Score More Credit

How to Boost Your Credit Score Without Credit Repair

Removing negative items from your credit report is one technique for improving your credit score, but it's not the only technique in my tool box. I created this free video to teach you another little known insider strategy you can implement immediately to boost your score as much as 150 points in as little as 45 days.

I have used it on with many clients and have always seen fantastic results.

WARNING: Watch the entire video before taking any action. You need to understand how the strategy works before you can make a decision as to whether or not its right for you.

FICO Reveals 'Damage Points'

For the first time ever, FICO has revealed how much certain derogatory remarks can negatively effect your credit score. Conversely, we now have a more accurate idea of how much removing these items can positively effect your score.

As you can see from the chart, a maxed out credit card can effect your score as little as 10 points, while a recent bankruptcy can decrease your score by as much as 240 points.  Its also interesting to note that the better your FICO score is when the negative remark is added, the more of an effect that remark will have on your score. 

FICO determined how your score would be effected by using complex mathematical algorithms compiled by tracking hundreds of thousands of consumers over a period of years. Over time they were able to determine key indicators that revealed the increasing probability that a consumer would default 90 days or more on a loan or credit.

This chart helps to illustrate how a consumer who had an otherwise flawless credit history can suddenly become a high risk borrower after a recent negative event in their credit history, while those with lower scores are more likely to be habitually poor at budgeting or making timely payments. The sudden change in behavior is a warning sign and therefore caries a higher penalty.

How to Think About Money

This free report says it all.

Debt Settlement Vs Bankruptcy

Pay Off Your Debts for As Little As 50 Cents on the Dollar!

Wipe Out Your Debt and Improve Your Credit!

You see these ads everywhere, but can you trust them? What aren't they telling you? Is it really as good as it sounds? 

In tough economic times, the thought of being debt free is a powerful lure. For most people its a life long ambition. By the time 99% of the population gets out of college they're already tens of thousands of dollars, if not hundreds of thousands of dollars, in debt.

It's true that many lenders are willing to settle for pennies on the dollar.

The idea is that 60% of their money recovered is better than 0%, especially if they can reinvest that money with a lower risk borrower.

Debt settlement companies specialize in working with your lenders to settle those outstanding debts. They work for you, not the lender, but the lender has an incentive to work with them. There are definite advantages to using their service and some serious disadvantages, as well. You need to know the whole story so you can make an educated decision as to whether or not debt settlement is right for you.

How Debt Settlement Works

When you sign up for debt settlement, you must make monthly payments to the service based upon the agreed payment plan. It mostly has to do with the amount of debt you have, your income, and how quickly you want to pay it off. Obviously, the larger the payment, the faster you'll be out of debt.

While you're making these payments, the debt settlement service will contact your lenders and inform them that they, the service, is their new point of contact. They are instructed to refrain from calling you ever again. If you're getting these calls now, you know what a huge weight off your shoulders this one benefit can be.

Here's What They Don't Tell You About Debt Settlement

First, they usually keep the first few payments, or a percentage, thereof. This is how they make their money. Next, they don't actually pay anything. At least not until they have collected their fee and enough money to make a settlement offer. Lenders aren't interested in payment plans if they're going to take a loss. They want a lump sum. In the mean time, your lender is hitting you with fees and penalties and trashing your credit score. They may even be considering suing you in the hopes of getting a judgment against you.

It's a gamble. Pay off your inflated debt at 20%-70% off and walk away debt free or get sued and have a lien placed against your assets (i.e. house, car, bank account, salary, etc.).

I have personally seen a $120,000.00 debt settled for $24,000. I have also seen someone have their car repossessed and wages garnished. The main difference between the two? The person who settled for just 20% of their debt hired a debt settlement service right away. The service opened up communications with his lenders, which gave him time. The second guy hid for as long as he could. Lenders hate that. They looked at his assets and decided to slap a judgment on him.

If you're going to hire a debt settlement service, do it sooner, rather than later.

You may be thinking that bankruptcy may be a better option.Before you do, consider this...

