Are you worried about your credit history? Just about everyone has something in their past credit that is less than perfect. The most important thing is to learn what is on your report, determine what impact that information has on your credit rating, and work on repairing and restoring any damage that may have been done.

Mortgage loan options are rated by credit, labeled like school grades - "A" credit is the best, then down to A-, B, C, etc. Even if you do not have an A credit rating, we can let you know what your options are if you fall into an A- or lower category. The rates are generally going to be higher, and may require a down payment. If you determine that you are not satisfied with this type of financing, then together we can map out what you need to do with your credit and finances for the next six to twelve months in order to qualify for an A credit loan.

For your convenience, You fill find below a very comprehensive strategy to either improve, correct and/or establish credit. I highly recommend pulling your credit once a year: Not only it is a great snapshot of your debt structure but more importantly the most efficient way to detect any identity theft.

Upon review of the below material, feel free to contact me for your Credit report and debt analysis at 661-709-9392.

Credit repositories do not pass judgment on whether or not a lender should loan money to you, but they do summarize your borrowing and paying behavior in the form of an overall credit score. The score is used to track how your credit score history compares with that of other borrowers. A loan officer can use the score, together with other criteria, to decide whether or not to approve you the loan.

Generally, your score is based on the following percentage breakdown:

The fact that each credit repository uses its own modified version of a FICO model to score your credit history means that there is a variation in scores between the different repositories. Therefore, you cannot compare scores issued by the different credit repositories against each other.

Disputing Errors in your Credit Report

Very few people have spotless credit records. (If you’re one of them, good for you!) It’s also true that credit repositories are not perfect and that credit reports sometimes contain errors or misinformation regarding credit histories. For example, if you bought and item and charged it on your credit card, then returned the item because it was defective but, due to a clerical error, were never credited for the return, your monthly statement might still show an outstanding balance for the amount of the purchase. While you’re resolving the issue with the credit card agency, the outstanding balance might appear on your credit report as an overdue payment.

Based on a study prepared by the U.S. Public Interest Research Group, 70% of all credit reports contain errors of some kind, and 29% contain serious errors. Common errors include accounts erroneously reported to have been opened that are either delinquent or designated to the wrong individual.

The Federal Fair Credit Reporting Act (FCRA) gives you the right to dispute errors you find in your credit report. (If you are ever denied by a credit lender, the FCRA requires that the lender provide you with the name(s) and address(es) of the credit repository that supplied the information used in the credit screening process.) If you inform a credit repository of an error, that repository is required to investigate your claim within 30 days. In particular, they must present your claim to source of the error- for example, a merchant, doctor, or bank. The source then investigates the error and reports directly to the credit repository.

If the investigation confirms your claim, the credit repository must provide you with a written report of their results and must change your credit report accordingly. If the dispute is not resolved to your satisfaction you can add a brief statement (of 100 words or less) to your credit file describing the dispute and telling your side of the story. The credit repository is required to include a summary of your statement in all future reports.

If you’ve never borrowed money before you will need to establish new credit before you can start developing a credit history. Money lenders require four or more trade lines as evidence of sufficient, established credit. You can do so by either obtaining credit cards or by using a “credit pursuit” strategy. The first method is a straightforward technique for establishing basic credit. The second method is more complex than the first but can quickly lead to a strong credit rating.

These days, almost everyone has at least one credit card. If you don’t have one now, you should make it a goal to get one. Credit cards are a convenient way to establish and develop credit. In the current economic climate, credit card companies face stiff competition from each other, and many offer cards with no annual fees and low interest rates. It is to your advantage to evaluate the competitiveness of your current cards and/ or to compare lending institutions before obtaining a new credit card.

It is generally advisable to have more than one credit card, but you should think twice about obtaining more than two cards, especially if you have difficulty controlling your buying impulses. Having too many credit cards can sometimes hurt your ability to get a loan, even if you never use the cards. A lender might decide, for example that the total amount of credit available to you might allow you to build up a greater debt load that you could reasonably handle.

At first glance, it might seem difficult or impossible to obtain credit cards if you have no credit history. After all, how can a lender or credit card agency determine your creditworthiness if you

have no past performance to evaluate? It’s not uncommon, however, for some businesses and credit card agencies to issue cards to first time-time cardholders. They key to obtaining such cards is in knowing which cards to apply for and how to apply for credit. To increase your chances of obtaining a first credit, you should apply to businesses or lenders that most readily issue such cards. A few such businesses and lenders include:

·         Gasoline companies, airlines, and major department store chains.

·         Local merchants

·         Banks that offer “secured” credit cards

Gasoline companies, airlines, and major department store chains (such as Sears or JCPenney) often represent the easiest types of credit cards to obtain. As national retailers in a competitive environment, they’re interested in attracting and retaining as many potential customers as they can. By issuing credit cards they make it convenient for consumers to purchase goods in their stores.

