Credit counseling gets you back on track

When you are trying to get credit help for your unsecured debt, you'll often turn to a credit counseling service. These firms help you with credit card debt that has spiraled out of control, and they can help advise you on setting up a workable budget.

Are you behind on student loans? Your automobile or truck payment late? Medical bills unpaid? Is the electric company about to turn out the lights?

It could be that you are needing the valued services on a good credit counseling service. We've written about this on our main web site: http://www.findhow2.com .

We urge you to visit that site and learn how you can get the help you need to get out of debt and fix your credit report. Sometimes you simply can't get it done yourself. We understand, so quit beating yourself up. Just start the process of learning what to do next and getting the credit help you need.

The main things a good credit counseling service can offer is the advice on managing money and keeping up with paying your debts. You might even have access to free or low-cost classes on managing your money. This could be the best thing you can take away from credit counseling, and will enable you to deal with similar financial difficulties in the future.

Can Bankruptcy Boost Your Credit Score?

Here's a unique twist on credit scores found at SmartMoney.com:

"The decision of whether to file for bankruptcy protection is
not an easy one. Among the numerous concerns, one that is
typically front and center is the worry that your credit rating
will be so damaged that securing a loan — even at a lousy rate
— will be darn near impossible. "

True. Their editors have hit the credit score problem squarely on the head. We've been preaching that one needs to carefully protect their credit rating for years on this blog. But the following caught us by surprise, and we'd like to share this with our readers:

"But here's some surprising news: In many cases, the damage done
to one's credit score isn't nearly as bad as expected. Over the
long run, obtaining a score high enough to make you eligible
for very competitive rates isn't out of the question. "

That's good news when it comes to bad credit might not be ALL bad! You can read more of this interesting article at:

http://www.smartmoney.com/debt/advice/index.cfm?story=boostscore

Fighting Foreclosure With New HomeStay Program

It's about time the two biggest government-sponsored loan
entities in America actually heard the pleas from cash-strapped
homeowners and did something worthwhile to ease their pain.

Fannie Mae unveiled a new program called "HomeStay,"
offering brand new options so that lenders can help subprime
borrowers wiggle out of high-interest adjustable-rate mortgages
or other onerous home loans, and into loans that are
"consumer-friendly" to save their home from foreclosure.

President and CEO Daniel Mudd said Fannie Mae plans to
stretch the term on subprime loans up to 40 years from the
current maximum of 30 years — which is anticipated to help
reduce monthly payments for borrowers by around 5 percent. Five
percent is not much, but it's better than a sharp stick in the
eye.

Richard Syron, Freddie Mac's chairman and chief executive,
said his company will be rolling out "more consumer-friendly
subprime products" to provide stable financing by midsummer
2007.

Freddie Mac's new products are reported to include 30-year
and possibly 40-year fixed-rate mortgages as well as
adjustable-rate mortgages with longer fixed-rate periods.

More on "HomeStay" can be found at: FannieMae.com -- HomeStay Announcement

In the press release, we read: "Fannie Mae has a history of working with lenders to serve families who don't have perfect financial profiles. 'Subprime' is, after all, simply the description of a borrower who doesn't have perfect credit."

So, the reason for out interest in this topic is clear: those who do not have a good credit score to show their lender might get screwed by getting stuck into an adjustable rate mortgage that very likely could rise to the point where the mortgage payments are simply unaffordable, and the home, equity and the homeowners sweat-equity in his or her place is lost forever.

We look forward to seeing Freddie Mac and Fannie Mae acting like a benevolent aunt and uncle to calm millions of distressed homeowners and worried housing investors in this country with this and similar actions.

Further, I expect scandals to erupt over this "loose-money" con that was conducted within the usually staid and stuffy world of mortgage banking. May the guilty parties be found out and spend some quality time under arrest.

