AARON COMMUNITY CULTURAL CENTER
P.O. BOX 5071
Gardena CA 90249
Welcome to 21 Days of Credit Tips
This Educational, Inspirational & Motivational moment is presented by Aaron Community Cultural Center (ACCC) and The MVET Way. We can be contacted @ 800.527.4184. As a way to pay it forward for our Fundraising Events, we are giving back to get back.
To thank you in advance for contributing 10.00 dollars a month to ACCC in 2016.
Your 10.00 a month will provide many hours of Knowledge,Skills and Execution for contributors to ACCC.
Part 1 starts today with the topic:
Making Secure Transactions Online!
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What Items Are In Your Credit Report?
Identifying information - name, address, date of birth, and names of employers. Most of this data comes from information you fill out on credit applications.
Trade lines - all of your credit cards and other accounts; the date that you opened the accounts, your credit limit, high balance, current balance, and payment history, etc.
Credit Inquiries - voluntary and involuntary inquires including account review inquiries( from your current lenders), hard inquiries (for new loan or credit applications) and promotional inquiries (for credit card companies and other solicitation offers).
Public Records - bankruptcies, foreclosures, wage garnishments, liens and judgments, collection accounts.
Start here, thank you:
Types Of Credit Used (10% of your score)
The number of various types of accounts (credit cards, retail accounts, installment loans, mortgages, consumer finance accounts, etc.)
Types Of Credit Tips
Apply for and open accounts only as needed. (Opening new accounts is not a short-term solution.) It is a good rule of thumb to have 3 open and active revolving accounts along with 1 to 2 installment accounts and one mortgage.
New Credit/Inquiries (10% of your score)
Number of recently opened accounts
Number of recent inquiries
Time since inquiry
Time since account opening
Your credit score takes into consideration all of these factors. In some situations, one factor can have a larger influence on one person's credit score. This depends on each individual credit situation and credit history.
A credit inquiry will appear on your credit report when your credit report is pulled for purposes of extending credit or by your current lender for other purposes.
AARON COMMUNITY CULTURAL CENTER
These inquiries affect your credit score. When you apply for a mortgage, auto loan, credit card or other type of account, you authorize the lender to obtain a copy of your credit report. These types of credit inquiries, when prompted by your own actions, appear on your credit report and will impact your credit score. Avoid an excessive amount of inquiries. Excessive depends on the depth of the credit profile. More than 5 inquiries may be excessive for people with a lack of credit. If you are shopping for a mortgage or automobile and you know you will incur multiple inquiries, make sure you have your credit pulled within in a short, focused amount of time. Depending on which scoring system you are dealing with, you may have a 15 day, 30 day or 45 day window to shop for and apply for credit for the purpose of obtaining a mortgage of automobile financing, thus incurring inquiries without the inquiries counting against you separately. The scoring system recognizes that you are shopping and will count the multiple inquiries as a singular inquiry, if it falls within the allotted timeframe.
Account Review Inquiries & Consumer Based Inquiries
These types of inquiries do not affect your credit score. When you choose to pull your own credit report through an online resource, it is considered a consumer-based inquiry and will not affect your credit score. Also, many of your creditors or collection agencies have the ability to pull your credit report to review your account activity. Credit reports pulled by a prospective employer when applying for employment will not affect your score.
In many cases a company will pull your credit report in order to send you pre-approved credit offers or other promotional offerings. These inquiries do not affect your credit score. To prohibit the ability of creditors pulling your credit report for promotional purposes you must OPT Out by calling 888-867-8688.
If you are a homeowner who is having trouble making your mortgage payments, you most likely want to do whatever you can to stay in your home and to avoid a foreclosure. The first thing you should keep in mind is to stay in close contact with your lender. If you are going to miss a mortgage payment, inform your lender, keep good records of all your correspondence and use registered mail to send documents and letters so you can verify that they were received. Most lenders will work with you, as foreclosing on homes carries heavy costs for them. The following are options to keep you in your home, while you get back on your feet.
Reinstatement. One way to work things out with your lender, if you are delinquent on your payments, is to negotiate a reinstatement of your mortgage loan agreement. A reinstatement agreement requires you to stay current on all of your future payments and to commit to agreed on payment terms for all your missed mortgage payments. Missed payments may be required in a lump sum or it’s possible you can pay the arrears in supplementary monthly payments to your regular mortgage payment over a period of 12 to 24 months. Reinstatement is really only an option if you were having serious financial problems but are over them, as it requires substantial monthly payments moving forward. If you can receive help from a family member or sell a valuable asset, reinstatement is a worthwhile option to pursue.
Forbearance. It may be impossible for you to stop making your payments, temporarily. Forbearance is an agreement between you and your lender, where your lender agrees to not pursue foreclosure and to accept no mortgage payments or a reduced mortgage payment for a defined period. If you have a temporary disability or can show that you expect money from an insurance pay-out or tax refund, you may qualify for forbearance. You need to have a positive payment history to be eligible. Forbearance is only granted if your lender is confident that you will be able to resume making your normal payments plus pay back the any arrears accumulated while in forbearance. In most cases the length of the forbearance plan will not exceed 18 months. Most forbearance plans stipulate that foreclosure will proceed, if the borrower defaults on the agreement.
Loan Modification. An important option for you to consider is a loan modification. A loan modification is a permanent change to one or more terms of your loan. Your lender can modify your loan by reducing your interest rate and the size of your monthly payment, by extending the repayment term of your loan, or by agreeing to reduce the principal balance of your loan. A principal balance reduction is negotiated when the value of the property has dropped. Balance reductions became relatively common starting in 2008, in reaction to the dramatic decline in home prices in many areas. As a borrower in distress, you must meet certain guidelines in order to qualify for a loan modification. The lender will examine the size of your loan compared to the fair market value of the property, your debt-to-income ratio, and your credit history.
Chapter 13 Bankruptcy. A last resort option that allows you to remain in your home is for you to file for Chapter 13 bankruptcy. Once you are under the supervision of the bankruptcy court, your lender cannot proceed with a foreclosure. The goal of filing bankruptcy, in these circumstances, is to allow you to retain possession of your residence while you participate in a structured repayment of your debts. Consult with an attorney who has experience in bankruptcy to discuss whether bankruptcy will allow you to keep your home.
It makes sense to take every step possible to stay to stay in your home. If you are having problems making your mortgage payments, it is crucial for you to know what steps you can take to avoid losing your home to foreclosure.
Audio section to the written Article for Days 15-23
Credit Tips Day 15-23