Local merchants, such as furniture stores or appliance outlets are often willing to extend first-time credit to local residents. Like the national chains, they are interested in attracting and retaining potential customers. In the case of local merchants, however, reputations often spread by word of mouth. Showing preference to local residents helps a merchant build strong and loyal customer base.

Secured credit cards look like ordinary credit cards-like VISA or MasterCard. They work differently, however, in that they don’t represent an actual loan by issuing agency. Instead, charges made using a secured credit card are withdrawn from an existing account (your money). The balance in that account sets the credit limit on the card. For example, if you have a secured credit card with a $300 limit, you can charge purchases against the card up to a maximum of $300. Each purchase you make lowers the limit on the card, and when the limit reaches $0, you cannot use the card until you deposit more money into the account.

Secured credit cards do not directly establish credit, but they do establish a relationship with the issuing agency- for example, a local bank. Oftentimes, when the balance in the account is depleted the back will extend an unsecured line of credit on the card. Please keep in mind that this card might negatively affect your credit score.

To obtain a secured credit card, visit a bank that offers such cards and deposit money into an account against which the card charges will be drawn. If the bank extends an unsecured credit limit when the when the account is depleted, continue to use the card in moderation and make payments on time each month.

If you have cash available to you but do not have credit yet, you can use the cash to generate a credit history by using a “credit pursuit” strategy. The credit pursuit strategy works by using your available cash to purchase financial instruments that are then used as collateral to secure loans. It can be broken down into two major phases:

• Phase I- Establishing Credit

• Phase II- Building Credit

The first phase of the credit pursuit strategy is a six- step process designed to use available cash to establish a credit history. It goes like this:

1. Contact three local banks to find out the minimum amount of money that each is willing to loan on a short term (six months) basis.

2. Visit each bank and purchase a six month certificate of deposit (CD) in an amount equal to the minimum amount that the bank will loan on a short- term basis. For example, if the minimum amount of money that each is willing to loan on a short term basis is $1,000, purchase a CD in

the amount of $1,000 at the bank.

3. Two weeks after you purchase the CDs, visit each bank again and apply for a six month installment loan in an amount exactly equal to the value of the CD held in the bank. For example, you would apply for a loan of $1,000. (Make sure that the terms of the loans you apply for are six months or longer; otherwise, the loans will not show up on your credit report.)

At each bank, offer to use the CD issued by the bank as collateral to secure the loan. Loan officers are generally comfortable making such loans because if the loan is not repaid the banks take ownership of the CD used as collateral. From the bank’s point of view the loan is a very low risk.

If a loan officer asks your purpose in obtaining the loan be honest and admit that you’re trying to develop credit with the bank. Reassure the officer that the loan will be repaid on time, if not earlier than the term allows; indicate that your eventual goal is to obtain a mortgage loan from the bank.

4. Deposit the money that you receive from three loans into an interest -bearing checking or   savings account. You will use the money in the account to pay back the loans.

5. In each of the next three- weeks, make full monthly payments on all three loans. After that, make regular payments on time each month until all three loans are paid off.

6. At the end of six months, redeem the CDs to recover the initial investment.

In most cases, you will receive a repayment coupon book, from each bank shortly after you take out the loan. You must include a coupon from the book with each loan payment. It is advisable to make one or two payments directly to the loan officer rather than through the mail. Doing so provides you with an opportunity to get to know and build a relationship with the loan officer, whom you can then use as a reference when applying for loans at other banks.

After completing this strategy, you will have established a positive credit record with three separate banks, each of whose loans will be listed on your credit report. From then on, you can use three banks as credit references on future loan applications and, if you have developed a relationship with the loan officers at the banks, you can even use their names directly.

Because you recover the initial investment when the CD matures, the initial cost of this strategy is minimal. In fact, the total cost is equal to the interest you pay on the three loans, minus the interest earned on the CDs and the money borrowed.

In the second phase of the credit pursuit strategy, you improve the credit history you established in Phase I through an ongoing process that involves the following steps:

1. After you have completed Phase I and establish credit, return to each of the three banks and apply for a $500 unsecured loan for a term of 60 to 90 days.

2. Repay each loan ahead of schedule.

3. Six months later, return to each banks again and apply for a loan in an amount larger than that of the previous loan.

4. Repay the new loans ahead of schedule.

5. Repeat steps 3 and 4 every six months.

By borrowing larger and larger amounts of money from each bank in the form of unsecured loans, and repaying each loan ahead of schedule, you will improve your borrowing reputation with the banks and make it easier to borrow the large amounts of money that are sometimes required for real estate transactions.

I’ll say it again- your credit can never be too good. If you have bad credit, you should take steps to repair it so that you will be able to borrow fund when necessary to fix-up projects or other expenses related to real estate investment. If you have good credit, it pays to make it better because doing so opens doors to opportunities that are otherwise unavailable to you.

