Monday, August 9, 2010

The ABC’s of Repairing Your Credit Score...

The ABC’s of Repairing Your Credit Score…

by Dr. Tony Bellenger

We all have heard credit score terms from credit repair companies and other institutions that can be very deceptive and confusing. Such phrases include New Empirca score, Fico score, Beacon score, credit score, Experian score, Equifax score, and Trans Union score. Don’t be alarmed. Many wonder how you can get three different credit scores at one business location, then when you travel to another business location in the same day and have three totally different credit scores that can differ by as much as fifty points.

Listen to this, I bet you didn’t know that there are approximately eight different scoring variations because the credit bureaus don’t actually score you. Here’s a little know secret all your credit scores come out of San Rafael, California, not the credit bureaus themselves.

Now do you need or just want a higher credit score? You may have some of the following:

1. Negative trade lines that appear in your credit report.

2. Late payments.

3. Charge offs.

4. Collections.

5. Foreclosures.

6. Repossessions.

7. You may also have too many inquires.

8. A.K.A.’s,

9. Addresses, or places of employment that may be injuring your credit score.

If you have any of the above, there is light at the end of the tunnel. The good news is it is absolutely legal to remove derogatory or negative items off your credit report and have credit score repair. The following guidelines come into play, the account must be obsolete, outdated, misleading, erroneous, the dates opened on the account are incorrect, the dates closed on the account are incorrect, or if you can not recall the account as well as many other reasons.

With that being said, here’s a few improvements that I feel should be in the credit model. For example; many of us pay on accounts every month that never appear on our credit report, such as phone bills, car insurance, medical insurance, gym membership, rent, and home utilities. Do those accounts show up on your credit report? Nope ! Then your real concern should be improving the key components of your credit score.

Now here’s where the rubber meets the road, you have the legal right to dispute and remove negative items off your credit report to help increase your score. This should only be initiated once you learn the appropriate methods in disputing and removing of any negative items off the credit report.

You should have in place the following before you start any credit repair on your own:

1. You will need a calendar to time your letters, disputes, and continual correspondence.

2. You will need the addresses of the credit bureaus, subsidiary bureaus, creditors, collectors, your State Attorney General, Federal Trade Commission, and possibly a local attorney that you can cc (carbon copy) all your correspondence that you have documented.

3. You will need certified mail as well as a notary.

4. You need a system that will allow you to track what items have been taken off the credit report so that you don’t continually dispute items that are removed. Please be aware that if you fail to do this the credit bureaus may consider and declare all your letters to be frivolous in nature and they will legally reserve the right to not investigate or not to change your credit.

5. You should be familiar with both the federal and your state’s credit laws.

Once you have these in place be sure to get familiar with the credit laws as noted in step five. Here are a few things to look out for:

a. When viewing credit restoration laws it is important to decipher whether the law is pertaining to a credit report or the legality of a debt. It is a myth that all consumer debt is owed for seven years. Almost all debt is governed by state statutes and not by federal law. Check the laws within your own state that govern the legalities of debt before you start any credit improvement.

b. Fair Credit Reporting Act (FCRA) - The Fair Credit Reporting Act was enacted
approximately 30 years ago and has had numerous revisions over that time period. FCRA benefits the consumer by putting time restrictions on creditors and credit bureaus to respond to any disputes made by a consumer. If the creditor’s or the credit bureaus fail to respond within the allotted time frame then the credit bureaus must change the credit information in accordance with the consumer’s disputes. This is the basic principal that simple credit repair companies use to fix your credit – “Not very effective in today’s world!” The FCRA also grants creditors and credit bureaus certain conditions to request additional investigative time periods into a consumers dispute.
Furthermore, the FCRA also gives the credit bureaus the option to permanently verify a dispute and never remove it if certain method
s weren’t procedurally done by the party disputing the credit item. The FCRA also covers fraud alerts, the statutes of items in dispute for consumer reports, in addition to civil liability of damages for both parties.

c. Fair and Accurate Credit Transaction Act (FACT Act) came into law several years ago. The FACT Act allows the consumer to receive a credit report annually free of charge.
These will not contain credit scores and maybe a little more difficult to decipher. The FACT Act covers rules of “prevention of reinsertion, blocking information due to identity theft, statute of limitations, and credit wholesaler requirements, etc…

d. Uniform Commercial Code Laws (UCC Laws) - These are the laws that govern
transactions that are paid by personal or corporate check. The UCC laws also govern the differences and superseding definitions between contracts and legal agreements.
There are many state adaptations and variations to the federal law which cover addendums and legal stipulations when satisfying a debt.

e. Fair Debt Collection Practices Act (FDCPA) - Is a law that contains procedural rules for third party collectors, consumers and the penalties that may be levied against either party. The FDCPA governs how many times a collector can call a consumer, a consumer’s place of employment, family members, friends and neighbors. The FDCPA also covers the rules of the assigning of a debt. The FDCPA also notes when state law can override federal law when it comes to collection or credit disputes. The FDCPA covers the rules that a collection company cannot use abusive language, make false threats, and much more.

f. Equal Credit Protection Act (ECPA) - Contains rules governing when a creditor or collector can report your trade line to the credit bureaus. It also covers if a creditor is obligated or not obligated to report borrowers, co-borrowers, and authorized users on an individual account to the credit bureaus. The ECPA also protects against discrimination for age, race, gender, and religion.

