Your Questions About How To Fix Bad Credit
Lizzie asks…
How can you fix bad credit, can you wait it out until it disappears off your credit report?
I’ve heard bad stuff goes off your credit report after 7 years, so can you wait it out and have decent credit again after 7 years? Anyone know how that works or what to do to fix it?
Credit-Repair-Guy answers:
DaMan’s answer is absolutely correct.
The only thing I could add is to dispute all of the negative items on your credit history. The Credit Reporting Agency is required to investigate all disputes. If the creditor fails to respond to a dispute investigation the item is deleted automatically. Other then that, it stays on your history.
But by doing the other things that DaMan mentions, your credit will start showing improvements fairly soon. Not great, but it will help.
Jenny asks…
How do you fix bad credit?
This is very important so please give me a straight answer. None of that “the best way to not get bad credit is to avoid it” junk. I know that but it’s not going to help if I already have bad credit. So please tell me if there’s any way to fix bad credit. Please. Please. Please 
Credit-Repair-Guy answers:
If there are errors on your credit reposts then ask they be deleted with the bureaus. Correct info is going to stay there for 7.5 years to come.
Why shouldn’t it that is suppose to indicate to future creditors how responsible you are with past debts.
Helen asks…
How do you fix bad credit when you’ve never had a credit card?
I have 3 different medical debts, and only 1 phone bill that’s on my credit report as bad credit. I’ve never ever had a credit card, and other than these 4 items i’ve never established any kind of credit. My debts total less than $1,800.00. I don’t make much money, and i’d like to at least start paying off my debts all together in one payment. Is that possible and if so, HOW? Please help!!!
Credit-Repair-Guy answers:
A collection is a collection, paid or not. Paying these debts will restart the date of last activity and will prolong the time that they stay on your credit report. Ex – if these collections are 3 years old, they are schedule to fall of in 4 years (2011), if you pay them now the 7 year clock restarts due to new activity and they will stay on your credit report until 2014.
The damage is done, why prolong it.
Start building credit. Get a credit card, make normal purchases (gas, food, etc…) and pay the balance in full every month. You will increase your credit score.
Donald asks…
How do i fix bad credit?
I have the worst credit in the world. I want to fix it but don’t know how to get started. Any ideas?
Credit-Repair-Guy answers:
You do not fix bad credit, you re-establish good credit.
Start with 2 credit cards and charge everyday things be careful never to exceed 30% of your credit limit and pay in full before the due date.
This should raise your score at least 100 points over a 24 month period.
Then you can start on your installment credit with a car, furniture or personal loan.
John asks…
IS anyone familiar with this strategy: Using a credit card prudently to fix bad credit?
I heard once that getting a credit card and making payments faithfully from month to month improves credit. Is this true, and if so, how can I go about doing this?
Credit-Repair-Guy answers:
It’s very simple actually, I have 3 that I use every month for just about everything I buy and always pay them off in full before the due date. I have done this for the last 2-3 years never paid a penny in interest or fees and made several hundred dollars in cash back rewards and raised all of my scores to well over 800.
Not bad for using someone elses money for free.
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Your Questions About How To Increase My Credit Score In 6 Months
Susan asks…
how can i increase my credit score from0 to 700 in 6 months?
ive never had credit cards or loans before but i kept on applying for credit over the net, and kept getting refused, my score is now 0 and that really worries me as im 27 and would like to buy a house when im in my 30′s,
Credit-Repair-Guy answers:
I do not know of any method that can have your credit score jump from 0-700 in 6 months. A major factor in credit scoring is the length of time one has taken to develop their credit. You can begin building your credit so that when you are in your thirties you may be able to purchase a home. It is not unrealistic to possibly reach a score of 700 by the time you are in your thirties.
If you have poor or no credit history and want to have a credit card, the best option to start building credit would be applying for a secured credit card. Secured credit cards work just like an ordinary card, but secured by a deposit account owned by the cardholder. To apply for a secured credit card, the cardholder must first deposit 100% to 200% of the amount of credit desired. This means that if the cardholder deposits $1000.00, he or she will be given a credit that range between 500 – 1000 dollars. Secured credit card deposits are held in special savings account.
Secured credit card holders are expected to make the regular payments agreed upon, just as you would do with regular credit cards. However, if the card holder defaults on a payment, the credit card issuer can recover the cost of the credit card holder’s purchases by taking money from the deposit.
When you are using secured credit card it is best that you pay on time and avoid having the credit card issuer to take money from your deposit. This is because credit card issuers will often upgrade your secured credit card to regular credit card after a few months of making payments on time.
Another way to obtain a credit card is to establish a credit history. To do this you must apply for a small loan or a line of credit from your bank. Getting a loan can be difficult. You can increase your chances of getting your small loan approved by making a large down payment. If you do not have cash, borrow from your parents or family member.
Another way to establish credit history is through gas cards. Gas cards are fairly easy to get and a very good way to show that you pay your bills responsibly, assuming that you pay every month or before the established payment date. Avoid being rejected by credit card issuers. Apply for a credit card with requirements that can easily meet the requirements.
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Mandy asks…
How do I increase my credit score?
Five years ago I left an unpaid bill of 30$ before I moved to a different country. Upon returning, that $30 bill became $800 and it was immediately paid off. However, my credit score went from 780 to 580.
How can I increase my credit score to at least 650 in the next 6 months?
Who would I call? Should I get a lawyer involved?
Please note, I have no debt on my name right now.
