Pro Money Investor: October 2010

Buying A House with Bad Credit

Buying a house is a true dream that you have and your bad credit is not helping you.If you are the one who is struggling in buying a house with bad credit,this article is for you.Here you can explore different options available for you to fulfill your dream.

You may be well aware that credit score is a three digit number which measures your credit worthiness.It is used by the lenders as one of the important factor in taking a decision about approving your mortgage or home loan.

When your payment history is bad or when you had missed few monthly bills on time,it will be reflected in your credit report.This will do enough damage for you and this black marks remain in your credit history for a long time.Every lenders who wish to approve your loan application first go through your credit report.He will approve your loan request only when he feel safe about his money.In many cases your application is even taken care by a computer and when you are having bad report,it will automatically reject your application.

Here you can not stop the lender and he will fetch the financial data from a credit reporting agency.The best way is disclose your credit score problems to the lender with your loan application.You can attach a written letter about the reasons for bad credit.You may have a genuine reason like loss of job or a serious health issue which led you into financial mess.You can explain all this to the lenders and wait for the result.

You can ask your loan officer about the problems in approving the loan.Let us know what has to be corrected to get the approval.Rather waiting for the decision,you can start correcting the problems that you have.

There are certain lenders who wish to give you a loan to the people with bad credit.This will help in buying a new home with bad credit.But you shall understand that,you need to pay extra interest than a regular mortgage or a home loan.This is the price you have to pay for your past behavior and the choice that you have is limited.

When it turns difficult for you to find some of this kind of lenders,you can look for mortgage brokers.As they are the people who used to be in touch with different lenders, they know the lenders who can approve easily.They will guide you by understanding your credit report and its problems properly.

You can find some sellers financing.The rules for this people are not that much rigid.They want tax advantage and high rates of return.When your present credit behavior is good,they do not bother a lot about your past history and they may approve your loan application.

You can try getting a co-borrower to get a better result.This time both of your credit scores come into play for consideration.If the other person is having a better score,you may get advantage and easy approval.

Picture source : http://www.flickr.com/photos/executionsinfo/3773636315/)

If all this things fail,you may need to take a pause.You can hold yourself from buying a home and loosing too much of money in the name of extra interest rate.You can just wait for two years to fulfil your dream.You may save some money in this time for a better down payment and keep your good credit history to improve your credit score.It is sure that soon a lender could be knocking your door to give a loving loan with lower interest rate.

All the Best.

Negative affect of closing account on credit score
Credit Score misconceptions and real truths
Misconceptions about FICO score
Fixing and rebuilding credit score

Fixing and Rebuilding Credit Score

When you have financial problems because of unavoidable reasons,you need to take some risks and your score is reduced to a lower value.Here are the methods to rebuild your credit score and fix your three digit magic credit score.You might have used the options like debt settlement,credit counseling or filed bankruptcy.This will be ultimately reflected in your report and you are frustrated that all new loans applications are rejected. First you need to understand how the system of the score works.This helps you in rebuilding your fico score quickly.Because of financial crisis that shacked the world,lenders turned more cautions.Thus getting a new loan with bad payment history is difficult now.

As you can not correct back the past,you shall think about the present to get better deals in the future.Business people and reporting agencies care more about how is your present and recent behavior and commitment to bills is and do not care that much about the past.They may demand you to shell out high interest rate for the sum taken from them.

The problem can not be solved in one or two months and you can build it back near to the normal with in two years.If you are dedicated,by the time the black marks in the report erases that is seven years for a bankruptcy filing,you can have score which is better than average score.

You can try rebuilding your credit card account easily if you are a student.Many lenders love to remove the negative mark in your statement when you pay bills on time for a continuous twelve moths. For a non student candidate this time may be double and it depends on the lender.

Some times it happen that the delay of bill by sixty or one twenty days may be reported twice in the report by the collection agency and it makes your report worse.You can cross check it and request for elimination of duplicated bad entries.

(picture source http://www.flickr.com/photos/smithsonian/4327907016/)

It also happens that some vendors bill you for some thing that they have not actually offered.Once you reject to pay them,they will report it to the collection agency and it will stay back in your report for long time.You can fight back against this kind of tactics in the court and you need to be patient.

Credit Score misconceptions and real truths
Misconceptions about FICO score

Credit Score Improvement Misconceptions

Credit score is important for every one and improving it very vital to get a better loan deals like auto loans and mortgage offers.People get advice basing on the inference of some one.Some times this leads to wrong assessment of the truth.In the previous posts we had a discussion about a misconception that closing a account improve credit score. This is not true and shall understand the concept properly. Misconceptions and real truths about raising the fico score like checking accounts,not using the available credit improve the three digit score.