Bad credit is usually due to either errors in your credit report or past borrowing and payment behavior. If your credit has been damaged by errors in your credit report, you can take steps to repair it by obtaining the report and disputing the errors. (See the previous section, “Disputing Errors in Your Credit Report.”) If your poor credit rating is the result of past behavior, you must stop the behavior and develop a new reputation of paying on time.

If you have existing credit cards or accounts, you can begin the repair process by making regular monthly payments equal to or greater than the minimum amount due, and by cutting down on your spending, if necessary- at least until the account sizes are at a manageable size. One of the most important factors in determining your credit worthiness is your ability to pay bills on time. By making regular payments, even if they amount to no more than the minimum due, you establish a reputation as a trustworthy borrower.

If your current credit is so bad that you’re unable to obtain a credit card by the methods just described, you should seek help through any of the privately operated agencies that specialize in obtaining cards for people who have trouble getting them. Such agencies do no charge for their services if they’re not successful getting you a card. You can usually find them listed in the phone book, in the classified ad section of your local newspaper, or in major national newspapers like the Wall Street Journal and USA Today. You can also find them on the internet by using search engine- like the ones available at www.yahoo.com, www.lycos.com, or www.google.com.

Keep in mind that, because your credit rating is based on your personal history of borrowing and making payments, the process of repairing bad credit can take a long time. Be patient and take heart.

If you already have good credit, you can improve it by increasing your credit card spending limits or by opening a line of credit with a supplier or opting out from credit card offers. In addition to improving your credit, it’s also important to protect the credit you have. The easiest way to do so is by obtaining overdraft protection.

Your overall credit rating depends, in part, on the size of your credit card limits. If you have good credit, the institutions that issue credit cards to you will often increase your spending limits upon request.

Sometimes you can raise the limits simply by putting your cards to use. In short, your credit is like a muscle- the more you exercise it, the stronger it becomes, especially if you don’t pay off the balance every month. To employ this strategy to increase your limits, charge a purchase on your credit card and make a payment each month that is 20% greater than the minimum payment. In several months, the institution that issued the credit card will probably increase your spending limits automatically.

In addition to making good credit better, it’s important to preserve the good credit you already have. One simple way to do so is to obtain overdraft protection at your bank.

Overdraft protection prevents you from having checks returned to your bank for lack of funds. It works by advancing a small loan to you if you write a check that exceeds the amount of money you have in your account. Under the right circumstances, you can receive up to $100,000 of overdraft protection. This protection is especially useful when you need a cash advance for down payments and closing costs, because unlike credit card agencies, banks, usually do not impose a service charge for the advance. In addition the interest rate on a cash advance from a bank is typically lower than it is for a credit card cash advance.

If you already have good credit, your bank will almost certainly allow you to apply for overdraft protection, and you’ll probably be required to fill out a credit application. Some banks charge an annual fee for the service, which can range from $20 to $50, while others don’t charge at all. If your current bank does not offer overdraft protection, you should open an account at one that does.

Log in to www.optoutprescreen.com and opt out for 5 years. Within 60 days, about 85% of the credit card offers you normally receive will disappear. Credit bureaus will consider you less tempted to apply for credit and will increase your credit scores between 7 to 15 points.

In 2003 the Fair Credit Reporting Act (FCRA) was amended to take effect in late 2004. These amendments to the FCRA create additional protections against identity theft including…

-Allowing consumers to block, and requiring Credit Reporting Agencies (CRAs) to block, fraud-generated accounts from appearing on their credit reports.

-Requiring CRAs to notify furnishers that blocked account is fraudulent.

-Allowing consumers with a "good faith suspicion" they are fraud victims to place an initial fraud alert for 90 days.

-Permitting consumers who provide an official identity theft report from either the Federal Trade Commission or the local police, to place an extended fraud alert up to 7 years.

-Requiring the CRA that received the alert to pass it on to the other CRAs.

-Permitting those on active military duty to place "active duty" alerts.

-When a report contains an alert, requiring CRAs to notify users of discrepancies in addresses.

-Prohibit sale or collection of debts resulting from identity theft.

You don’t need good credit to buy real estate, but having good credit increases your financing options and therefore, your investment opportunities. Credit is a measure of trust between a lender and a borrower, and the more trustworthy you are in repaying your loans, the more willing lenders will be to loan money to you.

There are three main credit bureaus that most creditors (such as credit card companies, banks, leasing companies, etc) provide information to on a monthly basis. Each month, your credit holders report information to the credit bureaus about your current balance, minimum payment requirements, and credit history. If you need specific information from one of the major credit bureaus, following is the contact information for each of them:

Experian Information Service (XPN)
PO Box 2002
Allen, TX 75013
(888) 397-3742

TransUnion (TUC)
PO Box 1000
Chester, PA 79022
(800) 916-8800

Equifax Information Services (EFX)
PO Box 740243
Atlanta, GA 30374
(800) 685-1111

To order your credit report and debt analysis, please call us at (661) 709-9392 ; or Click here to e-mail your request.