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More Evidence that Credit Scores are Meaningless

September 29, 2010 By Christine View Comments

Yesterday I found an article about credit scores and mortgage rates on MSNBC. And the headline was actually depressing. It’s says:

“Great credit may not get you a great mortgage
Rates for excellent rating not much better, if you can actually get a loan”

The author, Eileen Connell, makes her point in the first three paragraphs of the article:

“The mortgage loan interest rates offered to borrowers with stellar FICO scores aren’t much lower than the rates offered to those with a middle-of-the-road 720 score these days.
That means that efforts to drive up a credit score to lofty heights aren’t likely to produce substantial savings over the life of the loan.

The real savings comes from getting your score to that magic line of 720.”

Later in the article, she makes some other good points:

“But if you’re already at 720, the benefits start to dwindle as you improve your score further. There are still incremental rate reductions for borrowers in the higher range, but they won’t see the same level of drop-off that improvements lower on the scale can produce.

Part of the reason for so little change for the top borrowers is that interest rates are so low overall. “There’s not that much room right now between the rates,” noted Diane Winland, a financial planner with Financial Finesse, based in Manhattan Beach, Calif.

Another potential factor is that consumers with “perfect” credit scores tend to be less profitable for banks than consumers with a few dings on their histories, who pay higher rates and often penalties like late fees.

Consumers with great scores by and large avoid credit, explained John Ulzheimer, president of consumer education for the website Credit.com. “They have credit, they have had credit for a very long time, but they’re definitely a small-time user of credit. Which means that they’re not very profitable.”

Christine here: I think this article makes it clear that credit, especially lending for mortgages, is still difficult to get for any borrower and if you’re anywhere between 620 and 720, forget about it unless you do some credit repair first.

Click the link at the top of this page for professional help or your can do it yourself using the tools on this blog.

DISCLAIMER:
****CHRISTINE SPRINGER IS NOT A LICENSED ATTORNEY OR FINANCIAL ADVISOR. THIS BLOG IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY OR FINANCIAL ADVISOR BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****

Filed Under: Credit Score Tagged With: credit scores worthless;, do it yourself credit repair; christine springer; DIY credit repair; have good credit

DIY Step 2: Scrutinize Your Reports and Keep Good Records

August 2, 2010 By Christine View Comments

When I did my own DIY credit investigations several years ago, I found it useful to useful to set up a file folder with the name of the credit bureau and the date of the inquiry so that I could track patterns in the reports. (I’ve found this type of recordkeeping useful in other areas of my professional life.)

If you ultimately wind up getting nowhere with specific items on your report, it could be very useful to be able to demonstrate your efforts should you have to escalate your efforts to get something removed.

I suggest you make a photocopy of each report so that you can write on it. I’d suggest using highlighters. Go through each report individually and look for inaccuracies throughout the report.

For example, if your name is misspelled, highlight that. If your employment history or address history is incorrect, highlight that. Especially go through all the account information and highlight areas that are inaccurate. Even if you think part of the entry is legitimate, if part of the information is inaccurate, you could get the entire entry deleted if it cannot be verified.

You’ll also want to go through the inquiries to see who’s been reviewing your credit reports and highlight anything that looks unfamiliar.

These highlighted marks will guide you for Step 3 of the DIY process and make your letter writing easier.

DISCLAIMER:
****CHRISTINE SPRINGER IS NOT A LICENSED ATTORNEY OR FINANCIAL ADVISOR. THIS BLOG IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY OR FINANCIAL ADVISOR BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****

Filed Under: credit repair Tagged With: DIY Credit Repair, do it yourself credit repair; christine springer; DIY credit repair; have good credit

Get Your Finances Under Control Before You Repair Your Credit

July 28, 2010 By Christine View Comments

I’ve personally been down the DIY credit repair route before and I learned a lesson: it doesn’t do any good to fix your credit if the underlying issues relating to debt and overspending are not addressed.

Simply put, it doesn’t do you any good to start fixing your credit unless your financial situation is under control. I think, as Americans, we need to be honest with ourselves about our finances. We’ve been overspending for years and now that things have become economically challenging, many of us have been caught in a tough financial position.

I think this step is addressed by having a plan to deal with how you will pay your bills in the future. I’m not a financial advisor, but there are plenty of people out there who are and can help you come up with a get-out-of debt plan. Some people advocate budgets; others have other systems for dealing with how to pay bills. I’m sure we’ll spend some time talking about this more in depth in future posts, but I wanted to mention it before we start talking about how to repair your credit.

The point is, come up with something that is workable for you, because if you don’t pay your bills, your credit repair efforts will be a waste of time and money.

DISCLAIMER:
****CHRISTINE SPRINGER IS NOT A LICENSED ATTORNEY OR FINANCIAL ADVISOR. THIS BLOG IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY OR FINANCIAL ADVISOR BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****

Filed Under: credit repair Tagged With: do it yourself credit repair; christine springer; DIY credit repair; have good credit

Let Me Introduce Myself

July 26, 2010 By Christine View Comments

For those of you who are new to this site, my name is Christine Springer. I am the newest contributor to this blog on credit. I’ve spent the last year writing the blog at www.foreclosureindustry.com .

I consider myself a paralegal and have been in the legal field for the last fifteen years or so, so most of what I write is from a legal perspective. I am personally interested in figuring out how to help people move on with their lives and having a better credit score seems like a good place to start. I’ll be exploring this issue, as well as others, here on this blog, so I hope you’ll subscribe and be a part of the discussion.

You can contact me at Christine@desertedgelegal.com with any questions. Please remember, I am not a licensed attorney and cannot give legal advice. I am also not a financial planner and don’t give financial advice professionally either. Please consult with professionals in these fields if you need legal or financial advice.

Filed Under: General News Tagged With: do it yourself credit repair; christine springer; DIY credit repair; have good credit