you apply for a credit card? Families with a high credit rating will get free checking. They seldom pay “application fees” when opening a new credit account.

   And they are much more likely to be able to talk their lenders out of late-pay fees than you. These extra fees are just another way that lenders hedge their bets with dealing with folks with a poor credit rating. How can you reap the benefits of good credit? Make a plan to reduce your overall debt, and be sure to pay your all your monthly bills on time. Of course, that’s just a start.

   There are many more techniques you can employ to fix your problem credit. But in the end you’ll find your money goes much further when you have a good credit rating.

Let’s Talk Soon, Your Credit Score Insider,

Mark J. Garcia

Follow Me On Twitter – twitter.com/ChefMarkGarcia

P.S. If you haven’t downloaded your copy of my online eBook “Crushing The Credit Bureaus”, then you need to do that immediately. You can download it to your computer and be reading it within a few minutes. It’s here: www.CrushingTheCreditBureaus/eBook 

   With the latest move by the Fed, I have received many questions about what will it mean, and by when for all of us in the real world. The Federal Reserve has cut interest rates by 50 basis points. I will give you my 2 cents on what exactly you can expect and what you need to be doing about it for your finances.

Action: Home Equity Loans

How Soon Will You Be Affected? 1 or 2 Billing Cycles

   The latest rate cut will eventually mean lower borrowing costs for those of you who have a Home Equity Line Of Credit (HELOC). Most of these loans are indexed to the prime lending rate. This rate moves in tandem with the Federal Funds Rate.

    Rates on new home equity loans are a bit trickier to predict where things are headed. These loans don’t follow the Federal Funds Rate. Also, these loans tend to have fixed interest rates.

Action: Mortgages

How Soon Will You Be Affected? Impossible To Know

   The recent rate cut will have an unpredictable effect on mortgage rates. The banks and lending institutions are still “freaking out” and are processing VERY few new loans. At this time it is impossible to tell when – or even if – rates will come down. I suspect they will due to the simple fact that we have to get the flow of credit running again and start to stabilize the housing market.

Action: Car Loans:

How Soon Will You Be Affected? Be Afraid, Be VERY Afraid!

   The rate cut will probably not factor into any kinds of savings for car buyers. As many readers of my Crushing The Credit Bureaus         e-book will remember, my ex-father-in-law used to own a Ford Dealership. He tells me that we are at the beginning of seeing a meltdown in the car business like we have seen in the residential housing market.

   He mentioned that his colleagues are telling him that to get someone approved for a car loan, many of the major auto finance companies are requiring  a FICO Credit Score of 720! That is huge. Less than 15% – 25% of the population have credit scores that high. 

   If the already troubled auto industry can’t sell their vehicles and inventory start to pile up, how long do you think it will be before some of those corporate giants will need a government bailout? YIKES

Action Credit Cards:

How Soon Will You Be Affected? 1-3 Billing Cycles

   This gets a bit tricky…since rates will be lowered that doesn’t mean they will necessarily give you a rate cut. Far from it – many credit card companies are actually raising the interest rate on many of their customers.

   Floor rates could prevent some variable-rate cardholders’ APRs from falling, as could lower credit scores. Certain behaviors can trigger a rate increase or lower credit limit, such as paying late, habitually paying the minimum balance or charging close to the card limit. 

   Regardless of what happens, pay attention to your statements and any notices of a change in terms that arrive in the mail. Make sure your issuer hasn’t made an unfavorable adjustment to your APR or credit limit. 

   The latest reports indicate that there is almost triple the default rate on credit card accounts over one year ago. Think about that for a moment – all of those credit card companies and credit issuers will have losses in the billions!

I can’t stress enough though about making sure that your credit scores are healthy and the highest they can possibly be.

The near term is a bit scary with regards to all of this credit mess. You can find more credit repair tips by visiting www.CrushingTheCreditBureaus.com.

Stay Tuned

Mark

   With all of the chaos that is happening in our economy and with our lending institutions, I thought I would share some wisdom that I have learned on my 7 year journey of credit repair.

   For the foreseeable future, having excellent credit and high FICO credit scores is quickly becoming crucial to your financial life.  The mortgage meltdown and the credit crunch have resulted in lenders being much more cautious than they ever were about extending credit and making loans, particularly to borrowers with a less-than-excellent credit rating.

   Improving your bad credit not only means raising your credit scores, but also conditioning your credit reports so that you score as high as you can within the FICO Scoring Algorithm. I cover this topic in much greater detail in my book Crushing The Credit Bureaus, but I wanted to share with you 7 principles that you can use to improve your credit scores at little or no cost.