Foreclosures may hammer credit scores

There's foreclosure madness in the air.Neighborhoods are falling victim to foreclosure rates not seen
in years.People are not only losing their houses. They are losing the
investment they've made in their neighborhoods, in their
communities and schools and churches and businesses.There has been a tidal wave of foreclosures across the nation
as ARM's -- adjustable rate mortgages -- are readjusting as
lenders hike interest rates, and house payments are stretching
household budgets past the breaking point.The houses are going back to the bank in record numbers.USAToday recently reported that homes entering foreclosure hit
a record number in the final quarter of 2006.2007 doesn't seem to be faring any better.There's no quick fix, and the government, in true
Katrina-disaster-style-response, has been loathe to be
proactive. Foreclosures rise, and cities fall apart. I warned of the dangers of relying on interest-only loans over
the past two years, the the short-term benefits seemed sweet:
buy more house than you could really afford to buy, and pay
only a small amount at the beginning. The fairytale was that
by the time the interest rates reset, the housing market would
have pushed home prices up 15-20%, and the homeowners credit
would have magically improved, and a simple mortgage refi could
rescue the occupants and save the day.But that's far from what's actually happened.Burgeoning personal debt levels have stymied the ability to
borrow more. Now that home equity seems to be evaporating as
the housing bubble melts down, there's little wiggle-room to
dodge economic catastrophe.Need proof? Here's what USAToday reported: One Georgia
Institute of Technology associate professor of city and
regional planning, Dan Immergluck, said: "The foreclosure
trends are definitely acelerating in middle-income suburban
communities."Later, he's quoted as saying that the homes surrounding a
foreclosed-upon home drop an average of 1.5%. Each. So if you
have a neighborhood of $300,000 homes, and the home next door
goes back to the bank via Dr. Foreclosure, those home EACH lose
approximately $4,500.Start doing the math, and you'll start to see the tsunami
swells forming off on the horizon.The cluprit are the exotic loans marketed over the past 6-7
years. ARM's and interest-only loans. The hype is forgotten
when the bill comes due. More and more homeowners will find
themselves upside down and in over their heads as their home
payments strip their ability to pay.In the end, their credit will suffer. As they accept the fact
that they will lose their home to foreclosure, they will cease
being a homeowner and they will once again join the ranks of
renters. It is interesting to see large rental development
projects being built in major urban areas. The banks see the
need for these rentals because they helped create the new boom
in homeowners-turned-renters.And, once the credit reports of those former homeowners have
been trashed and ruined and their credit scores are hammered
down to new lows, it may take years to get through this mess.Yes, indeed, foreclosure madness wafts in the air. It was
avoidable once. But not now.

Some free credit reports not free

Unscrupulous companies advertise “free credit reports” these days that aren’t really free.
Sometimes these firms require that you must purchase credit monitoring or other services they offer in order to obtain your free report. Or you are given a free 30-day trial of such-and-such credit monitoring service, then you get charged for it every month thereafter, unless you call to cancel the service.
In our opinion, that's just not fair. Consumers are entitled under federal laws to one free credit report per year from each of the three credit reporting agencies: Equifax, Experian and TransUnion.
Most importantly to keep in mind, there is only ONE official web site to access these free reports: www.annualcreditreport.com .
Or, you still have the option to call the central request phone number: toll free 877-322-8228.
Consumers are cautioned that a simple misspelling of the web site address or conducting an Internet search for phrases such as “free credit report”, “free credit history” or “free credit rating” could take them to a different web site that charges for credit services available to them for free (like the free information you'll find on this site, or on our sister site, http://www.FindHow2.com) .

Following is the current contact information of the three major credit bureaus:

Equifax Credit Information Services, Inc.
P.O. Box 740241
Atlanta, Georgia 30374
Toll Free: 800-685-1111

Experian National Consumer Assistance Center
P.O. Box 2002
Allen, Texas 75013
General inquiries: 888-397-3742
Additional free credit report: 866-200-6020www.experian.com/freestate www.experian.com/reportaccess (if you have been denied credit within the past 60 days)

TransUnion Consumer Relations
P.O. Box 2000
Chester, Pennsylvania 19022
General inquiries: 800-916-8800
Remember, when you are requesting your credit report, you will be asked to provide your full name, current address, your Social Security number, your date of birth, as well as your most recent address.
When requesting your credit report online, you may need to answer some specific questions that only you know, such as a previous mortgage amount.

