You raise a couple of good (and even philosophical) points. In a perfect world there would be a universal standard for credit scoring, along with clear dissemination of information about its workings. Alas, this is not so. Quite the contrary! New “consumer” credit scores seem to pop up everyday.

Often referred to as FAKO scores, these “consumer” scores are professedly designed for “educational” purposes and have no bearing on the scores lenders use when making lending decisions. The creators of these scores make millions, while unaware consumers continue to be blindsided by shocking differences between the educational score they paid good money for, and the FICO score their lender pulled.

CreditKeeper is actually the least offensive of the bunch, usually coming in at a close proximity to FICO. The Vantage score is the most deceptive, reporting a range of 501- 990. Many consumers with FICOs in the 500 range are thrilled to see a Vantage score in the 700s. Unfortunately, that is a score that they cannot take to the bank.

The 110 point difference between your CreditKeeper score and the score pulled by Roadloans is a bit unusual, but is probably because Roadloan pulled the “Auto Industry Option” score designed by FICO for auto lenders. It is a FICO score, but it is re-worked for the auto industry. Just another twist in the complicated world of credit scores.

Marc, I am in agreement! And sympathetic to boot! But for now it’s every man for himself.

Learn more about how credit scores work!

The second your credit report meets the minimum requirements, your score will return. The longest it will take will be six months from the time your new secured cards report (in the case that you do not have a single surviving account – open or closed – with at least a six month history). Or it could be as soon as the first month the new cards report (in the case that you have at least one account – open or closed – with a six month history). it’s just a matter of satisfying FICO’s minimum requirements.

You are doing the right thing by opening a couple of secured credit cards. The accounts of Public Savings Bank were taken over by Capital Bank in August and their secured card offering was suspended. We heard from Capital Bank just last week that they are re-introducing the “Open Sky” secured card, and will do so gradually starting next week. In the meantime you may check out these other secured card offers, all of which report to all three bureaus (to the best of our knowledge).

Household Bank MasterCard
Capital One Secured MasterCard
U.S. Bank Secured Visa

For the best results keep those balances low. Your new cards can add a lot of loft to your scores, but if you let the balances climb towards the max they can easily cost you dearly.

Good luck!

We’ve gotten good feedback about this free tax-advice resource from Turbo-Tax (you do not have to be a Turbo-Tax user to join). I understand that the forum is manned by Federal and State tax experts that may be worth chatting with: https://ttlc.intuit.com/

As for the impact of an outstanding state tax lien on your ability to get a mortgage, please check with a mortgage originator for the specifics, but generally, tax liens (Federal and State) need to be resolved prior to closing on a mortgage. It may be possible to get a mortgage if you have entered into a payment plan and can document some history of making the payments, but again that is a detail for your mortgage originator. On another front, if you are not already working with a CPA or tax attorney on your re-filing it is worth considering! A tax professional may be able to save you a bundle. Good luck!

I was unaware of the current lein (from 2002/ 2003 time period) and am in the process of re-filing state income taxes for this time period.

Are state tax liens as harmful as Federal ones in securing home loans?

Inquiries can lower your FICO score between 0 and 5 points depending on the overall content of your credit report. The more established and stable your credit, the less of an impact an inquiry will have. The 23 point drop you experienced may be due in part to the inquiry, but a close look should reveal some other change that caused the fall; this could be as innocent as a small increase in a revolving account, or an activity date update by a collector, either of which could occur unnoticed.

But to address your larger concern, you did the right thing in opening your Capital One credit card! And it will be a big help to your scores. Specifically, someone with no open mainstream accounts can expect a 75 point jump or more from a single new card, and as much as 150 points from two new cards. As for the time frame, you need to allow 6 months of reporting time for the new cards to deliver their score benefit.

HOWEVER, in the short term you can expect your scores to fall . This “new account” effect will last for the first couple of months, and is simply the way FICO adjusts for uncertainty; they do not know how you will manage the new debt and need time before they trust you! So make sure to pay on time, and even more important – keep those balances down. If you max out your new card you will see your scores fall – at least until you get the balances back down. For score optimization use less than 20% of the card’s capacity. Best Wishes!

First is the inquiry which will have a small impact – between 1 and 5 points depending on the overall content of your credit report. But in the case of Public Savings, you are right, they do not run your credit, so there is not effect from an inquiry.

The Second reason a new credit card will lower your credit score is that it is new and unproven debt. You may see a significant score drop – 50 points is no uncommon. But keep in mind that this drop is very short-lived and should reverse itself within 3 months, at which time your scores will start to climb. There is no way around this initial drop, but be patient and you will be well rewarded!

I’ve been searching various bankruptcy websites, I don’t want a bankruptcy mill representing me for sure. I think I may have found an attorney who can offer the personal approach that I need.

Now all I need to do is gather enough courage to actually pick up the phone, call the attorney, and get the process started.

