It's Free, It's Fun, It's Your Credit Repair!?!

To say your credit history & score is HUGE these days may be a borderline understatement.
For purposes of my experience, I'll concentrate on how credit relates to getting a mortgage to buy a home or trying to refinance the one you currently own.

Talking about credit is about as much fun as chewing broken glass while watching Yanni's latest video on VH1, at least to most. Even for the most severe masochists or staunchest Yanni advocators, it's probably not a subject full of brim excitement.

So, I'll try to make this concise and simple. Educating yourself and working with professionals who can guide you along the way, to make sure your credit is worthy of a three course meal at the White House, is crucial. I'm not just talking about those whose credit is in the crapper. I'm also writing to folks whose credit may be moderate or maybe you've never made a late payment in your life but your score is low. The Credit Reporting Industry is wagging the dog, forget about whining... work and know the system.
Here are a few tips & quips:

* Get a copy of your Credit Report. It may not provide your actual credit score, but at least you can verify the accuracy of the information on your report. I've included information below that you can utilize to do this. Quick thing here, credit modules differ within industries. For example, the credit report a mortgage company pulls may differ from that of the institution giving you a car loan or credit card. Mortgage folks weigh heavy on student loans and car loans and even heavier on your Mortgage History, provided you have one.

* Communication is key with your credit. If you are experiencing rough financial times, call them before they WILL call you. Let your creditors know what is going on. It probably won't stop them from reporting you late to the credit agencies, but it probably will provide you one less of a headache. That's what life's all about... avoiding headaches:-)

* The only thing that may be just as bad or even worse than credit overload, is no credit at all. Establish yourself in the creditor's eyes. If you have no credit, get secured credit that reports to all three credit reporting agencies. This may mean making a deposit at your bank and taking out a loan against it or pre-paying on a credit card. If you are doing the latter, use that credit card and pay it off it off regularly.
...if you have a bankruptcy or foreclosure in your past, establishing 12-24 months worth of a good credit is absolutely crucial!

* Oh, those credit cards. I'll put it bluntly, the bigger the differential between what your current balance is and what your available balance is, the better for your Credit Score. Don't be afraid to call your credit card company and ask them to raise your available balance. Don't use it, just have it there to improve your credit standing and score.
...sidenote on credit cards. Don't be afraid to call your current credit holders and ask them to lower your interest rate. If the first person you talk to can't or won't, ask to speak with a manager. If unsuccessful in that endeavor, call back at a later date. Be persistent & professional in your efforts. Lowering your rate even the slightest bit can save you some serious money now and down the road.

* Pay your bills on time. Yeah, I know, this is a no-brainer to most. Yet, it doesn't report late to the credit bureaus until you fall 30 days late. Try to make sure you don't get 30 days late on anything. Sure, you may incur late fees if you are even a day behind on some credit, though Mortgage Companies typically give you a 15-day grace period before you incur any late fees. From my experience, make sure your mortgage/rent is paid on time first, then student & car loans, then credit cards. If you are a renter...
...pay your rent by check and keep copies of your canceled checks. Twelve months worth will do (pay month by month, pre-paid bulk payments won't do you any favors...create a consistent history). This establishes a housing history. While it doesn't do anything positive for your credit, it does wonders when you apply to buy a home.

* Settle delinquent accounts for pennies on the dollar. If you owe the International Bank of Jason Sardi a cool $5,000.00 and your account is charged off, you should call to arrange a settlement once it goes to collections. Often times, you can come to an agreement for a lump sum of $2,500.00 or less and you may even be able to work out a payment plan. Either case, make sure you pay that account satisfactory and get the paperwork of the agreement and the final pay-off to prove it. Paying off delinquent accounts will probably drop your score at first, but will do wonders for your score down the road (provided you keep paying everything else on time).

* Avoid 'Hard' Inquiries. Your current creditors may check your credit, but that is considered a 'Soft' inquiry and shouldn't affect your credit score. Yet, if you are applying for credit out the behind, those inquiries can adversely affect your score. It raises the red flag that you may be on your way to becoming credit dependent. Psychologically speaking, never give them that drift, make them know that their livelihood depends on you... not the other way around.

* Credit Restoration Companies may be able to help but avoid anything that says, "Consumer Credit Counseling." CCS is considered a form of bankruptcy in many lenders eyes and their ability to pay your debts at a 'consolidated interest rate & lower payment' is suspect and often times worsens the situation. On the other hand, I've only witnessed one Credit Restoration Company worth its weight in the seven years I've been traveling this gig. There may be and probably are more, but I've only witnessed one. If you want more info, contact me. Always remember though, you can do everything to make sure your credit is at it's best, yourself... it's a matter of being educated and persistence in your efforts. That takes time. Though time is a commodity not all of us have.

