Thursday, July 21, 2011
Tuesday, February 8, 2011
High Foreclosure Rate Prompting Credit Score Changes
The next time you apply for a loan, you're likely to face even tougher standards than those already clamped on the consumer credit market by wary lenders. The still-soaring foreclosure rate is prompting changes in the way the nation’s major credit bureaus evaluate credit risk and determine credit scores. Changing consumer attitudes about credit responsibility sparked by the devastated housing market, high unemployment and a recessionary economy have too often left mortgage lenders holding the bag. An increasing number of homeowners, even those with respectable credit scores, are handing over the keys and walking away from their mortgage loans.
When the bottom dropped out of the housing market, a significant number of homeowners found themselves paying high interest rates on homes that were worth only a fraction of their mortgage value. Battered by layoffs and reduced incomes, unable to sell their homes in the stagnant post-bubble housing market and angry at the banking/financial industry they held responsible for their woes, consumers lashed out. An “I don’t care any more; let it be someone else’s problem” attitude surged across the country. Homeowners that just a few years ago would have quailed at the disgrace of defaulting on their mortgage loan chucked the keys at their lenders and walked out the door without a backward glance.
The nationwide change in consumer attitude took the lending industry by surprise. The long-held assumptions used to evaluate credit risk were turned upside down. Borrowers with good, even excellent credit scores who had always been considered a dependable credit investment could no longer be counted on to honor their debts. Finding themselves rudderless in shifting seas, the two systems used to determine credit scores in the U.S. — Fair Isaac and VantageScore Solutions — grabbed back the tiller late last year and started charting a new course that would more honestly reflect actual credit risk in today’s stormy mortgage climate.
The revised credit rating systems scheduled to be introduced the first half of this year and will increase the weight placed on the more subtle signs of financial stress that often contribute to late payments and default. Depending on how you stand on the new credit score rating parameters, you could see your credit score go up or down by a significant number of points the next time you apply for a loan.
To find out more about Peak Credit Solutions along with testimonials and frequently asked questions, visit us at www.peakcreditsolutions.com
Thursday, May 6, 2010
Why Not Dispute Online
Never Dispute Online
Disputing online sounds fast and efficient right? Wrong! Disputing online was created to make the credit bureaus jobs easier not yours. There is little regard to consumer interests when disputes are generated online. When fixing or improving your credit, it is not about making the job easier for credit reporting agencies but for them to actually do their job!
Don't dispute online because:
Time - The credit reporting agencies do not have to process an online request. The online dispute gets tracked automatically and a request to verifY is automatically forwarded to the data furnisher through E-Oscar. The restrictive 30 day clock is accomplished easier if everything is automated.
Paper Trail - With online disputes there is no paper trail to evidence the details of the dispute.
Limited Dispute Reasons - With the limitation of dispute reasons, an accurate description of the dispute is difficult in most cases.
"Expeditious Dispute Resolution"- The Fair Credit Reporting Act, FCRA, section 611a(8) changes the standard requirements and protections afforded to the consumer by the FCRA. Feel free to look up this section of the rule but in essence, the credit bureaus are allowed to cut corners when doing their investigation into you case. They also are not responsible to provide their methods of confirming negative information on a credit report.
To conclude, always send in any dispute having to do with derogatory information via the USPS and send it certified. Make the credit bureaus supply you with the proper verifications in writing that if need be you can dispute at a later date. Have a game plan around what to do next if you do not get the favorable response you require. Remember you do have rights as a consumer to challenge any information on your credit report that you feel is not accurate.
Disputing online sounds fast and efficient right? Wrong! Disputing online was created to make the credit bureaus jobs easier not yours. There is little regard to consumer interests when disputes are generated online. When fixing or improving your credit, it is not about making the job easier for credit reporting agencies but for them to actually do their job!
Don't dispute online because:
Time - The credit reporting agencies do not have to process an online request. The online dispute gets tracked automatically and a request to verifY is automatically forwarded to the data furnisher through E-Oscar. The restrictive 30 day clock is accomplished easier if everything is automated.
Paper Trail - With online disputes there is no paper trail to evidence the details of the dispute.
Limited Dispute Reasons - With the limitation of dispute reasons, an accurate description of the dispute is difficult in most cases.
"Expeditious Dispute Resolution"- The Fair Credit Reporting Act, FCRA, section 611a(8) changes the standard requirements and protections afforded to the consumer by the FCRA. Feel free to look up this section of the rule but in essence, the credit bureaus are allowed to cut corners when doing their investigation into you case. They also are not responsible to provide their methods of confirming negative information on a credit report.
To conclude, always send in any dispute having to do with derogatory information via the USPS and send it certified. Make the credit bureaus supply you with the proper verifications in writing that if need be you can dispute at a later date. Have a game plan around what to do next if you do not get the favorable response you require. Remember you do have rights as a consumer to challenge any information on your credit report that you feel is not accurate.
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