Further misconceptions are

Pay interest and get better credit score :

Another wrong idea is you have to carry forward the debit that you have by missing the monthly bills.This lead to the payment of interest rate and gives good impression for the lenders.Though lenders get extra money in the name of interest,they feel insecure.Your credibility about paying back the commitments comes under scanner.

You need to have both revolving accounts like credit cards and installment accounts like a mortgage. The other way is if you are looking for improvement of the score.Here you can take a small loan,pay it back every month on time and your three digit number will be improved over the time.But you need to shell out the interest money.This can establish your history of payments and show positive impact.

Adding 100 word statement improve the score when dispute is unsolved:

At times it happens that you are billed for a service that is not given to you.Like a phone bill or a club membership.You have asked them to disconnect and remove,still they continue billing to you.The problem is you can dispute them and ask for verification.At the same time you can not stop paying the bill issued.This lead to the information passed to the credit reporting agency.In turn affect your three digit score.So even if you dispute,pay the bill and ask for refund.This can be done at least when the billing amount is small.This shall not be understand that you are advised to loose your valuable money.This is to tell you that do not loose your valuable credit score.

You can not say that I will add a 100 word statement and come out of the problem.Only human beings can read it and in most of the cases,weather you get a loan approval or not is decided by the standard computer software.When your score is low it automatically rejects your application and you have no chance to explain about your problem to the machine.

FICO score is not adjusted basing on your hundred word statement that you have added.This only help you to explain to some one when you meet the lender directly about the wrong thing in the report.That is why pay the small disputed bill on time and sue the lender or service provider in small claims court.

If you have bought some thing with credit card and it is not working then you can use the companies dispute resolution process.They can help you in dealing the business person who has given a bad service.

Credit Counseling reduce your FICO Score

When you run into financial trouble,you can go for a credit counseling and it will be reported in the report.But it is not a negative one like bankruptcy.According the present system,this treated as a neutral one not either positiver or negative by the agency.They can negotiate a lower interest rate for and and put all your debits into one monthly installment.This reduce your burden and helps in making your financial life better.They are not going to do any magic and reduce your total principle to be paid and they can try reducing the debit by negotiating with the lenders.They cart plans for your monthly payments so that you need not file a bankruptcy.

Any way you have chosen as you have no other option and suffer the pain it could give.Some lenders may report as your payment after debit management plan as late since you are not paying as promised.You have no option other than baring this.Though it is a negative factor for the lenders in the report,it will be removed from the report,once you pay back the money as per the plan.But do remember it is much better than bankruptcy as it remains in the report for a long period of minimum seven years.

This you shall choose only when you are able to pay only minimum of the total debit that you had.

(Picture source : http://www.flickr.com/photos/39299636@N00/2553694525/)

File Bankruptcy,You will never get credit once again

It is last option that you have and definitely affect your score seriously.This report stay back with black mark for a minimum of seven years.It does not mean that you are in a list that you will never get back the loan or a credit.

You need to recover your score and make your report further good after filing the bankruptcy.Handling the credit responsibly further and paying the bills on time make it better and recover your score.Having less balances to pay for the settled amounts make it better.

You need to look for specific lenders who offer the loans to you after filing the bankruptcy.There will be non main stream lenders offer auto loans at higher interest rate for you.You need to pay that extra money and get the deal.You can establish the new history by paying the bills on time.

You need to have more patience to find some one who is ready to offer a loan and give second chance.

Credit score chart and help in improving it
Credit score chart
Credit score help
Raise fico score
Five important factors that influence your credit score
Factors that affect your credit score
Fix score problems 500 credit score problems and solutions
Pay bills on time for better score
Fix score by paying down the debit
Source to get money and pay bills to improve credit score
Negative affect of closing account on credit score
Credit Score misconceptions and real truths
Buying house with bad credit score

Credit Score Misconceptions and Real Truths

For every one who want a helping hand to fulfill the wonderful dreams,getting credit for them is important.This task like a easy mortgage at lower interest rate or auto loan can be obtained only with a good credit score.When you start thinking about making your FICO score better,You do come across many people or companies start giving you advice like this and that.At times it happens like,they may guide you in a wrong way and it leads to the loss of valuable score.This post is for you who are having the problems and would like to know about this kind of misconceptions.The previous post deals with the misconception of Closing Accounts Improve Credit Score.

Let us talk about other wrong assumptions and the real truths.

