America’s largest home builder DR Horton has choosen National Credit Federation as it’s go to credit repair company!

I have been in Houston, TX the last few days with one of our Regional Directors Dan Fries, who laid the ground work for this relationship, along with several other NCF consultants.

You see DR Horton having partnered with Bank of America as it’s go to mortgage lender knew that many people could not buy their dream home or for that matter their first home due to their credit scores.  As Alfredo Rodriquez, the Director of “My New Home” a pilot program of DR Horton designed to put more people into a home of their own, explained to me… they needed the best credit repair company they could find and their search ended with an agreement to have National Credit Federation as it’s sole source for those with credit challenges.  His biggest reason was…

I talked with a member a couple days ago that was totally frustrated with the credit bureaus and the whole credit scoring process.  Hmmmm…sound familiar?

Jack’s situation was that he had paid off several bills with a bonus check from work about 10 days ago.  He had called the three credit card companies involved and verified he had indeed posted the payoffs which totaled almost $6000.  He then had his mortgage broker pull a new credit report thinking he would have the increase in credit score that he thought the payoffs would give.  He only needed about 17 points to qualify for this loan but was told that his scores had actually gone down 2 points from a month prior.

Well this is what prompted Jack’s call.  He was confused and upset that he had read something I wrote previously about how FICO computes credit scores.  He thought that by freeing up his credit lines and paying down the debt would help his credit scores.   Was he right?

On occasion, I am asked are things better or worse? When it comes to “credit things”  I think a higher percentage of people are trying to tackle their budgets by keeping their spending down to align more with their income realizing the tapping into their homes equity days are over, at least for the time being.  Many people are tackling any bad credit they may have incurred realizing that any costs of credit repair are a drop in the bucket compared to just letting any bad credit stay on their credit report for 7-10 years.

People are trying to be as responsible as possible to increase their credit scores because the reality is

It’s true, new car loan defaults are decreasing! It’s also true it doesn’t take much of a rocket scientist to understand that by tightening down the lending criteria for consumers looking for new auto loans this would be an expected result.

There are some interesting facts.  Taking a look at the 720 credit score plus category FICO reports that in the May to June 2009 period 1 out of every 411 borrowers went 60 days or more past due on their new car loan payment.  During the same time period in 2008, 1 out of 288 fell past due in the second year which is a 43% reduction.

If you look at the same time periods but in the credit score range or 300 to 599 you’ll find almost an 11% 60 day delinquency rate for new car loans during the period ending April 2009 and a huge reduction down to 8% for the same period ending 2010.

Why would anyone be interested in reading about credit report collections? Well, most the time it’s because you have been denied credit and have ordered the credit report to see what’s going on.  Low and behold many times there are collections on your credit report.  These collections are being reported by collection agencies and they’re killing your credit scores!

When someone researches their credit report for problems and finds collections, usually the immediate response is to begin looking for ways to correct or remove those items from their credit report. The good news is there are a few ways. The most popular way is by disputing them with one of the 3 main credit bureaus (Equifax, Trans Union and Experian) that are reporting them.

You can also contact the collection agency directly and try to…

We are living in crazy times!

There appears to be an over abundance of homeowners on the horizon that are looking to “buy and bail”. Talking with many mortgage brokers the trend seems be be on the rise as they are experiencing more calls from prospective homeowners looking to finance a new home so they can dump their current property to buy a new one that in many cases is more home for less dollars.

This is the one of the newest trends that mortgage lenders are being watchful of as the trend continues even though Fannie Mae and Freddie Mac have pulled out all stops trying to tighten down the noose on many would be homeowners according to Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency.

The Reality…

Sometimes old debt that you thought was long ago dead and forgotten comes back to haunt you.

A scary practice performed by junk debt buyers and collection companies is the purchase of old and often outdated debts for pennies on the dollar and then come after you for payment.

These outdated debts are known as Zombie Debts which you may have to kill if they resurrect from the grave.

Everyone has suspected that the average credit scores have been falling. The economy has given a serious black eye to credit and credit scores and now we know how much!

FICO.com has just reported that 25.5% of the US population that use credit now have a credit score of 599 or less. That’s a whopping 43.4 million people in this category.  In the past about 15% or 25.5 million have been in this category which means that over the last 2 years there are been an increase of 17.9 million people fall under a 599 credit score which is a whopping 70% increase!

Overall 35% of the population are at a 649 credit score or less. What does this mean?  Basically, look at the person to the right and look to the left and the dirty truth is that one of the three of you cannot buy a house nor car and are considered unworthy of credit by many lenders and are in need of help with credit repair.

Life can be down right miserable when you are traveling through a financial storm! Many people have done all the right things like paying their bills on time, living within their means, putting aside money for a rainy day and yet they still experience life.

I don’t know if a statistic exists for this next statement but I’d venture to say a high percentage of people at one point or another are thrown a curve ball in the game of life.  At least when it comes to their financial well being.  This set back occurs even though they did not plan on it, cause it, nor want it to happen.  Many of the stories of this hardship that I’ve heard simply come in different shapes and sizes but ultimately loss of job, a medical hardship, business failure, or divorce rank in the top few as the reasons people enter that financial storm.

Really, the better question should be “How MUCH does bad credit cost you?  In a word…TONS!

Your FICO scores are determined by a number of things but most importantly how timely your credit is paid and the overall amount of credit used as compared to your credit lines available.  Of course other factors come into play but these two play the most significant in determining your credit score.

Your credit score for many lenders is the biggest factor if your loan will be approved at all and at what interest rate. To give you an example I was speaking to one of our members and he was telling me he had a credit score of 552 and over the last few months had increased his scores to 632.  At first you might say not to shabby, an 80 point increase.  I agree,  an 80 point credit score increase is nothing to sneeze at and certainly looks like some solid credit repair has been under way!