Tag

Bad Credit Archives | Page 2 of 2 | Ovation Credit Repair Services

Rates Are Low, But Can You Get a Mortgage?

By | Credit Repair, Credit Reports, Credit Scores, Debt, Fannie Mae, Home Buying, Homeowner, Loan, Mortgage, Real Estate, Your Credit

Mortgage rates are bouncing off of 40 year lows.  Seems like the best time to buy a house or refinance.  Not so fast – there is a catch.  You have to qualify first!

Before the recession, qualifying for a mortgage was not much of an issue.  The overall standards were pretty low.  If you had a low credit score, you could still qualify for financing.  Your credit score did not necessarily determine if you qualified more so than the rate that you qualified for.   People with higher credit scores received lower rates and people with lower credit scores received higher rates.  But just about everyone qualified for something. 

The lending environment today is vastly different.  Only those that meet the highest qualification standards can get financing.  According to the Federal Reserve, about seventy five percent of those that apply for financing are qualifying.  Of course, the number of those applying for loans has decreased significantly. 

According to Fannie Mae and Freddie Mac, the average credit score for loans that they finance has risen to 760.  It was 720 just a few years ago.  For FHA loans, the average score has increased to 700 from 660.

The subprime market has just about disappeared altogether.  Before the recession, subprime lenders routinely made loans to borrowers with credit scores below 620.  Today, it is very difficult to find lenders willing to make these loans. 

If you are thinking about financing, you should check your credit score.  If your score is below some of the qualifying averages, take proactive steps to improve your credit scores.  Remember, about eighty percent of the credit reports contain errors.  With a little bit of effort, you might find that you do qualify for a loan at the current rates after all.

What Items Are Reported to the Credit Bureaus?

By | Consumer Rights, Credit Cards, Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act, Personal Finance

The credit reporting system is not perfect.  In fact, it is far from perfect.  As a result, a consumer that manages credit responsibly may not be rewarded with an appropriate credit score.  To understand how this can happen, consumers need to understand who reports credit data to the credit bureaus. 

Approximately 30,000 data furnishers provide data to the credit bureaus each month.  This results in about 4 billion points of data each month.  That breaks down to approximately 130 million items each and every day.  The largest providers of data are financial service providers such as banks, credit unions, and consumer finance companies. 

While these numbers are staggering, there is a lot of data that is not reported.   Creditors are not actually required to report data to the credit bureaus.  As a result, some creditors choose not to report any data at all.  Other creditors choose to only report negative information or to exclude important key data points such as credit limits.  If you have positive information and your creditors do not report it the bureaus, or if they only report negative or incomplete items, your credit score will be impacted negatively.  This is simply because you will not receive the benefit of this positive information when your credit score is calculated.

So why wouldn’t a creditor want to report information?  Some creditors are concerned that their competitors will obtain valuable information about their customers and then use this information to compete for the customers or evaluate certain lines of business.  Some creditors choose not to report to limit the potential liability imposed on data providers by the Fair Credit Reporting Act.  Some creditors simply want to avoid the costs associated with providing data altogether.  These costs include reporting expenses, dispute investigation expenses, compliance expenses, and system maintenance expenses.  Some regulated entities, such as telephone companies, are restricted by regulations as to the information they may report.  Some of these companies, for example, are only permitted to report data about accounts that are past due or are in a charged-off status.

If you are trying to improve your credit score, it is important that you work with creditors that report both positive information as well as the negative information.  It is also important that they report all of the information, not just selective data that may negatively impact your credit score even though your account is in good standing. Check your credit report frequently and verify that all of your creditors are reporting to the credit bureaus correctly.  Remember that your credit score is based only on the information that is reported, and your credit score could be higher if you have positive information that is not reported or not reported completely.

You’re Ready. Is Your Credit?

By | Consumer Rights, Credit Repair, Credit Reports, Credit Scores, Personal Finance, Your Credit

Armed with an impressive resume and knowledge of the company you are interviewing for, you confidently approach the interviewer and begin to craft the inspiring ‘first impression’ you envisioned last night as you went to bed.

You may feel prepared for the interview and qualified for the new job, but there is a strong possibility that the interviewer has already formed an opinion about you – through information contained in your credit report. 

