Credit Tips

• Aug 30, 2010
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  Three Common Mistakes People Make in Repairing their Credit

  Many Americans are seeing their scores go down in these tough economic times… with lenders lowering credit limits, raising interest rates and increasing payment amounts — people are struggling just to make ends meet. The sad thing is, during tough economic hard times you really need good credit! Here are a few tips to help you make the most out of your credit score.

  Mistake 1: Closing Old Credit Card Accounts

  Do not close old credit card accounts! Account longevity gives you positive length of history and affects 15% of your overall credit score. By closing your oldest account, your credit history will appear shorter and this can negatively affect your credit score. Even when closing out negative accounts, review the account credit history (length) against the rest of your credit report to determine the best course of action — even closing negative accounts can lower your credit score!

  For the same reason, you do not want your creditors closing your accounts due to non-use. Keep old cards active by using them once a month and paying the balance in full when the payment is due.

  Mistake 2: Ignoring Available Credit to Debt Ratios

  The available credit to debt ratio is important because it affects 30% of your credit score. Keeping these ratios below 50% is wise and below 30% is even wiser. It is never a good idea to close open balanced accounts; the debt ratio will go up and the number of seasoned tradelines will decrease.

  How do you improve your credit to debt ratios? Pay down the debt, ask for a credit limit increase, or add a new trade line with available credit.

  Mistake 3. Settling Collection Debt without a Confidentiality Agreement

  Many people believe that simply paying down old collection debts will improve a credit score, while, in fact, it could actually reduce your credit score.

  Here’s why: Old collection debt is just that — old, and the length of time since the date of last activity makes the derogatory account weigh less in the credit formulas. Once you make a payment on an older debt, the date of last activity becomes the date of your recent payment, causing the derogatory collection to weigh more heavily in the credit formulas.

  So how do you get around this? Considering the collection reporting is not one of your oldest accounts giving you long credit history, you can ask the collection company, as part of the settlement, to sign a confidentiality clause agreeing to no longer report the debt to the credit bureaus.

  In Conclusion:

  It is important that you avoiding common credit repair mistakes: don’t close old credit card accounts; take note of your debt to available credit ratios to keep them below 50%, preferably 30%; and be extremely careful when negotiating old debt settlements so that you do not add another 7 years of reporting to your credit record.

• Mar 22, 2010
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  Automated Injustice

  The National Consumer Law Center (NCLC) has published a new report revealing industry-wide problems with how credit bureaus handle consumer disputes.

  The findings of the report are unlikely to surprise any consumer who has tried to dispute an error on his or her credit report.

  Bureau representatives have repeatedly told our office that a dispute only requires them to compare the information they report to the information the creditor provided. If the information matches, the investigation is deemed complete. But, courts have repeatedly rejected this interpretation of bureaus’ investigation duties under the Fair Credit Reporting Act (FCRA.)

  And, in the course of handling consumer disputes, our office has never seen a single example of a bureau actually forwarding a consumer’s dispute letter and supporting documentation to a creditor / subscriber for investigation. Yet, this is one of the tasks bureaus are charged with under the Fair Credit Reporting Act. The NCLC report discusses this industry failure as well.

  Here is the link: http://www.consumerlaw.org/issues/credit_reporting/content/automated_injustice.pdf

• Nov 4, 2009
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  Home Destinations

  Home Destinations was founded, by owner Holly Jewell, in November of 2008 to help individuals and families maintain ownership of their homes or become home owners.

  “At the time I started Home Destinations, foreclosures were on the rise and I knew I had to do something to help families stay in their homes, additionally the banks’ lending standards were tightening making it more difficult for home buyers to obtain loans”

  – Holly Jewell
  …
  

  Home Destinations took market trends into account and designed an integrated approach to improving the financial well-being of our clients by offering credit restoration, debt resolution, mortgage modifications, and mortgages. Home Destinations is also aligned with affiliate companies such as financial advisors, realtors, and mortgage brokers and works in a non-compete capacity to improve the financial standing of our mutual clients.