How to fix your credit in Fairfield CT: Part 1 of a 4 part series

First and foremost get a copy of your credit report! You can't fix something if you don't know what's wrong. Everyday I have people call me up to repair their credit because they "know it's bad" but don't know exactly what's there. Well step one is to pull your head up out of the sand and look around (insert chuckle here).

Now the next question to answer is do you want a "soft" or a "hard" pull. A soft pull is when you check your own credit report. A soft pull inquiry does not count against you. A hard pull is when your credit is checked by a lender, car finance company, credit card issuer, etc. Hard inquiries can have (not always) a small (read usually less than 5 points) effect on your credit score.

First, there is only 1 place to get a truly free credit report (despite what those tv commercials may try to tell you). The web address for your free yearly credit report is www.annualcreditreport.com. There you can check all three of the credit bureaus: Trans Union, Experian, and Equifax. Because you are checking your own credit it is considered a "soft" pull and will not affect your scores. You can not check your FICO scores though.

If you decide to let a loan officer or someone else check the credit for you, be aware it will be a hard inquiry. Ask them in advance if they are willing to give you a copy of the report. Also ask them if it will be from all three credit bureaus and will it have a FICO score from each bureau. Know what you are getting.

There are many other websites that allow consumers to check their credit which are "quasi" free. That means it is a free credit report if you join their credit monitoring program. Most of these say that if you cancel your membership within so many days you will not be charged which is how they get away with advertising it as a "free" credit report. The best of these is probably credit.com at this webaddress.

Be wary of FAKO scores. A FICO score is the score used by lenders nationwide for mortgage financing. A FICO score comes from FICO company (formerly called Fair Isaac). Many companies now offer FAKO scores which are more profitable for them to offer. The most common of these scores are a Vantage Score or a Plus Score. The bottom line is read the fine print - make sure what you are getting is a FICO score or don't bother.

Many people will tell you that you can no longer get your FICO scores as a consumer. In fact I use to think this was a case as well. Now I recommend www.cumic.org. They offer credit reports for consumers. They cost a little more à $20 per report, but they are in an easy format to read, have a FICO score from all three bureaus, and are a soft pull which will not count against you.

Stay tuned in two days for part 2 - what to do once you have your report!

:)
Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
330 Roberts Street 4th Floor
East Hartford, CT 06108

credit repair service

Over the past few weeks the news surrounding FICO has been coming fast and furious. The Federal lawsuit filed by FICO against Experian, TransUnion and VantageScore Solutions was partially dismissed but left several counts that will now proceed to trial later this year. Additionally, the credit scoring company announced that FICO 08, their newest credit score, would be available at all three of the national credit reporting agencies starting in August 2009. This means that Experian has finally agreed to install and make available the credit score several months after TransUnion and Equifax had done so.

Regarding the FICO lawsuit:

On July 24th the Honorable Ann Montgomery ruled on a request to dismiss a lawsuit filed in Federal court by FICO (more formally referred to as Fair Isaac) against VantageScore Solutions, TransUnion and Experian. Judge Montgomery dismissed some of the counts and left others in place therefore leading the parties toward trial later this year.

The lawsuit, among other things, claims breach of contract and trademark infringement. The Order sheds a public light on a number of very interesting things that were not previously known, including email communication between executives of the credit reporting agencies. Some of the more interesting nuggets of gold, with emphasis added, from the Order are;

1. The proposed joint venture between the three credit reporting agencies was referred to as either "Operation Triad" or "Project Trident" and eventually lead to the creation of VantageScore Solutions and subsequently the VantageScore scoring model. VantageScore is a credit risk score but uses a different credit scoring range (501-990) as the FICO score (300-850). VantageScore also converts their numeric score to an alpha display using the academic A-F range, which seems comical considering VantageScore is not a lender and doesn't underwrite loans. The assertion that they know how to grade a consumer's as being an "A" versus a "B" is a responsibility solely for a lender, not a credit score developer.

It's also important to note that while Equifax was originally named as a defendant they reached a settlement with FICO on or around June of 2008 and is no longer a party to the lawsuit. The fact that the bureaus named the project after a military weapon sheds light on their mindset at the time.