When you file for bankruptcy, you have to pay your attorney ($300-$4500) and the trustee. They'll freeze your debts, add 10% for the trustee, and put you on a payment plan to pay off your debt over as many as 5 years. That's if you qualify for a chapter 13. If you don't make enough money, you'll have to file for a chapter 7. Same difference, except they'll freeze your assets too, and sell them off to pay your debts. Good bye car. Good bye house.

But it doesn't end there. You'll have a monthly audit where you'll have to prove you're trying to improve your situation. Are you looking for a job? Where did you interview? How many times? They'll crawl all over your personal and financial life like the IRS, leaving you feeling violated and exposed. And to put the icing on the cake, you'll have that bankruptcy on your credit report for up to 10 years after you're discharged, so the effects will linger long after you've paid the price.

In my opinion...

The upside to debt settlement is much better than bankruptcy.

If you do get sued, you could always file for bankruptcy later. Your credit is going to be damaged in either case. Personally, I'd rather roll the dice with debt settlement and have the potential benefit of settling your debt for just pennies on the dollar with all records of the occurrence dropping off your credit in 7 years instead of 10.

I've done my homework and found you a reputable debt settlement service. They're safe, reliable, and effective.

What to do if you can't pay your bills.

You held off as long as you could, but the bills are piling up and the creditors are starting to call. Its only a matter of time until they pass it off to a collection agency, then the real stress begins.

If you find yourself in this situation you only have a few options. They are:

1. Debt consolidation loan
2. Bankruptcy
3. Debt settlement

Today we'll take a look at...

Debt Consolidation Loans

Whether its a personal loan from a friend, a loan from a bank, or a mortgage against your house, the concept is the same. The idea is to take one loan at a low interest rate to pay off all your outstanding debts that are at higher interest rates, thus giving you one low monthly payment within your budget.

Historically, mortgages against your home are the lowest interest rates you can find. Lenders feel you'll try harder to protect your home than you would anything else. If you have equity, income, and a decent credit score, then I'd say this is your best bet.

Of course, you need to be careful that the loan officer or lender has your best interest in mind. I would always suggest pricing your loan out with at least 3 different loan officers from different companies to ensure you're getting the best deal.

Here's what you do...

1. Make sure you provide them with a credit report so each LO doesn't go crazy pulling your credit and adversely effecting your score. Get your credit report with FICO scores, the only scores the lenders use, from www.myFICO.com. They can use that score to shop your loan, but they'll need to pull their own credit report if you retain them to submit your loan.
2. Your loan officer should interview you so that they can find you the best loan for your goals and financial situation. They need to know how long you plan to stay in the house, if you have any major purchases coming up (i.e. if your kid is going to college, take more equity out now and save yourself from additional closing costs in the future), as well as the obvious questions that they need to know for a standard application. As long as they ask those questions, either in person or through an application, that's a good sign.
3. Get their offers in writing. You want to see the closing costs and terms of the loan before you sign or agree to anything. The more points you pay, the lower your monthly payment should be and vice versa. Application fee, credit report fee, points, and rate are negotiable. Some title fees may be negotiable as well. A good loan officer will reply with at least 2 loan scenarios/options. You'll end up with around 6 different offers to choose from. Just go with the offer that most closely matches your goals at the best overall price.
4. Remember, you can walk away. If the documents at closing are different than what you were promised, just walk away. You can rescind up to 3 days after you sign the closing documents.

Click here If you'd like me to refer you to one of my trusted home loan consultants.

Loans from Friends or Family

A loan from a friend or family member is also an option, though not a good one. Once you start bringing money into a relationship, the dynamic of that relationship changes. You are now a borrower/debtor, and your friend, a lender. In my opinion, friends are worth far more than any amount of money or any stress that comes with a lack of money. Still, it is an option and it should be mentioned. Just be careful. You can bear any stress if you have the support of family and friends.

Personal Loans

A personal loan is a better option. You'll need to apply BEFORE you fall behind on your bills. Once your credit is damaged, you won't be able to get approved or the rate will be so high it won't benefit your situation.

There are many great new sources of funding for people who need personal loans. A number of sites have popped up that match people who need money with people who have money to lend. The site takes a small fee and the lenders bid on the interest rate they want to earn on their money.

Here is a good one:
www.LendingClub.com

Click here for Part II: Debt Settlement Versus Bankrutpcy