There are so many credit laws that affect positively and negatively both the consumer and creditor. Therefore, when viewing credit laws it is important for you to determine whether the law is pertaining to a credit report or the legality of a debt. In addition, it is a myth that all consumer debt is owed for seven years. Almost all debt is governed by state statutes and not by federal law. Check the laws within your own state that govern the legalities of debt.

One final tip for the do it yourself credit repair person it’s recommended that your balances should be kept preferably under 20 percent, but at a maximum of no more than 50 percent your available credit. It is understandable if you can’t do this right away. Here’s another helpful tip, start with one of your lower balance cards and get this to under the 20 percent then work on the next card.

P.S. Sign up to receive your free "How to Improve Your Credit in 90 Days Without Spending a Dime" report and to get the free updates go to my blog

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Sunday, June 8, 2008


by Dr. Tony Bellenger "The Money Doctor"

So, your house is in foreclosure… Now what? Try to look at the situation without attaching your emotions. From a strictly business viewpoint, you can more successfully analyze which option might best suit your needs and desires and move toward resolving your financial difficulty. One very important thing to remember: Time is of the essence, so take quick action in order to allow yourself enough time to complete the chosen process. There are more than 50 techniques a person can use to save their home from foreclosure. Here 's just a few of them below:

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information.

2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.

3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level if they qualify.

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.

6. Partial Claim – A loan from the FHA for a second loan to include back payments, costs and fees.

You should be aware of special rights which you may have! In January of 2001 The U.S. Department of Housing and Urban Development (HUD) issued guidelines mandating that all borrowers with FHA loans that fall under HUD regulations be informed of their rights to mortgage loan work out programs. See HUD ML2002-12. The Veteran's Administration (VA) also has a great many entitlements that can keep a Veteran out of foreclosure. You may be entitled to federally mandated FHA/HUD or VA loss mitigation assistance from your lender to stop foreclosure by:

  • Reducing your interest rate
  • Extending the time to pay back of your loan
  • Putting your past due payments in to the balance of your loan
  • Putting the past due payments on to the end of your loan
  • Selling your house for less than you owe the bank
  • Giving the house to the bank or the government in exchange for what you owe

NOW get more information at our free stop foreclosures email link below to find out if you qualify.

7. Deed in Lieu of ForeclosureGive the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payments and taxes must be current. Most loan applications ask if this has ever happened.

8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy preparer (many attorneys use them to fill out your forms and then add their own fees) or a bankruptcy attorney.

Chapter 7 (Liquidation) To completely settle personal debt.

Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3 – 5 years.

Chapter 11 (Business Reorganization) A business debt solution.

Means test may be required If your income is above the median for your area and you file for bankruptcy, the law requires you be subjected to a means test to see if you might have the spare cash for a repayment plan. If you don't, you get to file for Chapter 7 liquidation, which erases most of your unsecured debt, such as credit card and medical bills.

If the means test says you can afford to pay some of your debts, though, you're shunted into a Chapter 13 repayment plan.

Filers must attend mandatory credit counseling sessions that do little good according to the credit counselors.

Increased basic filing costs by about $200, as well as the time it takes for a preparers/attorneys to prepare a case, by at least 50%, making the process more expensive for people who already are broke.

The bankruptcy reform act as written requires prioritizing credit card companies ahead of the duties of one's faith as per the Littlefield decision.

9. SaleHomeowner may sell the home without lender approval for a conventional home sale. If the property has equity (money left over after all loans and monetary encumbrances are paid), the homeowner will get cash from the sale. At the other end of the spectrum, a short sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your real estate professional if what is owed is more than the property’s value.

10. Short Sale Negotiated settlement" or "short pay" occurs when a Lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure. If the property is worth less than the amount owed on the loan, then even if the Lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will do better if they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later...

11. Debt Validation -- Ask the Lender to show proof of the debt. Lender has 30 days to show proof or the debt must be removed from your credit report along with all negative remarks.

By now, you may want to learn more about how you can start your own" Debt Negotiations Business" and in the process improve your own credit as well as save your home or others from foreclosure, then email Dr. Tony Bellenger at

PS... Sign up to receive your free "How To Save a Home From Foreclosure" as well as your free "How to Improve Your Credit in 90 Days Without Spending a Dime" reports. Also get your free updates by emailing Dr. Tony Bellenger at

By-the-way, by now, you may be wondering if you may contact Tony Bellenger (The Money Doctor) for seminars, speaking engagements, investor trainings, personal consultations, business financing, and hard money loans? The answer is yes, email your requests to him now, at

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By Tony Bellenger "The Money Doctor™