2. In February of 2005 Experian enlisted the assistance of a consulting firm, which at the time was called Mercer Oliver Wyman. Today this firm is referred to as Oliver Wyman and is a division of Marsh & McLennan. According to the Order this firm created a document for Experian that suggested "through the joint venture (VantageScore), the credit bureaus could build their own scoring model and transfer Fair Isaac's revenue ENTIRELY to themselves." The difficulty of replacing entrenched credit scoring systems seems to have been grossly underestimated. I wonder if Experian asked for a refund considering the consultant's misread of the market.

3. The original VantageScore scoring model "relied on the algorithms in Experian's own in-house, tri-bureau scoring model, which Experian made available to the team." The bureaus announced VantageScore to the market in March of 2006. FICO files their lawsuit on October 11th of the same year. This seems to contradict VantageScore's marketing literature, "The nation's three consumer credit reporting companies - Equifax, Experian and TransUnion - worked together to develop a tri-bureau generic credit scoring system."

4. Each of the credit bureaus pays $300,000 annually to secure royalty-free and global licenses for the use of the VantageScore model.

5. Prior to the introduction of VantageScore TransUnion's royalty payments to FICO was $40,000,000. After the introduction of VantageScore the royalty payments were $44,000,000. No time frames were given so these figures could represent an annual amount or cover some other period of time but assuming the comparison is apples to apples it seems to suggest that FICO has not lost any market share to VantageScore. This means consumers applying for credit will likely have their loans underwritten by a lender using a FICO score.

6. With respect to the confusion in the consumer market of other scores with similar score ranges to that of the FICO score (300-850), "The evidence identified by Fair Isaac lends support to the inference that Defendants intentionally copied Fair Isaac's 300-850 mark and that consumers confused Defendants credit scores with FICO credit scores as a result." In English what this means is the credit bureaus intentionally chose score ranges that were similar to FICO's 300-850 in order to confuse consumers who were shopping online for the credit scores. This has been a consistent criticism of both Experian and TransUnion for years. Equifax does not sell any credit score to consumers other than the legitimate FICO score so they're not a target of the criticism. The simple question "why did you choose a score range similar to FICO's" is one that they finally had to answer in court, although smart consumers already knew what they were up to.

7. The published FICO score ranges of 300 to 850 seems to not be the actual FICO score range. From the Order "Fair Isaac argues in response that the term 300-850 is not the "actual scoring range for any of [Fair Isaac's] classic FICO credit scores. The actual scoring range for the first FICO score developed for Trans Union is 397-871, for Experian is 368-839, and for Equifax is 407-829. Every version of these scores has a different range-none of which is 300-850."

Regarding FICO 08:

According to a press release issued by FICO on July 22nd "FICO 08 Credit Score Available at All Three National Credit Reporting Agencies" by the end of July. Experian had refused to adopt the model because of their ongoing litigation with Fair Isaac. And already "five of the seven largest U.S. banks and four of the five largest credit card issuers" have begun testing or using the new score.

What this means is consumers who have a large amount of credit card debt or are highly utilized will likely see lower FICO 08 scores. This is because of the added importance of credit card debt built within the model. It also means adding yourself onto the credit card of another person in an attempt to "piggyback" your way to a better score will be impossible sooner rather than later.

A benefit to consumers is FICO 08's logic, which ignores very low dollar collections, commonly referred to as nuisance collections. Consumers who are seeing their scores lowered by collections with an original amount less than $100 will see immediate benefit with FICO 08. This is an incentive for lenders to more quickly adopt the new score because savvy consumers who have these small collections will know that a lender who uses FICO 08 will see them in a much better light. Nothing will incent a lender to adopt the newer model faster than prospects going to competing banks just to ensure a better credit score.

This is the 20 year anniversary of the introduction of the FICO score at a credit bureau. Consumers who conduct banking or insurance business at pretty much any bank, mortgage lender, or insurance company are subject to FICO's evaluation.

:)
Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
330 Roberts Street 4th Floor
East Hartford, CT 06108

credit repair

With all the economic news, numbers and statistics coming at us every day, I thought it would be good to keep all the numbers in perspective and not to let them age us too fast. Here is one of my favorite pieces to help keep all these numbers from overwhelming us. Hope this brings a smile to your face, too!

HOW TO STAY YOUNG
(by George Carlin)

1. Throw out nonessential numbers. These include age, weight and height. Let the doctor worry about them. That is why you pay him/her.

