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 

Glad you asked! 

I was attending Eben Pagan’s Guru Mastermind recently when talking with other real estate investors and the topic of conversation came up surrounding the current $700 Billion bail out plan that is being proposed right now.

I of course have VERY strong opinions on ultimately what lead to this meltdown, but I equally have thoughts on how to fix this situation.

What I’m about to say is all “chalk talk” because – when it comes to the bailout plan – “Bernanke, Paulson & Co.” has already made up its mind.

I believe Paulson actually missed a historic opportunity to remove the U.S. taxpayer from further financial troubles rather than lump more debt on them, just as I believe Fed Chairman Ben Bernanke missed opportunities earlier in the year to keep us taxpayers from once again footing the bill for a housing crisis! (Remember the S&L debacle a few years ago?)

By appointing the Federal Housing Finance Authority (FHFA) as a conservator, U.S. Treasury Secretary Paulson has essentially assigned the FHFA to be the legal guardian of mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE). And that’s good, since conservatorships are typically established when a company can’t take care of itself and is considered incapable of handling its own affairs.

In this instance, both Fannie and Freddie qualify as not only being incapable, but perhaps even criminal as well, after hemorrhaging capital over the past 12 months. And this situation was even more complicated than it initially appeared, since there were global implications. As make no mistake about it…there was pressure from foreign bondholders that finally forced the U.S. government’s hand.

Unfortunately, conservators can rarely do anything more than keep the lights on. As the term implies, they’re intended to “conserve” assets and property, until they can return the entity to solvency.

So, despite Paulson’s fancy plans and the $200 billion capital infusion he’s lined up, he may have handed hollow authority to an agency that cannot, for all intents and purposes, assign, strip, liquidate or materially alter how either Fannie or Freddie operates. Nor can conservators typically take possession of assets, which is a critically important distinction in this instance.

On the other hand, receivers are typically entrusted by the courts, or secured creditors, specifically to take possession of troubled assets and to dispose of them in a timely manner, and in such a way that they maximize returns to the secured creditors. And in the case of a public company, that duty theoretically extends to the company’s shareholders, as well.

In that sense, rather than placing an emphasis on continued operations as a conservatorship, a receivership emphasizes a return on capital and the cessation of operations.

In my opinion, that’s what’s really needed here.

It if was up to me, I would have assigned the FHFA (or brought in some true bailout specialists) to act more as receivers than as conservators. With that accomplished, I would have taken three key steps:

• First, instead of making a $200 billion down payment on the mother of all mortgages, I would have charged the receiver with immediately separating “good” debt from “bad” debt.
• Second, I would have ordered the receiver to weed out and repudiate flawed contracts.
• And, third, I would have searched for a way to sell Fannie and Freddie common and preferred shares in such a way that it would minimize taxpayer losses, rather than make them potentially unlimited as Paulson’s done.

Apparently, FHFA Director James B. Lockhart III does have the discretion to place Fannie and Freddie into receivership if he determines that’s the move that’s required, but the eventual dissolution could only take place by Congressional Act. That makes such an outcome highly unlikely, to say the least, given how much “pork barreling” has historically been linked to the two companies and to the financial industry in general. Despite the fact that liquidation – rather than keeping the lights on – is exactly what’s needed in my opinion.

I find it terribly sad that Paulson is going to throw $200 billion, or more, of taxpayer money into a black hole that’s already consumed billions. Especially when he’s publicly admitted that regulators don’t know enough about the complex financial derivatives and off-balance-sheet investment vehicles that have forced the bailouts of some of the world’s largest banks, forcing the U.S. Federal Reserve and U.S. Treasury Department to travel deep into uncharted waters.

It would seem that cutting our losses short is a far more productive option, especially when it minimizes potential taxpayer losses from the “unknown.”

It would also appear that Paulson has opted for the easy way out by socializing losses and allowing gains to remain private. Some will say that’s the way it’s always worked and that I’m naive for thinking that it could somehow be different this time. Perhaps that’s the case. But I also believe this country’s financial situation cannot be stabilized by stopgap measures and half-baked bailout plans.

Nor do I think that running up even more debt in the face of the unknown is the direction to travel. I need only point out that the initial Office of Management and Budget estimates for the Iraqi war were a mere $50 billion.

I believe that Paulson could have been a hero by engineering a true workout that maximizes any remaining shareholder value. Instead, he’s structured $200 billion, or more, in preferred stock, and warrants that may never be paid back and that are effectively worthless unless Fannie and Freddie return to profitability.

And with the broad-based bailout he proposed a week ago – and that Congress is now sculpting into another shape – he’s effectively added another $700 billion to the U.S. bailout tab. In short, we’re talking about a flawed “fix-it” plan that’s going to cost you and I nearly $1 trillion.

Adding insult to injury, the relatively few individuals who engineered this whole mess with implicit government support are apparently going to be allowed to ride into the sunset with their saddlebags packed full of taxpayer money. Or at least with the millions of dollars they reap from their “golden parachute” corporate-severance packages. Either way, they’re not going to suffer like the U.S. taxpayer will. And that suffering will last for a long, long time.

 

There are many strategies, tips, and techniques available on the Internet on how to repair your bad credit. Unfortunately most of them are old, outdated and ineffective!

 

Having great credit scores is THE most effective way to improve your finances and financial independence. When you build and maintain excellent credit, you control your future.

 

Discover how to repair bad credit and improve credit scores.

 

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