Increasing numbers of companies are requesting credit reports to assist them in the job hiring process.  Essentially, your credit report is your financial resume and employers use it as an indicator of your personal integrity and how and how you conduct your life.  With that in mind, it’s alarming that seventy none percent of all credit reports contain errors.  A qualified job seeker simply can’t afford to have credit report errors sabotage an excellent employment history.

In the competitive job market, an accurate credit history may be the decisive factor in gaining a job interview.  Inaccurate credit reports can torpedo the most impressive resumes, and you won’t have a second chance to make a first impression.

The labor market is not only intense form the job seekers standpoint, but employers also are striving to gain a competitive advantage in the hiring process by accessing all the information available to improve the quality of the workforce.  Employers are also more likely to check the credit history of prospective employees who will be involved in some aspect of the company’s finances.

You can use this trend of employer credit checking to your benefit by repairing and/or maintaining a clean credit history.  Your credit report is your financial fingerprint, so check it frequently and keep it accurate so you are prepared to jump on the dream job opportunity should the occasion arise.

Information on Credit Reports

By | Consumer Rights, Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act

Credit Reports generally contain five types of information:

Identification Information: Information such as the name of the individual, current and previous residential addresses, and Social Security number.

Trade Line Information: Detailed information reported by creditors and other furnishers on each current and past loan, lease, or other debt (such as utility and medical debts).

Public Record Information: Information derived from financial-related public records, such as records of bankruptcies, foreclosures, tax liens, garnishments, and other civil judgments.

Collection Account Information: Information reported by collection agencies regarding credit accounts and other debts.

Inquiry Information: Identities of individuals or companies that have requested information from an individual’s credit file; the date of inquiry; and an indication of whether the inquiry was by the consumer, for the review of an existing account, or to help the inquirer decide on a potential future account or relationship.

Unfortunately, an alarming number of these files (credit reports) contain serious errors and could cause the denial of credit, a loan, or a job, so monitor your credit report and minimize or eliminate future credit problems.  A recent study of consumer credit found that 3 out of every 4 credit reports contain errors, some large enough to cause credit denials.

  • Twenty-five percent (25%) of the credit reports contained errors serious enough to result in the denial of credit;
  • Seventy-nine percent (79%) of the credit reports contained mistakes of some kind;
  • Fifty-four percent (54%) of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;
  • Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.

Your Rights Under The Fair Credit Reporting Act

By | Consumer Rights, Credit Laws, Credit Repair, Debt, Fair Credit Reporting Act, Your Credit

Fair Credit Reporting Act

The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Here is a summary of your major rights under the FCRA.

  • You must be told if information in your file has been used against you.

Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment – or to take another adverse action against you – must tell you, and must give you the name, address, and phone number of the agency that provided the information.

  • You have the right to know what is in your file.

You may request and obtain all the information about you in the files of a consumer reporting agency (your “file disclosure”). You will be required to provide proper identification, which may include your Social Security number. In many cases, the disclosure will be free.

  • You are entitled to a free file disclosure if:

a person has taken adverse action against you because of information in your credit report; you are the victim of identify theft and place a fraud alert in your file; your file contains inaccurate information as a result of fraud; you are on public assistance; you are unemployed but expect to apply for employment within 60 days.  In addition, as of September 2005 all consumers will be entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies.

  • You have the right to ask for a credit score.

Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. You may request a credit score from consumer reporting agencies that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for free from the mortgage lender.

  • You have the right to dispute incomplete or inaccurate information.

If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous.

  • Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.

Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.

  • Consumer reporting agencies may not report outdated negative information.

 In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.

  • Access to your file is limited.

A consumer reporting agency may provide information about you only to people with a valid need — usually to consider an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for access.

  • You must give your consent for reports to be provided to employers.

A consumer reporting agency may not give out information about you to your employer, or a potential employer, without your written consent given to the employer. Written consent generally is not required in the trucking industry.

  • You may limit “prescreened” offers of credit and insurance you get based on information in your credit report.

Unsolicited “prescreened” offers for credit and insurance must include a toll-free phone number you can call if you choose to remove your name and address from the lists these offers are based on.

  • You may seek damages from violators.

If a consumer reporting agency, or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to sue in state or federal court.

Credit Repair: How Can You Tell The Good From the Bad?

