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Looking for credit counseling/advise

Hoping to put myself in a position to purchase sometime next year.  Attempting to rebuild a good credit score after a bad marriage/divorce situation and want to start out on the right foot.  Can anyone recommend someone in the Capital District area?  Thank You
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July 26 2010 - US
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Try Consumer Credit Counseling.
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July 26 2010
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CCC is honest and works for many people. They will not scam you. You can also repair your credit yourself by targeting trouble areas. Start by getting a copy of your credit report so you know what is on it and what your current score is. One credit report a year is free from the credit reporting agencies here, but you will have to pay a small amount for your actual credit score.

You can get strategies to improve your score here and here. The myfico site also has a break down of what makes up your score and what you can do to improve it for free. Focus on making yourself a good candidate to buy before you buy. It will reduce your costs in getting a mortgage and make it more likely that you will be able to keep the house that you buy out of financial trouble later. Hope the links help.
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July 26 2010
Consumer credit counseling is a very bad idea.  Any debts managed by CCCS will report to the bureaus that they are helping you manage your debts.

Why is this important?  ANY debt that you can't manage on your own and is reflected so on your credit report HURTS YOUR CREDIT!  CCCS falls into the same category as Bankruptcy!  Ask your lender, they will verify this.  

If you need direction on getting on track with your credit, please get in touch with me, we've laid out roadmaps for thousands over the past 10 years.
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August 09 2010

 Today you need a minimum score of 640; sometimes more depending on the type of loan.  You credit history is an inidication of how likely you are to repay your loan in full and in time. The question is, why is your fico  low?  Debt to income ratio? Spend less and pay off your debts. Keep credit cards at about 50% or less dont stop using one and charging another 100%. not sure why but this gives you extra points.  Don't close any credit cards or lines of credit this decreases your debt to credit ratio.  Review your credit carefully and pay collections, write letters of explanation , etc.. Don'st ask for credit from any one as denials take points off and don't get into any more debts.  It is crucial that you look into your situation and talk to a loan officer.  There are many things that you can do to improve your credit rating and your situation.  I worked with clients that didn't have a rating period and brought them to have a decent rating to buy in 4-6 months . This all depends in what situation have brought your credit down some can be improved in a few months others take longer; You can aslo try to get a cosigner that has a better situation to help you qualify. The cosigner needs to understand his resposibilities clearly.  I work closely with several loan oficers that can tell you exactly what is wrong and what steps to take. So a loan officer is the way to go. .  Definetely talk to a good loan officer. I can recommend one.

 

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August 09 2010
@ Maria-  Your debt to income ratio is not part of your FICO score.  Your income is not on your credit report.

Giving advice regarding credit reports is dangerous when giving incorrect information.

When paying collections, make sure to request a deletion letter for payment.  Otherwise, your collection will move from unpaid to paid and still remain on your report for 7 years.  

Also, don't hold loan officers as "Credit Experts" as most are not.  They specialize in mortgage structuring, pricing, and underwriting guidelines.  I know this as I was a mortgage professional for 14 years.

Until I became a Board Certified Credit Expert, I really had no idea as to what made up your credit scores other than debt to limit ratios on revolving accounts.

Your FICO scores have 5 key elements that need to be managed properly, and this is outlined on FICO's website. 



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August 09 2010
Be cautious with debt management services like CCC since you are looking to put yourself in a position to buy next year. Most banks will look at CCC the same as a CH 13 bankruptcy. This will likely limit your options when trying to obatin future mortgage financing.
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August 09 2010
Thanks for validating my point regarding CCC and the Bankruptcy position.  The more consumers (and other RE professionals) know about making a decision like this the better.

I went to the CCC websites Q&A section, and here's what they said about CCC effecting your credit..

Q.How will your program affect my credit or credit score?
A.When entering the Debt Management Program, you will be advised to close all of your open lines of unsecured credit, so that you will not incur any new debt while trying to solve your current debt problems.  Initially, this may cause a drop in your credit score.  However, you can expect your credit score to improve on the debt management program if you follow the rules of the program, do not open any new debt, and commit to making on-time payments.  The combination of on-time payment and a reduction in total debt will have a positive impact on your score.

A handful of creditors will report, or continue to report, an account in a debt management plan as delinquent, until the balance is paid-in-full. This could have a negative impact on your credit.  While you are on the program, some creditors may contact the credit bureaus and place a notation on your report indicating that you're going through credit counseling. This is a neutral notation that does not affect your credit score, which is what most lenders use to determine creditworthiness. The way this notation is viewed by individual creditors varies. Some creditors may view the "CC" notation as a negative, when making a decision to extend new credit; however, you are strongly advised against opening any new lines of credit while participating in the program, as your ultimate goal is to become debt-free.

The CC notation is usually removed by the creditors when you complete or terminate the program and, if it is not, you may contact the credit bureaus to have the inaccurate information removed. We recommend that you review your credit report approximately 60 days after completion/termination of the program, to ensure that all information is being accurately reported.



So just so we all understand..CCC is going to close your credit card accounts, won't allow you to open new accounts while in the program, and report to the bureaus that those specific accounts are IN the program (debt management).

This WILL help you out of debt, but will absolutely KILL your credit score.  I just wanted to make that clear.



So to help myduffey, who needs to REBUILD his/her credit, CCC has nothing for you.  You need to establish credit.  



Throwing out info like CCC will help everyone for free with their credit is BAD advice.  It helps to speak with a Board Certified Credit Expert such as myself.

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August 09 2010
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Ive watched my credit score from mid 500s go up to nearly mid 700s the last 5 years (I was in the military for nearly a decade overseas, which is why my score was down, I wasn't using credit).

Its pretty easy. This step is optional, but get hooked up with an Equifax account to monitor your credit score. You can see in real time the negative effects of having a high utilization rate on your credit cards, or the positive effects of home ownership, in time. Never make late payments, never go ~35%+ on your utilization rates (not exact numbers, point is dont get it maxed out; dont get credit cards with low credit limits; but having a poor credit score wont help you get a high credit limit), own at least 3 credit cards, at least one revolving loan (car payments), a home, dont try to get new credit all the time, just dont touch it, and if you use credit, pay it off asap. Thats it! Of course, whats not being said is, having the income helps, more than anything else. Cant save if you cant make. If you keep this up, you will enjoy watching your credit score climb several points per week; paying off a maxed out high interest credit card for me easily bumped up 30-40 points (bye tax return). lesson learned, do not cancel old credit cards, credit history is a BIG factor.
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August 10 2010
LAMINI, spoken like a true "Expert", I can't agree more!



Congrats on understanding what "Good Credit" really is and the formula for success!



I don't run across many people that actually comprehend and practice the formula, and you're right, income is a key variable!

KUDOS!
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August 11 2010
 
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