Top 5 Myths About Credit Repair
By Vincent Polisi
The author has permitted the reprinting and redistribution of this
article.
Here Are The Top 5 Insider Secrets For Credit Repair.
1. Myth To get an inaccurate item corrected, you have to personally
dispute it with the credit bureaus and allow them 30 days to verify the
accuracy of the information before they will correct or remove the item.
While this is certainly the lease expensive method (it's free if you do
it online), it is also the most frustrating and time intensive. If you
are looking to make a major purchase of a home or a car, or refinance
them, there is a better way. Mortgage lenders and car dealerships have
direct access to the credit bureaus through their credit report
provider. Credit reports can be updated in as little as two hours
utilizing a little known vehicle called a Rapid Re-Score. This service
costs $25 per trade line per credit bureau. So, if an item is reporting
incorrectly on all three bureaus, it will cost $75 to correct that
account. All that is required is documentation from the lender with a
contact name and number indicating the correct information. Upon
submission, the information is verified, the credit report is updated
and a new credit score is generated. Standard turn times run 48-96
hours but as previously indicated, it can happen in as little as two
hours.
2. Myth If I pay my credit cards off every month my credit report will
show the cards with a zero balance and my credit score will be as high
as it can be.
If you utilize credit cards every month and pay them off on your due
date, your credit report will NEVER show a zero balance on these cards
and your score will be negatively affected due to the ratio of
utilization versus credit limit.
Why is this Because the credit card companies report balances owed on
the date they generate your monthly statement. So, to beat the system
you have to change the date you make your monthly payment to precede
the statement date. In other words, if your statement is generated on
the 15th of the month and your due date is the 25th of the month, every
month you will need to go online around the 12th, get your balance and
pay it to allow for time to process and register with the credit card
company's internal accounting system. Then, on the 15th when your
statement is generated, your statement will show that you owe nothing
and the credit card company will report your account with a zero
balance owed.
3. Myth You cannot get legitimate derogatory items removed.
There are a variety of ways to get legitimate derogatory items removed
ranging from negotiating with the lender to simply disputing the item
every month until they get tired of wasting the time and resources to
verify it and remove it.
4. Myth If you have bad credit a bank won't give you a loan.
To rebuild credit, you can go to a bank and buy a Certificate of
Deposit (CD). The bank will then allow you to borrow against the CD and
make monthly payments. For example, you buy a $2500 CD. You then
simultaneously get a loan from the bank with the CD as collateral for
$2500. Your out of pocket is zero, but now you have a legitimate bank
loan that will report to the credit bureaus. The obvious negative here
is that you will pay interest on the loan that is higher than the
return on the CD, but when your credit is in need of restoration and
rebuilding, you have to buy it back.
5. Myth Closing credit card accounts will help my credit score.
The credit bureaus actually run a ratio of utilization to maximum limit
of revolving accounts (credit cards) and this percentage is utilized as
a component of your credit score. Always leave credit card accounts
open even if you don't use them. Closing them lowers your available
credit and negatively impacts your credit score.
Vincent Polisi, President The Wealth Consortium & Finance The
Dream httpwww.thewealthconsortium.com httpwww.financethedream.com
vincent@thewealthconsortium.com 404-474-1878
If
you would like to take advantage of the market and learn how to invest
in real estate and you are local to the Dallas Fort Worth area, I know
a really great teacher and mentor here in Arlington Texas. Please take
a look at his web site: DennisJHenson.com,
Dennis has a great Mentoring and training program, I know because I am
one of his former students. I learned a lot from his one on one
teaching technique. - Michael Harman 817-457-7572
mchfun.business@gmail.com
http://www.biggerpockets.com/articles/