Karen Church

Karen Church, your "Go To" gal at RE/MAX Integrity at www.eugenehomesgal.com discusses the question of "Dealing with Credit Challenges.".

Unfortunately, a person with a bad credit is often in this position because he or she lacks the discipline to pay bills on time. Of course, there are exceptions where unforeseen circumstances come into play, such as health complications, or loss of employment.

There are a few things that may be able to bring up your score so that you can secure a better interest rate on your mortgage loan.

Example 1: Distribute debt from revolving credit.

Our borrower, Mr. Jones, has a credit score of 664. He has five credit cards, but his Visa account is almost maxed out. His other four credit cards have relatively low balances. Mr. Jones moves par of the debt from the Visa account to the other major credit card accounts, thus distributing the debt more evenly over ht five cards. This changes the ratio of debt to available credit (which has a 30% impact on the overall credit score), and Mr. Jones successfully raises his credit score by 20 points with very little effort.

Example 2: Transfer outstanding balances to new accounts.

Our borrower, Mr. Smith, has only two credit cards, but both are pushing the limit of available credit. Mr. Smith opens two new credit card accounts, each with a credit limit of $5000. He transfers part of his existing balances to he new accounts. While he has acquired two new cards, that have no established history, the greater impact is the change in the ratio of debt to available credit.

Ultimately experts say that is the best to have one or three major credit cards, and no more than that. You should keep your balances as low as possible. If you have a credit account with a zero balance, do not close the account.

Instead, make a small purchase to the card shows up as an active account on your credit report and you will be awarded points for your long term credit history.

This information has been obtained through the Real Estate Lending Group. Be sure to contact me if you need further assistance. If you wish to get a free credit report go to www.annualcreditreport.com

Stay tuned for Part 9: Dos and Don'ts During the Loan Process.

Karen Church, your "Go To" gal at RE/MAX Integrity at www.eugenehomesgal.com discusses the question of "What if I have no Credit?

On occasion, a borrow will not have enough credit references to obtain the loan they wish to secure. If this is the case for you, start by opening small lines of credit that report to all three major CRA's, and make purchases that can be paid off easily. If you do not already have a checking or saving account, open one. Your bank or credit union may be able to provide you with a credit card account once you have established a history with them as a customer.

It is also wise to start saving money for the down payment on your home. The lender will look at your application more favorably when you are able to come to the table with a 20% down payment. Bear in mind, there are certain loan programs available that permit a percentage of gift money for down payment, which can come from a relative, or even the person selling the home.

This information is has been obtained through the Real Estate Lending Group. Be sure to contact me if you need further assistance.

Stay tuned for Part 8: Dealing with Credit Challenges

Karen Church, your "Go To" gal at RE/MAX Integrity at www.eugenehomesgal.com discusses the question of "Disputing Errors on Your Credit Report?"

If you are in the process of reviewing your credit report, the first thing to do is make sure that the information contained within the report is correct. In June 2004, The U.S. Public Interest Research Group published the results of a survey it conducted involving 200 adults in 30 states to test the validity of credit reporting. Their finds were as follows:

25% of the credit reports contained errors serious enough to result in the denial of credit.

79% of the credit reports contained mistakes of some kind.

54% of the credit reports contained personal demographic information that was misspelled, long outdated, belonged to a stranger, or was otherwise incorrect.

30% of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.(SOURCE: US Public Interest Group Research: One I Four Credit Reports Contains Errors Serious Enough to Wreck Havok For Consumers, US PIRG Press release, 06/17/04 http://uspirg.org/uspirgnewsroom.asp?id22=13650&id3=USPRIGnewsroom)

If you find that you have errors on your credit report, follow this procedure to correct those errors:

1. Make a copy of the report and circle the item(s) you are questioning. Keep your original copy for your own records.
2. Prepare a letter to the CRA that provided you with the report in question, and request to have the erroneous items(s) removed or corrected. If you have proof of payment for an item in question, include a copy of that documentation.
3. Prepare a letter to the creditor reporting the problem, especially if you feel you are a victim of fraud or identity theft. Inform the creditor that you are disputing an error reported to the CRA, state why the claim is inaccurate, and include any relevant documentation to prove your point.
4. Send your correspondence via certified mail.

You should receive a response from the CRA within 30-45 days. If the error has been corrected, they will send you a fresh copy of your credit report at no charge to show you that the item has been removed or corrected.

If you cannot have a disputed item removed, you have the right to include your side of the story on the credit report. Your statement should be a concise explanation (100 words or less) as to why you are challenging the item in question. From that point on, this notation will be included in your credit report as long as the item in question remains on your report.

If you need guidance, please feel free to call me. I would be happy to refer you to a lender that can help guide you through this process and even assist you in the "how to's" of raising that credit score. This information is has been obtained through the Real Estate Lending Group.

Stay tuned for Part 7: What if I have No Credit?

Realtor Karen Church, www.eugenehomesgal.com , with RE/MAX Integrity in Eugene, Oregon wants to share the Red Cross List of the symptom differences between a cold and the Swime Flu. Keep this list handy and feel free to forward it to your friends and family.

Difference between Cold and Swine Flu Symptoms

Karen Church, your "Go To" gal at RE/MAX Integrity at www.eugenehomesgal.com discusses the question of "How Does the Underwriter View My Credit Score?"

If you are considering a home purchase, it is in your best interest to make every effort to increase your credit score; especially if you know you have issues you should be dealing with. It is often the case that people are not aware of bad marks on their credit record until they apply for financing for a major purchase such as a home or a car.

As part of the loan process a credit report is run. You can take advantage of the opportunity to get a free credit report from each of the three main CRAs: Equifax, Experian and TransUnion. As a sidebar, you can choose to get the free report for all three bureaus at the same time, so you are aware of what information each bureau has collected on you. Another option is to pull your credit report from one agency and reserve the right to get your free reports from the other two CRAs as you work on improving your credit standing.

It is best to have the full overview up front. Different CRAs have different methods of calculating these scores, and may also have different information contained within their findings. If additional reports are needed within a 12 month period from any of the three CRAs, the cost is minimal compared to the potential savings that can be realized by an improved credit score. If you pull your own credit report it will not affect your own score as an inquiry.

The underwriter who is making the decision as to whether or not you should get the loan you are asking for will generally look at the scores generated from all three CRAs. Typically the score will not be the same from all three reports. The underwriter will consider the middle score as a barometer.

If you need guidance in beginning this course, please feel free to call me. I would be happy to refer you to a lender that can help guide you through this process and even assist you in the "how to's" of raising that credit score.

Stay tuned for Part 6: Disputing Errors On the Credit Report.