Monday, June 15, 2015


Bad credit ruins lives.  The difference between living life and struggling to survive is based completely on credit quality.  Let’s look at a car as a simple example.  Most people in today’s society need a vehicle to get around.
A $20,000 car loan with good credit will cost approximately $322 monthly.  This is based on a 5% interest rate for 72 months.  The exact same $20,000 car loan with bad credit will cost approximately $541 monthly.  This is based on a 21% interest rate for 60 months (bad credit means a higher rate and shorter term).
This is the same car, but one is costing $219 more EVERY month. The person with good credit will pay $23,184 for their car.  The consumer with bad credit will pay $32,460 for the same car.  That’s a $9,276 difference.  This means the same car will cost the consumer with bad credit 46% more than the one with good credit.
These examples are not extreme.  These are based on common interest rates you will actually see on a $20,000 auto loan.
Rent and home expenses are another area where customers get taken for great amounts of interest.  A $100,000 mortgage costs a good credit consumer $577 monthly and $207,720 over 30 years. The same home would cost a family with challenged credit $841 monthly and $302,760 over 30 years.
The consumer with good credit will pay $264 less per month and save $95,040 over the lifetime of the loan.  That means the person with bad credit will pay $95,040 more in interest for a $100,000 loan, due to their credit.
Credit cards might cost $116 more monthly based on credit. Utility payments are higher, insurance payments are more, and so are many other regular family expenses.
Most people know credit has an adverse effect on their life. But the truth is, bad credit controls their lives.  Outrageous amounts of extra interest are being charged each and every month.  That debt and those higher payments strap most families, forcing them to live paycheck-to-paycheck.
Bad credit ruins lives; EVERYONE CAN AND DOES DESERVE a chance at good credit.  We ALL make mistakes and we can recover from them.  Don't settle for bad credit! 

Monday, April 6, 2015

America's Past time is here - MLB OPENING DAY! Have a problem with your credit report? online dispute system is BROKEN!

The ability for consumers to dispute information on their credit reports was created to provide the method to correct problems with our credit reports.  It's a GRAND idea and very much needed in this day and age of electronic records, background checks, credit reports, currency, banking, etc. However, this system has turned into an automated fiasco with nobody - not the credit bureaus or the furnisher (creditors, collection agencies, etc) - taking the responsibility for incorrect information on credit reports.

The automated online SYSTEM has become fundamentally flawed!  It uses systems such as e-OSCAR and OCR to continuously "parrot" information back and forth from the furnishers to the credit reporting agencies.  In other words, the information that reported incorrectly to your credit report (that you dispute) will be that SAME information that was wrong to begin with!

The FCRA (Fair Credit Reporting Act) grants you the right to a "full and complete investigation at no expense to the consumer" into accounts on your credit report that you request.  Because of these automated systems mentioned above, there are NO REAL INVESTIGATIONS completed.  It has become an automated process of sending and receiving information between the financial institution and the credit reporting agencies.  This process BARELY satisfies the FCRA regulations and FREQUENTLY violates the law and your rights.

On top of all of this, the TRUE kicker is that when it comes to online disputing, the credit reporting agencies seem to have found a method to turn their incorrectly and erroneous reporting against your credit reports into a profit center.  When consumers dispute online, there is literally no interactions with HUMANS needed to complete a real investigation (even though it should be noted that that human interaction for the dispute process is almost entirely forwarded out of the country for extremely cheap labor costs).  Online disputes are handled 100% by computer systems; eliminating the COST of labor to conduct the investigation.  Meanwhile, the credit reporting agencies still CHARGE the data furnishers for the errors.

Filing disputes online only MAKES the credit bureaus money (don't they have enough of it by now?) AND more than likely doesn't fix ANY true problems.  On top of this, it also waives your RIGHTS to know what actually happened (Dig in deeper here: ).

The lazy days of summer are here.  May your favorite MLB team win it all!  Don't lay down and allow the electronic world of information win it all - you matter; the consumer matters!