1.Lowering Credit Limit Boosts my FICO Score :

The idea is it make your profile less risky.As the lenders need to give you less money,they feel it is OK to do the favor of accepting your loan application.It is a bad idea actually.Lowering the limit reduce the available credit.There shall be good gap between available amount and used money.This make your profile less risky.The simple way to solve the problem is paying down the debit that you have.This increase the gap and betters your score.

2. Checking own account reduce the score :

It is like check your bank account,your balance will reduce.It is even ridiculous to say that checking your own report,has negative affect on it.You have a right to check it and you need to make sure that every thing present is correct.The federal government allows to take a free report once in a year from each agency.If you want to apply for new credit,you shall make sure that every thing is all right with your fico reports.You shall check them few months in advance and ask for corrections if needed.It takes time for the errors to be corrected and that is why you need to start preparing the ground bit early.

Enquirers generated by you are neglected the agencies and will not affect your score in any way.The truth is it is affected when your lenders pulls your report and not you.You shall not give that chance to the bankers or lenders unless it is needed.That means you shall apply for new line of credit only when it is needed.Every applied loan lead to a hard inquiry and reduce your score up to some extend.

3. Looking for a best deal reduce your three digit Score:

It is all right to search for a better auto or mortgage deal with lowest interest available in market.You can search for it approach different lenders for it.Let them inquire about you and this may not affect you.Multiple inquiries from different lenders about same kind of lenders with in a period of thirty days will be treated like only one hard inquiry.Any way you shall know that auto loan inquiry and mortgage one are not treated like same one inquiry and they are treated differently.So you shall finish the deal with in this thirty days period.

You need to do ground work for this like you shall know your score and identify the possible interest rate.Check the net sites and lenders online to get a rough idea.You shall have complete information before you approach the lenders.This makes your job easy and you can finish the deal with in the period and hence save your report and get the dream fulfilled.

You shall not give your credit or other financial deals to the lenders until you have decided the buy from them.They start pulling your records and it is needed when you are buying it.Though multiple inquiries on a single day are treated as one,the list in the report grow and looks annoying.

(Photo source : http://www.flickr.com/photos/littlesister/260512522/)

Once if a loan is rejected by some lenders because of the bad score reason,you shall first try to improve it.With out that if you keep applying for a new loan,it further affect your report.You shall first try paying the bills on time,paying the down payment of debit and getting a secured credit card to improve payment history.

4. Improve FICO Score by not using any Credit Available :

It is a wrong idea that you shall not use the credit and live with cash paying options.This is not going to impress your lender when you apply for a auto loan or mortgage loan.The report tells about you to the lender that how do you handle the credit problem and how well you pay back the monthly bills.If you have not taken any credit,you will not have any payment history and it is going to be a stumbling block for getting the expected loan offer.

It does not mean that you shall live in debit,but you shall use the available credit and create a page of history for you.Even if you have no interest in taking the loans,you shall take care about your three digit score.It is because even insurance companies look at your report to fix a new interest rate or premium.Better the score,less the premium.And the employee is also going to find about your fico report before taking a decision about a promotion or new appointment.

Negative affect of closing account on credit score

Misconceptions about Credit Score Improvement

As credit score is very important to get better financial deals like mortgage at lower interest rate,every one is interested in having a better score.The kind of advice you get some times from some one is misleading and you will fall in that wrong notation.Here I am going to discuss some of this wrong beliefs and try to analyze them.

1.Closing Accounts help in improving the credit Score

It is a wrong impression that every one gives to consumers that closing accounts help in improving the credit score.This may not be the truth and some times even leads to loss of valuable score.

This three digit magic number is a indication of your financial responsibility.Once you start paying your bills on time and do it over the time,your score and report will be good.This tells about you to the lenders that you are nice in paying back the commitments that you have obliged.Longer the history of payment history you maintain in good condition,more the credible you are.Business people like lenders and bank representatives keep searching for the guy like you.When ever they find you,they flood you with good deals with lower interest rates.

Opening the credit lines that are not in actual need are seen in a negative way and per sure they are going to reduce your score.The damage is done and it is not just reversible.That is closing the account is not going to give you back your score.

Negative affects of closing a active account :

In fact it is going to further reduce your number low for two following reasons.

1. If you close a account,that too a older one,your average age of the credit will be reduced.It is seen in a bad by the lenders.Older the age better for them and they feel that you are more reliable.

