Month: July 2015

Getting a Mortgage with Bad Credit

There are no guarantees in attempting getting a mortgage with bad credit. However, with pending rate increases and still a reasonable real estate market, it’s worth a try. And, if you work on a few things you can increase your chances for approval.

Mortgage with Bad Credit

Stesps you can take to get a mortgage with bad credit

Employment

The amount of income is not necessarily “the” key factor. Mortgage lenders are willing to grant a mortgage loan with poor credit as long as the borrower can demonstrate their ability to make repayments for the 25 or 30 years of the mortgage term.

Debt Ratio

Typically a borrower has to have enough income and low enough existing obligations so that the amount of those obligations plus the mortgage payment represents less than 40% of their income. For example, with a monthly income of $5,000, if the mortgage loan repayments raise total debt repayments to less than more $2,000, then the application can be approved.

Credit Score

Even with a low credit score if other factors are in place, and the borrower is showing increases in their credit score the underwriter may look more favorably on it.

There are two ways to increase a credit score. One is to build positive credit by getting credit lines (credit cards, etc.) that will turn into positive trade lines on the credit report. The only issue with this just before applying for a home loan is that it may appear that the borrower is trying to access too much credit, and eventually have too large of a credit limit.

Credit Restoration

The other way to increase a credit score rather rapidly is though credit restoration or what some people refer to as credit repair. This is the process of getting older derogatory items removed from a credit report because the creditor does not validate or verify the accuracy of the account. This can be done by the consumer but it is advisable to use a reputable credit restoration company. Just as someone could represent themselves in court it isn’t the best use of someone’s time nor do they perhaps have the expertise necessary for success especially if you are trying to get a mortgage with bad credit.

Down Payment

There is no underestimating the advantages of providing a large down payment. Usually, about 5% is the minimum required. But when it comes to applying for a mortgage loan with challenged credit, it may require a substantial amount more. For example, a 10% down payment on a property worth $250,000 requires $25,000. The financial discipline required to get $25,000 together is significant. This kind of discipline is exactly what lenders want to see before approving a mortgage loan.

For further assistance or information on how to increase your credit score while trying to obtain a mortgage with bad credit, call or email us.

ERA Credit Services
727-222-0120
info@eracreditservices.com

ERA Credit Services is now a Member of the Central Pinellas Chamber of Commerce

Since we began representing United Credit Education Services in 2012, we have always strived to be a part of our community and support local businesses. We realize the challenge small business owners face and the huge benefit of referring business to each other. That is why we are proud to announce that ERA Credit Services is now a member of the Central Pinellas Chamber of Commerce.

Central Pinellas Chamber of Commerce

Since relocating to, and now offering credit repair in the Tampa, St. Petersburg, Clearwater, Largo area last year, we have been looking for organizations that truly promote local small businesses. We have found one of those organizations in the Central Pinellas Chamber.

We are very pleased to be a part of the Central Pinellas Chamber of Commerce.

We have already begun to establish meaningful relationships with business owners in the area. We look forward to helping small business owners with challenged credit as well as real estate, mortgage and banking professionals that need credit worthy clients.

The Central Pinellas Chamber of Commerce is one of the most active groups we have joined. In addition to leads groups that meet every two weeks, there are a variety of events that occur throughout the month that are always well attended by members and guests. As well, there are opportunities to host happy hour or other meeting events for more exposure for our business.

For more than 60 years, the Central Pinellas Chamber of Commerce has been empowering business by providing the necessary tools and resources to help them succeed. This includes networking leads groups, government advocacy and economic development initiatives in addition to programs and events focused on professional development.

If you would like further information about Chamber of Commerce activities and the benefits of joining the Chamber visit http://www.centralchamber.biz/. Or, call Membership Director, Kathy Pabst Robshaw at 727-584-2321.

View the ERA Credit Services listing in the Central Pinellas Chamber of Commerce Directory

Tips on Maintaining a Good Credit Score

10 Tips on Maintaining a Good Credit Score

Maintaining a Good Credit Score

Below is some great information for every consumer on first getting, and then maintaining a good credit score.