Principle #1:  Purchase A Copy Of All Of Your Credit Reports.  You can’t fix what you don’t know.  Find out what your potential creditors already know about your credit history by requesting a copy of your reports from the three major credit bureaus.  There is also a fourth credit bureau that almost no one ever talks about, yet more and more lenders are using this “Secret Credit Bureau”  all the time. Find out about it on page 22 of my book.  I recommend to all of my students and clients to purchase their credit reports online from the Fair Isaac Corporation’s website directly.  

I recommend a certain section of their website only because you get the exact reasons why your credit score is what it is. That web address is www.myfico.com/12. That is not an affiliate link or anything, it is just a little known insider tip that you have learned by subscribing and reading my blog. When you go there, you will receive in order the reasons (good or bad) of why your score is what it is. This will help you create your game plan for increasing your scores. Yes, there is a cost for these, but you are seeing exactly what lenders see when making a decision on whether or not to lend to you and at what rate based upon your scores.

 
Principle #2:  Review, Update, and Remove.  Carefully read your credit reports, keeping an eye out for any outdated, not reported, erroneous, or inaccurate information.  It is your right to get any incorrect data removed from your credit reports.  You can also request that negative information be deleted, but you will have to substantiate your claims.

 
Principle #3:  Keep Your Credit Card Balance Low.  High outstanding debt will negatively impact your credit scores.  Utilizing your full credit limit is dangerous, and quite frankly DUMB! I don’t mean to sound harsh, but if you really took a look at what that money is costing you in interest alone, you would never use a credit card again. I realize that in today’s society we absolutely need credit cards for some basic functions in the financial world, but please just view them for what they are…a convenience tool, not a habitual method of paying for things.

Going forward, lenders will now favor heavily those customers who carry a manageable amount of debt on their cards.  Here’s a  tip:  Don’t pay off your entire balance every month.  Believe it or not, that may hurt your credit score.  After all, lenders make their money by charging interest on the balance; if you’re not paying at least a little interest each month, you’re not profitable to the lender.  And more importantly you are not playing the “game” of credit.

 
Principle #4:  Increase Your Credit Limits Consistently.  Each of your lenders typically assign you a credit limit-an amount which you cannot exceed. Have you noticed though, that these same credit card companies will often let you exceed your credit limit, then charge you an “over limit” fee! Yikes…is it any wonder that the credit card companies make millions of extra dollars from us consumers from these fees alone?

If you add up all your lines of credit you have your “high credit limit.”  An equally important number is your debt-to-credit ratio.  Lenders would like you to carry a reasonable amount of debt for your high credit limit.  Unfortunately, many Americans have a debt-to-credit ratio that is way too high.  For example, if you have $10,000 in unsecured revolving accounts and you owe $8,500, your debt-to-credit ratio is 85%.  That is bad news for your credit score. Typically that will cost you anywhere from 30-85 points on your FICO Scores.

Principle #5:  Pay All Of Your Creditors That Report To The 3 Major Bureaus On Time, Every Time.

Notice I specifically mentioned the creditors that report to the bureaus. Listen, I am not trying to tell you how to manage your monthly budget, but I will suggest that you protect your credit rating at all costs. If you have to make the choice between paying a credit card account or your cable bill…pay the credit card first! You can always work out a payment plan with the cable company, but just one 30 day late pay can affect your credit scores 12-55 points! That’s no joke, and I have seen even bigger drops on credit scores from some of my students in the past.

Principle #6: Monitor Your Credit Scores Like A New Mother Monitors Her Newborn Baby.

I teach and preach to all of my students and clients that our credit scores are constantly moving and fluctuating with every passing credit transaction we complete. They are not static, when you charge on your credit card, that transaction is recalculated against your credit limit. When you make a payment that is late, your score is affected. When someone makes an inquiry, your score is affected. My point to all of this is to not simply pay attention to your scores for a short time until they improve and then forget to watch over them. For all of my fellow parents out there, this is the one area of your life where being an “overbearing, overprotective nag” is perfectly acceptable! 

Principle #7: Constantly Educate Yourself About The Credit Scoring Game

I truly appreciate and am humbled by the fact that you are a subscriber or a potential student of mine. I am trying to share with you my knowledge and experience of what I went through with my credit nightmare. I would welcome the chance to earn your business, but if we never do business together, please make sure that you are keeping yourself up to date and educated on the subject of credit, credit scores, and credit repair. Find yourself reputable sources of information and more importantly put that information into action to help you achieve the credit scores you desire.

 
Get access to insider tips, tactics, and techniques to increase your credit scores by clicking here: www.CrushingTheCreditBureaus.com

Your Credit Score Insider

Mark