Monday, January 19, 2015

YOUR RIGHTS vs. Collections!

The Fair Debt Collection Practices Act (FDCPA) is a law which protects you from unfair and unethical debt collection practices.  This law can be very helpful in stopping collection company harassment and abuse.
One benefit of this is that you can stop these collection companies from contacting them by phone or in writing.  It is important to note that in the case of a valid debt, you don't want to take away BOTH avenues from the agency in question.  If you demand a "cease and desist" from calling or writing you, you'll leave them only one method to collection - civil court.  Prepare a "cease and desist" letter and force the agency to stop the contact in the method you desire (recommend phone).

Some other restrictions from the FDCPA include:
  • A creditor cannot imply that many people are involved in the collection of a debt, if only a few employees really work for the company.
  • Cannot threaten to collect or sue for “collection costs” including attorney fees and non-pre-arranged interest.
  • Cannot threaten to sue or take any legal action against you unless the threat is followed through 
  • Cannot pretend they are legal counsel or an attorney when they are not
  • Cannot falsely claim that the debt, if left unpaid, will be moved to an attorney or other debt collector
These are a few of many restrictions the FDCPA puts upon debt collectors.  Knowing these rights will help you deal with these unethical debt practices in the future and stop creditor harassment.
Any of these violations can lead to a potential lawsuit and can help you have the negative account agreeably removed from the credit report.  Have a wonderful day!

Your Friends at Credit Management Solutions! 


Monday, January 12, 2015

Stop Renting, Buy. New Year's Resolution for many in 2015!

One of the top resolutions made this year is to stop throwing money away on rent and finally BUY your own place.  This statement is true for millions of Americans as we move into 2015 in earnest!  One of the most important things you can do to make this resolution become a reality is to have game plan!  What should you do FIRST?  

The most important thing you can do is STRENGTHEN YOUR CREDIT SCORE!!!!  Don't wait until a lender is pulling your credit.  Don't wait until you've found the house of your dreams.  You need to begin working on this NOW.  The higher your credit score, the better financing options become.

It is true that many qualified borrowers can be approved for home loans with scores between 580-640.  However, the market today is looking for borrowers with 640+ as a minimum.  Further, scores of 700+ usually will get you a good deal and 750 and above will garner you the best rates and pricing on the market.

Follow the steps below and give yourself the best chance of obtaining your dream!

Step ONE: Pull your credit reports and ensure you're not being unfairly penalized for old, paid or settled debts.  Do this now!  Don't wait until the lender pulls your credit to find out what is hurting your scores!  Stop applying for new credit and do everything possible to REDUCE your debt prior to application.  Ideally, when the lender pulls your credit report, it is the only time it has been pulled in the past 12 months (you personally obtaining your credit report does not count as a pull or inquiry).

Step TWO: What can I afford?  You will not have a problem getting approved for a home when the payment you are attempting to qualify does not exceed 30% of your GROSS monthly income.   If you're salaried at $50K annually ($4166/monthly) - 30% of your gross income is $1250.  Go use a mortgage calculator with current mortgage rates to determine what price range should fit inside your budget.  Be aware if you carry alot of other debt, you may have to revise your number later.

Step THREE: Save, Save, Save With the exception of a VA loan or a few other programs that are in existence, you will need to have anywhere from 3% to 20% to be able to put as a down payment for you home.  Be aware that this is your down payment and will have additional costs/fees to be paid out of pocket.  Not only do you need to have this money for these purposes, but it is also a very good thing to be in the habit of putting money away.  Owning a home is fantastic...and expensive.  Expect to spend 3-5% of your home's value on upkeep annually.  If you're living paycheck to paycheck, you need to create habits that begin to build a rescue fund for when you suddenly have to replace that water heater .