Below is info on the reporting agencies that you should contact to get started. Even if you have an above average credit score, you'll pay more than you should if your credit score is even 20 points lower than the next guy or gal. Save yourself money, put in the time and seek out the Mortgage Professionals to ensure that time is well spent. Your credit is crucial... our knowledge of the industry and mechanics involved... can save you money and fulfill your dreams of home-ownership. If you already are a homeowner, we can help you get on the path to make finances one less worry in this life.

Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
www.equifax.com

TransUnion
P.O. Box 2000
Chester, PA 19022-2000
1-800-916-8800
www.transunion.com

Experian
P.O. Box 2104
Allen, TX 75013
1-888-397-3742
www.experian.com

Bear in mind, at this point, you're entitled to one free credit report a year. Or, and I'd personally recommend this, you can get the whole batch which is simply called the 'Annual Credit Report Request Form.' That's free as well! The following sites will lead you in the right direction:

http://ftc.gov/credit

www.annualcreditreport.com


The bottom line in all this, the status of your credit can either cost or save you money. Which option sounds better to you?

Momma Told Me, Be Careful Shopping for a Mortgage

This post was originally written in May of 2008 but I thought it was not a bad idea to re-post it now. Amidst the talk of rock-bottom rates, there will be a lot of folks out there shopping for a mortgage. So, from the synapses of my brain to your eyes... here's my recommendations when shopping for a mortgage:

I'm well aware that most of us fancy ourselves smart shoppers. Whether we are buying a car, groceries, looking for the next Gas Station, sorting through bids on our next Home Improvement Estimate, shopping cell phone carriers...etc... we want the best deal. We want it cheap and efficient.

After over 7 years of being in the Mortgage Business and learning from and being trained by folks who have been in the business since Jimmy Carter took office, I've learned two things. Like any job, this can be frustrating as hell, but I absolutely love what I do. I've also learned how to shop smart! I'm only licensed in Pennsylvania and have friends & family outside the confines of where I can lend, they count on me to guide them accordingly.

That written, I want to pass some of my own personal thoughts on how you as a consumer can shop smart to make certain you are getting the best Mortgage for your needs. I'd ask for a drum roll but realize you have better things to do ... so I'll get to it.

5 Ways of Shopping Smart For A Mortgage:

- Begin the conversation with any Mortgage Company/Direct Lender/Bank with the following question, "What's your Interest Rate?" If the person on the other end quotes you a rate, hang up! Well, don't hang up ... that's kind of rude, just say thank you and you'll get back in touch with them. If you are being quoted a rate without them knowing anything about your financial situation, credit score and history, short and long-term goals, they aren't doing their job and won't be doing your situation any justice at all.

- Education is always key. While I love to know the what's in what I'm shopping for, I demand to know the why's of what is available and at what price. Look for a teacher, not a preacher. If they use the two ears they have and listen, what comes out of their mouth becomes all that more important. Your goals and desires and needs are on the line, seek out an advocate of those very things.

- There's another question you should ask, "How do you make your money?" In any 'sales' occupation, this tends to throw some off if the consumer dares to ask that question of the Professional. Ask that question though, it's relevant. If they are doing right by you, they are earning every penny. The price you will be paying for this service will be worth its weight ten times over on one of the biggest financial transactions you will ever partake in.

- When narrowing down who you want to make application with, my suggestion is to narrow it down to three entities. Ask a family member, friend or co-worker to refer you someone they had a good experience with. Go to the bank you hold your depositories (checking & savings accounts) with. Finally, do your own leg work by making a few calls and Internet inquiries, you'll want to shop with at least one Mortgage Broker. Use your gut to get a feel for the guy or gal who just clicks with you and your needs.

- Service & Availability. This is a huge one! Answering emails, returning calls, meeting with you at their office, being there every step of the way and beyond your loan closing ... that's probably the person you'll want to deal with. Having someone to inform you every step of the way and call just to say, "How the heck are you?" is something special & human. I don't know about you, but I want to go shopping at a place that is special and quite human. In the end, those folks tend to treat you the exact same.

Don't ever be a statistic!



Jason Sardi
Mortgage Consultant
First Choice Equity Group Inc.
610-439-2166 ext. 229
Toll Free @ 1-866-262-8720 ext. 229
jsardi@fcegi.com
Licensed with the Pennsylvania Department of Banking