By | Consumer Rights, Credit Repair, Fraud Protection

It’s a jungle out there! The following list identifies a few things you should consider when selecting a credit repair company:

1: Does the company identify their owners/attorneys, or addresses?
Unfortunately, the internet allows many scammers to appear as legitimate companies through legitimate looking websites. Before you give your hard earned money and personal information to anyone, make sure you can verify the company’s information and credentials. You can verify Ovation’s information from a number of independent sources including the Florida Bar, the Florida Department of State, and the Better Business Bureau.

2: Does the company have significant Better Business Bureau Complaints (or are not even affiliated with the Better Business Bureau)?
While any company can accrue a few random BBB complaints, significant number of complaints may be an indication that the company does not operate fairly towards its customers. Check BBB reports frequently and avoid companies that manage to accrue hundreds of complaints. To check for complaints, visit www.bbb.org and click on “Go to Local BBBs”. Question any company that chooses not to be affiliated with the Better Business Bureau; they may be trying to hide the truth about their organization. Our history with the Better Business Bureau dates back to 1976.

3: Does the company request fees in advance?
The Credit Repair Organizations Act (CROA) requires that credit repair company charge for services only after they are  rendered. Requirements for large upfront payments are tell-tale warning signs of unethical companies. We only charge for work that has been completed in full. Learn more about the CROA in our Learning Center.

4: Does the company disclose your rights?
Consumers have the right to conduct their own credit report repair. You don’t have to hire someone to do if for you. For those that do, Ovation offers its services to individuals seeking legal professionals to manage their credit report repair. Ovation discloses your rights to you on every page of our website as well as in your signup package. We want you to be informed and you should steer clear of any company that doesn’t want you to know your rights.

5: Does the company advocate illegal tactics such as creating “new” identities?
Creating a new identity by applying for a Employer Identification Number to merge or replace a social security number is a serious crime and can lead to significant personal liability. To learn more about this type of illegal credit tactic, visit our Learning Center.

6: Does the company advocate fraudulent reporting of credit lines?
Purchasing a listing on someone else’s credit lines for the purpose of reporting a positive account is unethical at best. Trying to con the credit bureaus and your future and current creditors is a significant issue that can lead to personal liability. To learn more about this type of illegal credit tactic, visit our Learning Center.

7: Does the company simply dispute all your negative items without requiring any input for the client?
Regardless of how they market themselves, this is a key indicator that the company is a “rookie”. Not only are these types of companies violating federal law by disputing on your behalf in bad faith (which could lead to personal liability), these companies are making it more difficult for you to achieve sustainable results. To learn more about this type of illegal credit tactic, visit our Learning Center.

What is an EIN? Since My Credit is Bad, Can I Apply for an EIN and Start Over with a New Credit File with the Credit Bureaus?

By | Ask a Credit Expert, Consumer Rights, Credit Laws, Credit Repair, Personal Finance, Your Credit

An EIN is an Employer Identification Number.  It is given to new businesses and used to track their payroll and business taxes and for businesses to file their taxes.  This is not to be used for individual use. However, there are some credit repair companies out there that tell consumers to apply for an EIN for their personal use and for their credit. By trying to use an EIN as your SSN you will actually create a File Segregation (two different files at the credit bureaus) AND it is Illegal. Once the Credit Bureaus find this error they will put both of your credit files together usually making your credit situation worse than what it was before.

If you are looking to improve or repair your credit and you call a company for help and they tell you to apply for an EIN, turn and run. It is illegal and will get you into trouble which can include fines and other consequences. Make sure you write down the information about the company and then file a complaint with the Federal Trade Commission at www.ftc.gov.  Tell the FTC about this company and any other information that you have about them: like where they are located, a web address, what they told you, the company name, phone number, etc.

If you are looking for help with your credit reports and with credit repair then don’t worry about those companies.  Contact the BEST, Ovation Credit Services and you will not have to worry about anything illegal or any type of scam.  Give our Credit Analysts a call at 866-639-3426 – Option 2 or send them your questions to [email protected].  If you have any questions for our Credit Expert Kristi Thornton you can write her at [email protected].  We look forward to helping you with all of your credit needs!!!

Call Now for a FREE Credit Consultation

CALL US NOW