Step FOUR: Pre-Appoval The #1 thing you can do when seriously considering home ownership is to have EVERYTHING in order prior to contacting the lender.  Do everything you can do pay down your debt, clean up your credit report, and have your down-payment/cash saved prior to talking to the lender.  Your process of home-ownership doesn't begin when getting your pre-approval.  It begins months and even years before.

Step FIVE - LOVE the House you Buy Don't skip any steps!  Don't put the cart before the horse.  Whatever you do, do NOT fall in love with a house you cannot afford.  Now is the time after the first 4 steps to find out what you love and purchase the home that MOST fits your loves.  This home is to be something that will make you happy for years to come!  Be sure to LOVE it when you buy it!

Keep in mind the preappoval to closing process is MUCH MORE EXTENSIVE than it was a few years ago.  Even if this is your 5th home purchase and you've never had to provide that before; understand that the quicker your provide what is requested by the lender, the quicker and easier the process becomes for everyone involved!  Happy 2015 and Happy Home Buying!!

David Villmow is the Director of Credit Management Solutions specializing in credit consulting, restoration, and management for the mortgage industry. Check Credit Management Solutions out online: 

Friday, November 21, 2014

Should I get a pre-paid credit card?

Simple answer is "almost never."  They are basically gift cards, nothing more.  It's understandable that some people have trouble obtaining a bank account, but, when/if you can, you should avoid using pre-paid credit cards.

As stated above, pre-paid credit cards are basically gift cards.  In fact, many of us have received these cards AS gifts in our stockings or event cards.  Getting these are fantastic gifts and we all love them, however, there is virtually no upside for consumers to get pre-paid credit cards for personal use, especially when considering the normally high fees that are associated with these cards.  To top it all, pre-paid cards do not report to your credit report.  If you're going to use your own money to obtain your own pre-paid credit card (that you will also use), you may as well put your spending habits to work building your credit!

An alternative to pre-paid credit cards are SECURED credit cards.  MOST secured credit cards report to all 3 credit bureaus; you'll be adding history to your credit report every time you use these cards.  Important NOTE: Your deposit is the collateral for which you are granted the line of credit.  It is NOT meant to be the replacement to making your payments on your secured credit card.  Make your payments like you would any other bill.

For a list of secured credit cards with some great rates, CLICK HERE!

Monday, November 3, 2014

Denied for "Pre-Approval"????? Credit Bureaus selling your information.

That notorious junk mail.  The Credit Card offers.  The PRE-APPROVAL letters. It does have it's place.  We've all seen one that generated genuine interest; ESPECIALLY for those that have been denied the past few times they applied for a credit card or a loan.  A Pre-Approval is NOT an's simply a direct mail advertisement.  Period.

The company that sent you that pre-approved letter may have a "special code" generated for your "approval."  They may have included an application to fill out or a website to visit to more quickly generate your approval status.  No matter how official these may look, these are misleading and confusing.

These companies have massive marketing budgets and departments designed solely to get consumers to apply for credit regardless whether they qualify or not.  The truth is, these companies PURCHASED your information from the credit bureaus along with hundreds, thousands, and possibly millions of others that possibly fit their marketing criteria (credit scores, income levels, demographics, etc). 

The credit bureaus are not on your side.  They LOVE it when these companies purchase this information as it will generate FURTHER revenue for them.  They generate revenue when they sell your information to be marketed to and then sell it again in the form of your credit report when you apply for these offers. Just remember, these are simply advertisements and you're receiving them because you fit the model to be a lead for this ad.

A hard inquiry into your credit report will still be required and can count against your scores when.  Too many of these inquiries WILL hinder your scores.  Be careful and selective; pre-approval letters are simply ads to get you to apply.  It is very common for consumers to receive these letters and still be denied.  It will NEVER hurt your credit to receive these offers.  It CAN hurt your credit if you apply for too many of them.
If you'd like to be removed COMPLETELY from these go to:

Be careful, be educated, be informed!
Your friends at Credit Management Solutions