Can you tell me how short selling 3 rental homes will affect our credit? Our scores are 750 currently.  Haven’t found any information on the impact of 3 homes compared to doing just one. Is it true that actual missed payments on the loans is what hurts your credit more then the short sale itself? I currently have offers on all 3 and am about to be 60 days past due on the loans. We have two rentals in AZ (a non-forgiving state) and one in CA.

Just wondering if we should try and make arrangements with the collection dept to lessen the impact on our credit report or does this not even matter? Once it goes to collections, it is done? Do you know that if we do pay on the loans, will this affect the lenders decision to accept the short sale?

Any advice you can give would be great. Thanks so much for your time and expertise.

Gina

————

Hi Gina,

As far as credit scoring goes, a 60 day late is worse than a 30, and a 90 is worse than a 60, and so on; however, the impact that payment arrangements would have on a short sale rejection or approval is entirely up to the investor who owns the loan (i.e. Wells Fargo, Deutsche Bank, etc.). 

One way to find out whether or not the lender would agree to a short sale while receiving timely payments would be to read the investor guidelines for workouts.  This can be accomplished by writing to the servicing lender requesting the identity of each loan’s investor and specifically the identity of the securitization trusts.  Armed with the specific name of a trust, the pooling and servicing agreement can be located on Sec.gov and scanning the document for prerequisites for loan workouts might provide the answer.

A simpler way might be to ask the short sale account manager assigned to your file at each lender whether or not payment arrangements will prevent the successful closing of your short sale.  The answer you get may or may not be truthful and most likely not reliable based on rampant bank incompetence. 

A third option would be to try it and assuming there is a legitimate hardship where default is imminent coupled with persistent follow up by your real estate agent and/or yourself, the files could probably be pushed through.

Thanks for the questions and hope this helps.

Paul

The good news is that my credit situation has drastically improved, and I have paid all of the account to zero balance except for one.  This same creditor (it was a credit union) has three accounts listed on my report.  I had two accounts with them – an auto loan and a credit line.  I’m not sure why the three accounts, but the one that shows a balance doesn’t even have an account number.  The balance is around $3500.  I should also note the date of last activity was July, 2006.

My question is what is the best advice on how to handle this account that would best affect my score quickly?  They haven’t tried to collect on this in over 4 years.  It doesn’t seem likely that they would start now.  But the balance of the account makes my revolving credit ratio appear to be 100% because all of my other accounts are zero balance and closed.  I have read about pay for delete letters.  Is that possible in this case?  If so, how much should I offer them for settlement?  Are there any better solutions?

As it stands, my credit score is 609.  I’m looking to purchase a house as soon as possible.  I need at least a 620 to get there.  Any thoughts on how long it would take to raise my score to 620?

John

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John,

When is the most recent date of last activity, or DLA of the ten derogatory accounts that you have?

The negative item you still have showing you state has a DLA of July 2006 but you should know that by so paying it today would drop your score considerably as your DLA will now be April 2010.

You may want to see if you are even still required by law to pay the original debt which may assist you with attaining a “pay for delete” scenario (but I doubt it).  A link to the statute of limitations on a state by state basis can be found here.  

http://activerain.com/blogsview/377048/chart-for-statute-of-limitations-debts 

In regards to the derogatories that still remain and have at least six months since the DLA I would recommend disputing the negative items on your own (after careful research on the pertaining laws) or hiring a credit repair company to handle the credit repair dispute on your behalf.  In the honor of shameless self-promotion I would be glad to offer you enrollment into our services her at HTDI Financial Consumer Division.

I hope this helps and please contact me if you have any questions.

Very respectfully,

Brian C. Aber

Vice President of Marketing
HTDI Financial
877-877-4834 x704

Charter Board Member
National Association of Credit Services Organizations
866-976-2276

Jason

———–

Jason,

I’m actually surprised it went up and didn’t drop about a hundred points instead.  When you pay off older collections it renews the Date of Last Activity (DLA) and destroys the credit score. 

i.e. If you pay off a collection from 2004 today, it will appear and effect the credit score as a collection from DEC 2009.   If your score actually went up then I would say you are very lucky. 

I’m sorry I don’t have better news for you,

Brian C. Aber
Senior Account Executive – HTDI Financial Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704

STEVEN

————

Steven,
 
This is a difficult question to answer without more information, but my personal opinion is that if you owe the money and they are your accounts then you should pay the debt you owe, but you will want to know that by paying those items off you will renew the “date of last activity” and the score will drop.  
 
Credit repair is not the removal of debt, but the removal of inaccurate and unverifiable items from a credit report.  If you are in a state of financial hardship and can’t afford your bills then repairing and improving your credit picture should come after you get back on track financially.
 
Brian C. Aber
877-877-4834 x704

I have about six more collections accounts to pay off. They all total about $2229.00. The one account that I have in good standing is an auto loan that I am currently still paying on because when the car was totaled I was upside down. That amount is $3973.00.

Where do I begin? What do I do first. I will have the auto loan paid off by 12/18/2009. Do you think that I will be able to get approved for a decent loan by January if I pay off the current loan and pay off all the other accounts? The problem that I am facing now is that places will finance me on used cars with high mileage for unreasonable prices at 24% APR. Please help me. I am lost.

Thank You,
Crystal

—————-

Crystal,

Unfortunately the way the system works is that when you pay off your old collection accounts it will renew the “date of last activity” and destroy your score.  If you pay off a collection from 2004, it will damage your score with the same level of intensity as a brand new collection. Extremely counterintuitive, but it is the policy nonetheless.

