A Little History
In the late 1990s real estate values begin to increase at an unexpected pace. In response to the healthy market, lenders eased their credit guidelines. Mortgage money was plentiful. Default rates on mortgages were minimal. Home values continued to rise and lenders perceived little or no risk to their collateral. Borrowers with adjustable rate mortgages could easily refinance if faced with an interest rate adjustment. As the party continued, new lenders entered the market to capitalize on the opportunity. And as competition among lenders increased, credit guidelines eased even more.
The First Signs of Change
In mid-2005 the real estate market was peaking. A record number of Americans owned homes, and millions were supplementing their income by speculating in the real estate market. The shift began slowly at first. Alan Greenspan, expressing concern about the U.S. Housing market said that, “at a minimum, there’s a little froth in the housing market, and it’s hard not to see that there are a lot of local bubbles.” The media picked up on the phrase, and before long we were all hearing about the real estate bubble. Could the meteoric rise in home prices last? Would real estate values slowly stabilize? Or would the bubble burst?
The Big Shift
Behind the scenes lenders were becoming concerned. The balance in the real estate market was changing. Homes were no longer selling in a matter of days and inventory levels were increasing. Soon, credit guidelines were tightening. As lenders began to withdraw from the market the real estate market slowed further. And as the real estate market slowed further, lenders tightened more, many shutting their doors and withdrawing entirely.
A Whole New World
As 2008 gets underway, signs of stability are showing. The credit market has fully reinvented itself. The days of creative financing are past, and ripples from the mortgage market have spread throughout the entire financial world. Credit issues, once easy to work around, must now be addressed and overcome. Now is the time to become pro-active. Now is the time to insure that your credit is as good as it can possibly be. Now is the time to begin your credit repair effort.
Getting Started
What are the facts? Where are you now? Get copies of all three of your credit reports. It is essential to identify every item on your credit that may be having a negative impact on your credit scores. Knowledge is power. Successful credit repair is all about the details. I strongly suggest that you set aside enough time to take a close look at your reports. The investment of your time in this project will pay dividends beyond your imagination.
Give Yourself the Benefit of the Doubt
Credit reports are full of errors. You should examine your report with a critical eye. If you see anything at all that you do not recognize it is important that you question it. It is not enough that an item look familiar. Don’t speed-read your credit report; credit repair requires patience. Do you see late payments? If you are not 100% certain that the information is correct, you should question it. Are their collections? Unless you are in communication with the collector and you have received full and satisfactory proof that they have the legal right to collect the debt, question it! Does it look like derogatory accounts are reporting more than one time? Question them!
A Great Collection Tip
When an account is charged-off, the debt is normally sold to a collector, and just as often, re-sold again. If a collector does not currently own the debt, they have no legal right to report the collection. Most collectors do not bother to cease reporting when they should. When it comes to your credit report, you should not always believe what you see. Remove these obsolete collections and watch your credit scores go up.
Check Those High Credit Limits
Most people know that the relationship between their credit card balances and their high credit limits can have a major effect on their credit score. Did you know that many credit card issuers fail to report the high credit limit properly? Track down any underreported high credit limits and correct them. This type of reporting error may not be as easy to spot as obvious derogatory items, but your patient credit repair effort will pay off.
Charge-off Pointer
The statute of limitation for reporting a charged-off account is seven years plus 180 days from the date of your original default. The date of your default is the date of the first missed payment that led to the charge-off. Collectors cannot restart the clock. Collectors often illegally re-set the clock, and collection accounts may linger for years. If you see a collection on your report for an account that went into default more than seven years plus 180 days ago, question it! It will be removed.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
About the Author:Jim Kemish, a nationally recognized credit repair and restoration expert, is the president and founder of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida.
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Frequently Asked Questions
Please tell me i'm not crazy
By: sandyrae | 19-08-2008
i was told my daughter at a young age had night terrors. well, shes 4 now and from the min she wakes up shes zooming with energy, her mood swings are horrible. shes mean and nasty when shes not hypers and cries off and on through the night. its making it very hard to handle her. we have a hard time sleeping and no ones every happy anymore. i dont know what is wrong, and i dont know what to do. she cried tonight when i asked her why she got so mean and she cried and said i dont know. i need advice. i'm pretty sure this is it, but i might think its a medication issues. she starts preschool next month and i dont want this happeneing there. any input?
Lien on co-owned home from 2002 Judgment?
By: APhoenixRisen | 18-08-2008
In 1998 one of my credit cards went delinquent. In 2002 I lived in Colorado but the company got a judgment in NY. Now I live in Alabama and got a call from a collector threatening to put a lien on the home I co-own with my disabled son. Can they do this? How can I protect our home? I am under-employed and my son is permanently disabled. Isn't there some sort of exemption or way I could protect my our home? How long will there be a danger to our home from this 2002 judgment?
Mental disorder?
By: awassn | 18-08-2008
My best friend in the last couple of months (about 2) has been acting very strange. Her behavior has become irrational and impulsive. She will insult people and not realize it. She acts as if she is intoxicated when she is not. It is confirmed that she is NOT on any form of drugs. She will talk nonsense, and has become almost slutty around men. she picked up 9 men in one weekend. I believe she may have something going on mentally but I am not sure. Whats wrong with my friend?
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Is there a small DC powered with inverter to AC , self contained , weather proof unit on the market?
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I have heard several stories about people getting carts full of groceries for just pennies or even getting money back! How do they do it? My family is on a very tight budget and any advice will help. Thank you.
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