Monitor Your Credit Report

First, in order to know if you have a good credit score, enroll for an online credit monitoring system that alerts you if there are changes to your report and/or credit score. We suggest SmartCredit.

Use Credit Cards Like a Debit Card

For building and maintaining a good credit score treat your credit card like it’s a debit card. If you can’t afford to pay off a purchase at the end of every month don’t make that purchase. And, use cards with benefits (travel, points, etc.)

Credit Card Balances

If you have to maintain a balance on your credit cards make sure it is low relative to your limit. A good rule of thumb is under 30% of the limit. The credit reporting agencies all consider debt to limit ratios an impact factor in calculating a good credit score.

Use of Credit Cards

If you have credit cards use them periodically, even just once every few months. A dormant card reduces the impact on a good credit score.

Resist Department Store Cards

If you have major cards you don’t need a store card. They usually come with annual fees and high interest rates.

Resist Co-signing for Others

When you co-sign for another on any type of loan you give up control of credit history to another person. If that individual is late on a payment in can cost up to 60 points and affect your good credit score.

Expand Your Portfolio

Maintaining a good credit score requires more good credit. If you have just a secured credit card, apply for an unsecured card after 6 to 9 months. But don’t have more than 3 credit cards. It’s simply not necessary.

Keep Track of Automatic Payments

Payments that are automatically deducted every month from your checking account by giving a creditor your debit or credit card must be monitored. If your card expires they can quickly turn into late payments. Late payments can have a huge impact on your good credit score.

Note Annual Fees

If you have credit cards and other accounts with annual fees make sure you pay those fees promptly. Sometimes they go unnoticed and therefore, unpaid causing late payments and delinquencies.

Keep Inquiries to a Minimum

Hard inquiries can cost you points on your credit score. Keep inquiries from prospective creditors to a minimum. Be especially careful when purchasing a car. Some dealerships and car lots will have several finance companies run reports on you all on the same day.

If Your Credit Score is Below 640, Get Help

A credit score below 640 will not typically put you in a position to qualify for a mortgage. As well, it will cost you more in interest rates and deposits for credit cards, insurance, cable, cell phone, other utilities and more. To learn more about what we can do to help you visit ERA Credit Services 

To talk about your specific financial and credit situation call us:
San Diego (619) 492-3040
Clearwater (727 222-0120

Or email us at info@eracreditservices.com

Debt Collectors Must Provide Debt Validation Notice

Often consumers get calls from debt collectors or collection agencies stating that they owe a sum for a past due bill such as a credit card, medical bill, or other type of debt. In many cases, because of the strong stance taken over the phone by the debt collector, consumers panic and send them payment without knowing whether this company truly owns the account and legally can collect on it.

Debt Collectors

Think about it. Couldn’t anyone who simply knows about an overdue account call people and collect money if they are not forced to validate and verify information about the account and legally collect on it?

Within five days of their initial communication, debt collectors are generally required to send debt validation notices to alert consumers about their right to request proof that a debt is valid or dispute the debt. In other words, they must first, prove they own the account or otherwise can collect on it. And, they must inform the consumer of their right to dispute the debt.

The Consumer Financial Protection Bureau (CFPB) has found that Syndicated Office Systems, LLC, which does business as Central Financial Control, failed to send debt validation notices to more than 10,000 consumers. During this time, the company continued to collect over $2 million from consumers who did not receive the notices. These notices can be an especially important consumer safeguard with regard to medical debt, where issues like insurance reimbursements and medical billing processes are commonly fraught with complexity, confusion, and delay, and can lead to consumers being unsure of how much to pay or even whom to pay. More than 43 million Americans have medical debt adversely affecting their credit reports, and more than half of all overdue debt on consumer credit reports is from medical debt.

Consumers, when contacted by debt collectors, can request validation of the debt. If they do not receive validation in the mail they should not send any payment.

There are companies that call consumers and try to collect money on debt that they do not have the legal right to collect on. Some consumers have made payment to these fraudulent debt collectors and have not received credit and thus lost their money.

Read the full article http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-medical-debt-collector/

For further assistance visit www.ERACreditServices.com