2. Keep only cheerful friends. The grouches pull you down.

3. Keep learning. Learn more about the computer, crafts, gardening, investments, sports, whatever. Never let the brain idle. " An idle mind is the devil's workshop." And the devil's name is Alzheimer's.

4. Enjoy the simple things.

5. Laugh often, long and loud. Laugh until you gasp for breath.

6. The tears happen. Endure, grieve, and move on.
The only person who is with us our entire life, is ourselves.
Be ALIVE while you are alive.

7. Surround yourself with what you love, whether it's family, pets, keepsakes, music, plants, hobbies, whatever. Your home is your refuge.

8. Cherish your health: If it is good, preserve it. If it is unstable, improve it. If it is beyond what you can improve, get help.

9. Don't take guilt trips. Take a trip to the mall, to the next county, to a foreign country, but NOT to where the guilt is.

10. Tell the people you love that you love them, at every opportunity.

AND ALWAYS REMEMBER:

Life is not measured by the number of breaths we take,
but by the moments that take our breath away.

Have a Great Day!

After two of the stronger months for sales in the last year, Fairfield is now only trailing 2008 by 21%. June and July home closings are bringing us back from trailing by up to forty percent earlier in the year. Selling prices seemed to have stablized at 10-15% below last year.

The Fed Stimulus programs now seem to be having an impact. First Time Home Buyers only have till December 1st to close on a home to be eligible for the $8,000 Tax Credit program.

The rebound is being driven by home sales under $1 Million. The highend segment is still experiencing the brunt of the slowdown. Home Sales over $1 Million are running 28% behind last year and 60% behind 2007.

For homes over $3 Million, we only have 2 homes sold so far this year. Compare this to 12 at this point in 2007.

Keep your fingers crossed the rebound continues!

Mike Tetreau recognized as Tops in Sales

Mike Tetreau was recently named to the company's Chairman's Elite Club by William Raveis Real Estate CEO and Chairman William Raveis. The club is reserved for real estate sales professionals who have achieved over $9 million in real estate sales in 2008. Tetreau and his team were one of the top two sales teams for the Raveis Southport Office.

Tetreau was singled out for recognition from among 1,900 William Raveis sales associates in 59 offices throughout Connecticut, Massachusetts and Rhode Island.

"All of our sales associates are stars, and the Chairman's Elite Club is the ultimate expression of that," Raveis commented. "We're proud to honor this group of top-producing real estate professionals for their consistently superior achievement."

Tetreau has more than 15 years of experience in the real estate industry. He holds the designations of CRS, ABR and GRI and has been promoted to Sales Vice President for his past achievements.

Mike and his Dad - Fern "Coach" Tetreau - started to Tetreau Real Estate Group to bring a measurably better level of service to their clients. A Team Motto of "Our Business is helping friends and clients every day," helps set the standard and values for the Tetreau Real Estate Group. Mike Tetreau and his team have the market knowledge and expertise to deliver on that promise.

The Tetreau Real Estate Group has closed over 400 transactions and won numerous awards. The Tetreau Team is one of the top two sales teams in the Southport Office. Members of the Team include Fern Tetreau, Susan Tortora, Kathy Niznansky and Liz Stiles. Tetreau has served as President of the Greater Fairfield Board of Realtors and was selected as 2007 Realtor of the Year by the Greater Fairfield Board of Realtors. In addition, the Tetreau Real Estate Group has the respect of its neighbors, with Tetreau being elected to the Town Planning and Zoning Commission and most recently elected to serve on the Fairfield Board of Finance. For more information, call 203-520-8318 or e-mail mike@tetreau.com

William Raveis Real Estate, Mortgage & Insurance is one of the top companies in the nation. It is rated as the #1 family-owned real estate firm in New England, the #2 family-owned real estate company in the United States and #12 out of 100,000 real estate firms nationwide. The innovative company is nationally recognized as an industry leader and is dedicated to providing an unparalleled real estate experience to its customers. Since 1974, the firm's 2,100 highly trained sales professionals have been dedicated to strengthening their position as industry leaders in technology, marketing and REALTOR^® education. The company has 63 offices, including two affiliates, in Connecticut, Massachusetts and Rhode Island. Future plans entail expansion into New York, Vermont, New Hampshire and Maine.