Please note I am not informing you to not pay bills that you owe on, but simply letting you know what will happen to your credit score when you pay off outdated derogatory accounts.  Personally, I find the fact that you are repaying your debt and not taking the easy way out is admirable and deserves consideration.

I apologize for not having better news for you, but if you have any further questions or would like assistance with your credit repair process I would be glad to help.

Brian C. Aber
Senior Account Executive – HTDI Financial Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704

I have a question about the impact bankrupcy has on credit scores. I had filed chapter 7 in 2007 with a discharge in 2008. I went today for an auto loan and was told that my credit looked good, no debt, and timely loan payments. He said that he would guess by looking at my credit report I would have high 600 score but instead I have a 558.

I know that it hasnt been that long since I filed but I have paid off 2 loans since then and have one now, with timely payments being made, which is secured. I have known numerous people who have filed bankrupcy and within months they were getting car loans and even buying a house.

When do your scores go up? Why does it seem that mine is so low while others must be higher, given the same circumstances. I just dont understand. Will anyone help me rebuild my credit or will I just have to wait it out?

Thanks.
Marisa

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Hi Marisa,

It’s tough to say without looking at the credit report.  Do the tradelines that were in your petition show balances or late payments after the bankruptcy filing?  They should all be included in bankruptcy with no balances reporting and no late payments beyond the issuance of the bk case number.

Are there any other collections on your report?  How many inquiries do you have?  Are your credit limits reporting?  Questions, questions, and more questions…

Anyone looking for professional help with credit repair can contact Brian Aber with HTDI at 877-877-4834 x704.  Tell him Paul at the Broken Credit Blog sent you.

Thanks for the questions and hope this helps.

Paul

1. Just settle debt
2. The financial well being we used to have, and minimize the amount of debt we incur from here on out.
3. buy a home
4. refinance mortgage
5. Purchase a home
6. Purchase a home, we have medical bills with liens from long ago. over $6K worth. They are preventing me from getting a Habitat for Humanity Home.
7. purchase business
8. Purchase a home
9. Would like to start looking for a new car and eventually a house as well as being able to apply for lines of credit to have just in case a problem arises where I need emergency funds…ex: car repairs
10. get a home
11. Get a promotion
12. purchase home
13. mortgage my lease to purchase home with increased score.
14. Get a credit card to pay off the ATV loan that my exhusband defaulted on.  Then sell the ATV and pay towards the loan.
15. purchase new vehicle and home
16. Help others
17. Purchase a home
18. self esteem
19. in forclosure, need to save my home if possible. Am now sueing in state and federal court for fraud, etc.
20. buy a home
21. large purchases
22. Buying a home, having credit cards.
23. purchase a car and get some credit cards
24. purchase a home and a car
25. BUY HOME
26. I would want to accomplish buying a new house.
27. New home purchase…will have to short sale home (included in BK) soon, one year after discharge.
28. raise my credit score so that we can qualify for our new mortgage
29. Apply for a mortgage
30. Buy a house

And how about you?  What would you most like to accomplish after rasing your credit sccore?

Register for our FREE CREDIT REPAIR SEMINAR and…

Obtain a FREE CONSULTATION with Brian Aber of HTDI Financial (optional at your request).

Tarris

———

Hello Tarris,

Without knowing more I’d suggest that a 620 score is the minimum benchmark to be at or above before applying for a mortgage loan.  It’s possible to obtain USDA or FHA financing with a credit score below 620.  According to a May 7, 2009 USDA Administrative Notice #4441:

“Based upon the portfolio review of SFHGLP loans, applicants with credit scores of 619, or below, have a statistically higher likelihood of default.  This does not mean all applicants with credit scores of 619, and below, are poor credit risks and should be automatically rejected.”

The USDA notice goes on to identify how to deal with scores below 620 by evaluating: (1) adverse credit history, (2) debt-to-income ratios, (3) payment shock, (5) rent verification, and (5) income or job stability.

Thanks for the questions and hope this helps.

Paul

The Executive Offices of Wachovia told me they are only modifying loans that are 31 days late.  They said they are not suggesting to miss, but if I did, call back on day 31, and I would be modded. 

What happens to your credit score if I miss a few mortgage payments before this mod kicks in?  Does the mod also factor into my credit score?  The way my CCs have been squeezing me with balance reductions and cancelled accounts, does a credit score even mean anything anymore? 

I would appreciate your thoughts on this.

Dale

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Hello Dale,

Your credit score would take a pretty huge hit if you were current on everything and then had one 30-day late; you’d find yourself going from the mid-to-low-seven-hundred-range down to the mid-to-low-six-hundred-range instantaneously. 

A loan modification permanently modifies the promissory note and the Fair Credit Reporting Act would require that a loan be reported to the credit bureau based on the modified terms. 

A credit score matters, but it’s definitely not the first and primary concern.  For example, when a consumer is going through debt settlement, the credit score is secondary to settling debt at favorable terms.

Thanks for the questions and hope this helps.

Paul Jerome

Carmen

———

Hi Carmen,

They won’t normally list in a credit report – unless they’re in default.  I would suggest opening a couple of secured credit cards and finding a friend or relative to add you as an authorized user to an existing card with a high credit limit, low or no balance, and a long history.  That should get you over 620.

Thanks for the questions and hope this helps.

Paul