All About Credit Score

Credit crunch Q&A: “Does a short sale hurt your credit?”

Short sales, where properties are sold for less than the existing mortgage balance, have become increasingly popular in the past year.

While short sales are a foreclosure alternative, there’s a good chance they’ll still adversely affect your credit pretty substantially.

Straight from the horse’s mouth: Fair Isaac, creator of the Fico score, says there is no difference between foreclosures and short sales or deeds-in-lieu of foreclosure with regard to your credit score.

In other words, all of these events will show up on your credit report as “not paid as agreed” next to the associated account and have the same impact on your credit score.

Of course, that’s assuming banks and lenders report all of these events in a similar manner.

It also assumes that you are experiencing the same level of delinquency in each situation.

Imagine if you planned to carry out a short sale, but were not behind on monthly mortgage payments; you simply wanted to get out and were still meeting your obligations.

If you were facing foreclosure, you’d probably already have a number of mortgage lates on your credit report, so it’s not all necessarily equal.

Further, you may be able to negotiate with the lender to mark your mortgage account as “paid as agreed” if you choose to go with a short sale or another foreclosure alternative.

In the event of foreclosure, the lender isn’t going to give you any concessions, as it’s not in their best interest to foreclose.

This could explain why many homeowners and mortgage industry participants claim foreclosures and short sales impact credit scores differently.

Some say short sales lower credit scores 70-100 points, while foreclosure lowers your credit score 150-250 points or more.

Of course, the impact of a short sale or foreclosure on your credit score will always vary, based on the rest of the information on your credit report.

For example, if you’ve got light credit history, a short sale will have a greater impact, while those with years of positive credit history may see a smaller hit.

If you do decide to go with a short sale or another foreclosure alternative, try to work with the bank to minimize the credit impact, and make sure you get such promises in writing.

See also: bankruptcy vs foreclosure on credit.

Tags: Credit, Sale Hurt, Short Sale, Short Sale Hurt

Tip! Learn About Credit And .

Many businesses offer to repair your credit. There are credit repair specialists, credit repair lawyers, credit repair kits and credit repair counseling; the list goes on and on. If you are confused about how to repair credit scores, then you will be even more confused by this vast array of services and items which are supposed to help you repair your credit. There are certain things that you can keep in mind which may help you choose between credit repair counseling and other products. Credit repair is a very individual thing. Everyone has different issues and therefore has different needs.

Credit Repair & Collection Agencies Succ Credit Repair & Debt Collections Help For Consumers. A Self help strategy to deal with credit issues and collection problems. Read full post…

Tags: Credit, Credit Scores

Credit Tip! Tell the CRA what information you believe is inaccurate on your credit report. Include copies, never originals of documents that support your position.

Ready to apply for a mortgage loan? Thinking about getting a new credit card? Before you do, you may want to review a copy of your credit report to ensure that all your information is accurate. And, fortunately, there are quite a few ways to obtain a free copy of your credit report. Here’s how:

Make a phone call

There are three major credit reporting bureaus: Equifax, Experian and TransUnion. They are legally required to provide you with a copy of your credit report–for free!–once a year. And obtaining your report can be as simple as making a phone call! Just

Read full post…

Tags: Credit Report, Report

If you dispute a credit tradeline and it’s noted on your credit report, Fannie Mae and Freddie Mac will make it more difficult for your mortgage to get approved, according to a report in the LA Times.

The pair, which own or guarantee a large chunk of mortgages these days, recently changed their automated underwriting guidelines to kick back any files that show signs of credit disputes.

While a credit dispute isn’t inherently a bad thing (it shouldn’t hurt your credit score), the mortgage financiers wants to make sure the dispute(s) is legit, as there are certainly companies and consumers out there gaming the system.

You know, those credit repair companies that claim to remove negative items from your credit report even if they are legitimate and accurate.

While it may seem like an unnecessary, untimely bureaucratic move, it’s a measure to reduce fraud, because mortgage delinquencies continue to rise at the pair of government sponsored entities.

They won’t decline your mortgage application outright, but they will force it into manual underwriting, which will slow the process and lead to a lot more scrutiny.

That means there’s a greater chance your home loan application will get pushed to the bottom of the pile, or possibly never get processed if business is flowing relatively smoothly otherwise for loan originators.

All that said, if you believe a creditor is reporting something in error, you should attempt to fix it; learn more about how to dispute an item on your credit report.

Tags: Mortgage

Credit Tip! The credit report plays a significant role in the functioning of consumer credit markets. Since loans are advanced based on the credit reports the chances of loans going bad are minimal.

If you’re thinking about getting a loan or credit card, it’s a good idea to check your credit report. In fact, experts recommend that we check our credit report every year. It’s a good way to see if your credit score is accurate and to look for possible identity theft. Fortunately, you can access your credit report online for free. And when you get it, you should check for:

Basic mistakes and errors.

Carefully review your basic information–name, address, previous addresses and social security number. It’s im

Read full post…

Tags: Credit Report, Report