2. Cl0sing a existing account reduce the total available amount of money as credit for you.Better the gap between the available amount and used money for nice FICO score.Closing account reduce the available balance and reduce the gap between available and used money. It is not about paying the bill on time.This negative affect will be there even when you pay all the bills on time. At times people miss lead you about this and if your score is improved,it is not because of this reason and there could be another good reason behind it.

You can close your accounts when :

1.You can try closing the unwanted and unused cards when you are having 700+ score.But they shall not be high limit and old accounts.Other wise wait until your score is improved.

2.If you are worried about uncontrolled spending and to come out the problem,your solution is to close some accounts.Here,at least for the time being,credit score is not your serious concern.

3.If a lender has approved a loan or mortgage on the condition that you shall close the unused accounts and got the approval,you can explore this option.Here the benefit that you are getting shall be much better than the loss of the score.

Raise my credit score over view and hep
Help in improving your three digit number
Fix score by paying down the debit
Source to get money and pay bills to improve credit score

Improve Credit Score easily -Simple steps

Improving credit score is important to get the favorite deals like auto loan or mortgage at lower interest rate.Once if it is bad for some reason like a late paid bill,you shall take some corrective measures to improve it.As it is mentioned in the previous post,paying the debt and consolidating it makes a difference to the finance score.Any way you need money for that and let us try to find out different options to raise fund for filling the gaps.

1.Going for a yard sale like unnecessary items,cloths,items and you can use channel like e bay for this process.This may give you some money to fund your bills.

2.You can reduce your spending and try to have sort of self discipline.Roaming around lead to the money spending and you can save it by entertaining yourself at home.If you write down every penny you spend and check out its need,you can analyze and restrict yourself.

3.Doing a second job during the night time is surely a difficult task and you can consider this as long as it is required.You can do this until the debts are cleared.

People generally have a thought that too many accounts that is credit lines are causing the low score and by closing them you can improve it.This is not true.Some times it may even hurt your fico score and you shall be careful about it.

Closing the existing account reduce your available credit and hence used credit will increase.This is a negative factor on the financial score.Another issue is reduction of average age of total accounts.This happens when you close older accounts and you shall not do that.Any way you shall keep the old accounts active and you can do this by paying at least small bills like a news paper or a magazine subscription.See that the bill is paid on time through online or automatic bank account.Then the bill will not be bounced and credit payment history will be improved.

Applying for the credit shall be done sparingly only when it is needed.Opening many lines of requests once lead to hard inquiries and affect your report. It does not mean that you shall not apply and try getting money when it is needed and shall be done only when it is needed.

(Picture source : http://www.flickr.com/photos/vinzcha/3518840077/)

Starting to have the payment and history from long time will be good.Thus better to start early like when you are a student.Getting a approval for that is quite easy and you can build history from early age.You can also learn responsibility in running the money.For any reason if your application is rejected for a new card,better to apply for departmental card and it is easy to get it.Here you have to deposit some money into.

Pay bills on time for better score
Fix score by paying down the debit

Fix Credit Score By Paying Down the Debit

Credit score can be fixed by paying the large amount of the debits that you have.After the payment history,it is this ratio that how much money that you are using when compared with the amount that you are eligible that makes the big affect on your fico score.Lenders feel good about you when you are using small portion of the available credit when compared with the large score that you have.Simply to put you shall have a card with high limit and you shall you small amount of it.The finance score also checks how much all together you are using when compared with the total limit that you have on all your credit lines.This also shall be lower.

It is better to use all the cards uniformly such that no card is having too much of load on it.That means you shall not use high credit in any account.Better distribute the total amount into all the accounts that you have,so that available balance in each card will be high.Lenders treat this in a positive way and they believe that you are not desperately using available lines.Thus in their eyes you are having a financial discipline. This does not mean that you keep transferring with out actually paying the bills.This leads to high balances and you need to clear them for better credit score.

(photo source @ http://www.flickr.com/photos/frenchy/4354484141/)

Rather paying the high bills to improve your magic three digit score,it is better to pay the debit that is close to the maximum limit.You can continue doing one by one each time the bill shall go to some one where you had used high value of the limit.This is a better approach for improvement of the fico score.

It is a bad idea to pass all the balances to a single card who offer a low interest rate in terms of the financial report and score.This reduces the balance available balance in the account and make a bad affect on score.

Paying monthly bills on time is a good habit and helps a lot in improving the FICO score.This save your valuable money in terms of interest and extra fines of late payments.Better to use only thirty percent of total available credit to have a good report.When your score is all ready high this limit shall be much smaller like only ten percent to maintain that good credit score.