Greed at root of risky lending practices

An interesting web article published recently at SeaCoastOnline.com caught my eye today: "Greed is root of mortgage crisis issue." It was written by Joe Adamaitis, president of Direct Mortgage, which offices in Portsmouth, Naugatuck, Conn. and Bradenton, Fla. Read the full article here:
http://www.seacoastonline.com/news/03212007/business-b-subprime.column.html
His premise: sub-prime lenders were greedy and took advantage of people with poor credit scores.
He writes: "If we look carefully at the problems linked to this meltdown, we might begin at the root of all fiascoes -- "greed." Sure the (lending) guidelines were loose, but so are the laws that monitor mortgage marketing and advertising to the consumer. Consumers are fed 'bait and switch' ads on a daily basis."
It is important to hear this coming from a veteran in the mortgage business.
Adamaitis continues: "One other issue that can take blame for the subprime problem is today's credit scoring models. I will say that the credit industry has it's own share of blame because the 'scoring formulas' used to rate a borrower are far from as accurate as one would like to believe."
Well said! We too believe that the people who collect and report credit information need to be held to a higher standard, and the current system needs a tune-up. Those with "bad" credit -- as determined by scoring models -- were almost forced to accept higher risk loan programs to get the home loan they were needing.
According to Adamaitis' article: "The inaccuracy pushed many borrowers away from getting conventional financing and into the subprime market. Trying to correct a credit score is virtually impossible for an individual and, therefore, has created an entirely new business."
And he leaves the reader with one chilling warning: "If you're looking for the next subprime-type fiasco, watch the number of credit repair companies that pop up."
It's bad news, but don't blame the messenger. The lending system, perhaps the whole housing bubble, was obviously driven by greed, so Joe Adamaitis' article hits the nail on the head squarely and his observations need to be considered by those who are involved in the industry, as well as consumers who are affected by the fallout of the sub-prime bankruptcies and home foreclosures.
For those working diligently to fix their own credit report, this type of article underscores the need for constant monitoring of not only one's credit report, but also the influences in the markets which lead people down primrose paths to financial disaster.
You CAN fix your own credit and you CAN reduce debt and you CAN build a financial future others will envy, but you MUST be aware that there are constant dangers, and you MUST take steps to remain cautious about things "too good to be true." Again, we recommend that you read and pass along Joe Adamaitis' article link listed above. It could help educate those you love.

Good Credit = Organization + Good Habits + Time

Lenders are now telling home loan applicants: Pay down your debt and improve your credit score. Refinancing is getting more difficult. Getting a mortgage now is a lot harder than it was just a month ago. That includes borrowers with marginal credit who will have to come up with larger down payments and cash-strapped borrowers who are trying to refinance their adjustable-rate mortgages.
"The source of the trouble is the same part of the mortgage industry that helped drive the biggest housing boom in history over the past five years, a corner of the market called "subprime lending" that offered financing to those who otherwise couldn't get a home loan," according to a very telling story in The Star Tribune.
Read the whole article at The Star Tribune
Our message here for more than a year is for people to protect themselves, to pay down personal and business debt, and work hard to improve their credit report.
Fixing your credit report is simple when you follow our free tips at FindHow2.com. There, we've assembled some of the best reports and articles on how to proceed and get your finances in order.
It will pay big dividends to follow our authors' free advice and shape up your spending and saving habits. In summary, the best plan of action to get a better credit score is this: Good Credit = Organization + Good Habits + Time. Organize your bills and your debt obligations. Practice paying your bills on time, all the time. And by doing this regularly, time will come to your aid and help improve your credit.
Try it. You'll be happily surprised at how well these simple free tips work!