Thanks Again,
DB

It is true that you may not be able to get a mortgage for three years. This is a pretty standard mortgage underwriting guideline.

This does not mean that you should ignore your credit during this period of time – nor does it really mean that you cannot “do anything”.

There are many things that are credit driven that you should consider, including employment, insurance, property rental, auto loans and credit cards. Some of these may have bankruptcy restrictions as well, but you can’t really afford to prejudge; better credit will give you better options – not to mention that when three years have passed and you are ready to get your mortgage your credit will be awesome.

We specialize in post-bankruptcy clean up and will be happy to help.

Credit issues can cause a lot of stress, so I don’t want to minimize their importance in any way, but there are two facts that are always true. First, no one is beyond hope, and second, if you step up and face your problems you will discover that for every type of credit problem there is a solution. Some solutions are faster than others, but there is always a way.

This does not mean that Sky Blue is the right answer for you. There are many cases where it would make more sense to consult a bankruptcy attorney or a debt consolidation service. Generally, if you have a substantial mass of active debt that you cannot handle you are not a candidate for credit repair.

Some people ask about starting credit repair simultaneously with consumer credit counseling, or while they are settling their outstanding debts – and there are cases where this might work, but we usually suggest that they wait until the dust settles so we can see everything at once.

We are always happy to review your credit report. If we can help we will, and if not we will be happy to point you in the right direction.

It sounds like you have no argument with the way the credit bureaus are reporting these accounts. Our program is designed to hunt down and eliminate erroneous reporting issues. So, based on your description there is little we can do to help. And if you do have errors on your reports (related to or separate from the issues you have mentioned) it is usually best to resolve open active collection accounts before starting the process of cleaning up your reports.

Having said that, I would like to add a few thoughts…

You mention that you do not want to consider bankruptcy; if this is a moral position based on the conviction that you should repay your legitimate obligations, I respect that!. But based on everything you have said, I suspect that you qualify for a chapter 7 bankruptcy, which would remove the burden of all of this debt in one shot – and all of the stress that comes with it. Bankruptcy is a difficult choice for many reasons, but it does serve a purpose and might be worth looking into. Aside from any moral question, if you are concerned about the long term impact of a bankruptcy on your credit, it can be minimized by taking the proper steps to insure that the items discharged are reported properly after the fact. As it stands, I can assure you that your credit would recover from a bankruptcy much faster than from any repayment or settlement plans. Your call!

“Pay for delete” negotiations have become problematic as virtually all large collectors now have internal policies in place prohibiting them, and although smaller independent collectors may entertain the idea they are also most prone to reneging on their agreement.

If bankruptcy is absolutely off the table you may want to arrange a free consultation with a company like greenpath.com, that can discuss other settlement and repayment options with you.

You are doing a wonderful thing by facing these issues head on! It is wonderful testament to your character and a sure indication that you will succeed!

I wish you the best and I hope this helped in some way!

I recently started trying to clear up some of this by first contacting the collection agency holding the fingerhut account and asked for a pay for delete but was told they had no controll over the deletion but wanted to set up a payment plan that I declined after being told they would not actively seek a deletion from the credit agencies.

Next I tried tackling the largest which is still with Santander and not a collection agency. I called to make a settlement arrangement which they offered $9000.00 with $350.00 per month payments for 30 months and a service fee of $1200.00 bringing the total to $10,200.00. I asked to have the agreement sent to me in writing before I started making payments and I keep getting delay tactics. Every date that I recieve from them of when I will have the settlement agreement emailed to me comes and goes and still nothing in writing. I want to start payiing the debt but only after I’m assured that we have an official agreement.

My goal was to settle with Santander then move on to the other repossession with Wells Fargo for the $6700.00. And find a way to get the other 2 collection agencies to accept a pay for delete for the $109.00 and the $189.00. I’m feeling really frustrated right now because I feel like I’m getting no where fast.

Despite all of this I recently got another car loan in 12/2010 with Capital One. and I just recently got a secured master card with Captial one and a unsecured card from Orchard Bank. All payments have been ontime for the last 3 months, with small balances on the credit cards, and my credit rating has recieved a small boost.

I don’t want to file bankruptcy but if Santander defaults on our agreement then I’ll have no choice but to try a CHP 13 perhaps.

I have a few other issues on my credit report such as a student loans that I payed off completely through MI Garauntee, but Nelnet still shows that I owe 3 seperate balances ranging from $200.00 to $300.00 stating they have filed a claim with the government for the insured portion of the loans. I recently disputed this with Experian.

Also, I recently had a duplication for a Plains Commerece card removed by Experian and when I tried to make payment arrangements with Plains Commerce today the CSR told me to file a dispute because they have no record.

So, I guess my real question is………Are my credit problems something that Sky Blue can help me with?

I’ve been researching credit repair companies and this one is on the top of my list. Just unsure if you can help.

DESPERATE!!
Michigan