Help in improving your three digit number
Credit score help Fix credit score tips and ideas

Fix Credit Score by paying Bills On Time

If you want to fix your credit score and would like to have a better FICO report,you shall be careful about the bills that are in due.Paying a single bill late can cost you a lot in terms of three digit magic number and all your previous efforts to improve it will go in vain.This negative affect of late payment of a loan will be more evident when you are all ready having a good score.For the lenders a late payment is a good indicator that you are in financial trouble.They don't want to risk their own money by offering a new loan that you have asked for.Thus your new loan application will be rejected or asked to pay high interest rate.

Payment history make more than one third of credit score and hence paying the dues every time on time is very much needed.In general a one or two day delay is not going to matter you seriously.In most of the cases a thirty day delay will be informed to the agencies by the creditors.But a one or two days delay will attract late payment fee and you may need to pay extra and increased interest rate money.You need to know that creditor take it as late payment if they are unable to get it on time that is in general 1 PM on the payment date.

One late payment can cost you a lot.Your credit card companies and insurers periodically review their interest rates.Your bad credit report can put you in high interest rate bracket and it will make your pocket thin.It is your responsibility to pay the bills on time and the creditor need to report you and remind you frequently.Even if you have not got the bill,it is your responsibility to check and pay and if not late payment will be reported to the agency.So checking the dues will keep you know even about identity theft.

To over come all this problems.You shall note down all the payment dates of the bills and keep track of them.This could be monthly bills or quarterly bills.You can note them down in a paper or electronic calender and have a reminder in your mobile phone.This will keep you remembering the things and payment won't be late.

You can also automatic bill payments from your bank account.This will save your energy and time as well as no problem of late payments.Lenders or banks directly collect money from your account and send you information regarding it.You shall not worry that the lenders is accessing your account and knowing your financial details.This is not the truth and he only get the money from the account and he will not the statement of your account.The law prohibits the lenders to take extra money from your account and you need not worry about that too.You can have a bit of extra money in your account and can also take over draft facility.This save you from a missing bill or not having the money in the account.

( Picture source : http://www.flickr.com/photos/abhi_ryan/2282921259/)

You can automate the bill payment process even through credit card.The wrong bill collection problems can be even solved in this case with the help of credit card company.For this you need to pay your card bill every month on time to protect your interest rate.You can also pay your small bills with this card to avoid big monthly bills.

You can also register your self for each company and pay the bills online.Many companies even give you safety over hacking and discount in bill.It is because it will save their bill with less number of offices and employees.

The other simple option is pay the bills as they come in.Then you need not worry about reminders or missing them.But every time a new bill comes,you have to spare your time to attend it and pay it.

Credit score help
Five important factors that influence your credit score
Factors that affect your credit score
Fix score problems 500 credit score problems and solutions

Fix Credit Score Solutions Complete Information

Credit Score Fixing and improving your credit report is a vital factor to get the financial benefits like a first time home loan or a mortgage or a auto loan at the lowest possible interest rate in the market a As you are all well aware of it and hence making the magic three digit FICO number better will always pay you back in the long term.This is not a factor that you can completely leave to some one like a agency or expert and forget about.You shall constantly think and improve the number for better results.

500 credit score is a bad dream and we shall come out of it as early as possible.You also shall aware that building a good report and score is important.You need to keep on having the financial discipline even to keep that good three digit number good.Here I compile the list of posts available in this blog at one place for the sake of reference.This shall be a constant source and will be keep updated with new posts.So you can subscribe or book mark this page to come back.

Here is the list of posts.

1.How to Deal with Credit Bureaus:

This post deals with the way of getting free report or paid report from the agency.You are entitled to get a report free once in a year free from each agency.Once you got the report you can check for the errors and ask for fixing them.This may help you in improving your score.
Find more information at

How to deal with credit bureaus

2.How to fix errors in the report ?

As we are taking about some times your report is having negative issues that are due to wrong reporting of creditors to the agencies.If some payment is made on time and they issue a fine and report it like late payment it is going to cost you a lot and reduce your score significantly.Not only that,it become further difficult to get the new loans. Let us know how to fix the errors that are there in the report at

How to fix errors in credit report

3.Black marks in Credit Report:

The negative marks in the report is always a bad thing and they are going to stay back for a relatively long time.What area the serious negative factors and how to fix them can be learned at

Black marks in credit report and how to correct them

4.Methods to improve your credit score :

As we have mentioned in the introduction improving the magic number is going to make big difference to your financial life and even to the personal life as it will give you peace of mind.Let us have a basic discussion regarding the methods to improve the score at

Simple ways to improve your credit score

Raise my credit score an over view

Raise your credit score chart