Credit-Repair-Guy answers:
You want to have one revolving credit card and one secured loan. That will resurrect your credit. Also, do not pull your credit a lot of times- that will hurt your score.
Also, when you get your credit card- do NOT charge more than 50% of the limit- by doing so you will get a credit score alright- a low one and then it takes a while for it to go back up.
Go to creditcards.com and apply for a small credit card.
Also- go to www.annualcreditreport.com to see what’s on your credit- every American gets one free credit report each year.
Joseph asks…
How to Increase my credit score?
My score at Equifax is 723
My score at Transunion is 738
My score at Experian is 739
Question:
I plan to get a job in bank industry that require to check my credit score, how they going to calculate my score if my score is diffrent in 3 credit bureu. My employer require my 800 score to get a job
they will get score from 3 credit bureu
Question:
How to Incrase my credit score
Currently as a positive factors are
-The proportion of the balance to credit limit is 4% (total credit limit of $18,000)
Citi-$12,000
American Express- $6,000
-The presence of bank/national revolving credit has been estabolish
-You are using relativly low balance compare to credit limit
-You have never been late
Current negative factors is:
-The lenght of time your account has been estabolish is relatively short
First account open 14 month ago- Credit Card- Citi
Second account open 3 month ago-Credit Card- American Express
-I have never been late with any payment
-Pay in full each month
-no inquire (hard cover inquire) within last 24 month
-no collection
-no public record
-no garnishment or other negative factors
Question:
It is ok to “load with a debt” for $5,000 and pay it with 12 month period( with intrest) to increase my credit score?
Any suggestion ,comment, welcome!
Credit-Repair-Guy answers:
Fair Isaac (www.myfico.com) has a calculator that allows you to figure out how to increase your credit rating by tweaking several factors:
- paying off part of or all outstanding debt
- decreasing the ratio of balances to credit limits
- decreasing the number of inquiries into your credit histories (more inquiries decreases the score
They will analyze each of the positive and negative factors and provide recommendations on how to improve your score. Also take a look at these articles for some tips.
Actually GUS is right — only 1% of the population has a credit score of 800 or above. “And do you all think they work at this bank?” GUS asked. Funny!!!
James asks…
How long with it take to increase my credit score?
I have a credit score of 489. I’m a 19 year old college student. I believe it is so low because I applied for about 10-15 credit cards and just kept getting denied because of limited credit history. I finally got approved by Capital One Journey for $500 in April of 2011 and have paid in full each month and after 6 months they bumped my limit to $750. Since then, I have gotten another credit card with Capital One ($750 limit) and have only paid interest on it for one month. I also had gotten approved for a Citi Dividend Card with a $1,200 limit but only applied because of the 0% 7 month Intro APR to pay for school books. I currently have $2,700 in credit between the 3 cards and owe around $350 that I plan to pay off in the next few months. I work part time and bring in around $900 a month. I was really surprised to find out my score was this low. How long will it take me to get a good score and am I in bad shape financially?
Thanks for the help. Very much appreciated. The only reason I got the second Capital One Card was because I didn’t want to utilize over 30% of the available credit on the Capital One Journey if I needed to use it. I don’t use this card often because of the high interest rate and there is no reason to use it if I don’t need to if I have my own money. The Journey I only use for gas and pay the bill in full each month which is usually around $100.
Credit-Repair-Guy answers:
Have only one card, pay for in full all the time or as close to full as possible,
ditch the Capital One card. That just says you’re a loser with bad credit. For real, I’m don’t mean to insult you, but seriously its a lousy card. You said it yourself, high interest rates. They send me their crappy offers all the time. I’m quite irritated by it. Don’t get Discover or AMEX either. AMEX has been giving me one crappy offer after another, 3 times a month, for 7 years. I’m sure it’s cost them more to try and make me a customer than they make in fees off some deadbeat in 10 years. Luckily Discover has decided I’m too good for them. Thank god they don’t send me much, my shredder can’t handle so many offers. (if you don’t want the offer you need to shred it, unless you want someone to steal your identity)
it takes about 24 pay periods (or at least 12 months) for you to establish a decent history of being trustworthy with money. So that could be 1 card and 2 years of great records or 3 cards, 36 payments (if applicable) lasting at least 1 year. Alternatively you can get just one card, put $350 of charge on it every 6 months (pay for it in full each time) and establish a good, risk free (for you) credit score that way. Having no statements is just like as if I you paid for it in full every time.
Increase income, decrease (proportionally) expenses. Might not be realistic for you. F/T students can’t also be F/T employees. There’s a law about that somewhere in th vast mess that we call the Dept of Labor. But if you can make more money, even only increasing your income $800 more /mo but expenses stay the same, you’ll look much more favorable to any credit company, since you show that you have better means to pay a loan back.
Establishing a saving account with a steadily increasing balance is another way to show that you have the means to take on a larger credit line. But not all credit companies can see that. Generally only banks that offer credit cards can see it, perhaps its time to get a Citi savings account going.
When’d you get a credit card anyway? Before or after late summer 2008? That could make a big difference in your credit rating/score. Before 2008′s financial crisis credit was as easy to come by as water. They were dishing out credit to people that had any means of steady income. Even a bum could get a $500 credit card. (this is how the financial crisis started)
those of us that got a credit history & credit line going prior to 2008 were given fat credit lines that often exceeded our means to pay it back. And the few who didn’t get themselves into trouble by spending too much are now probably benefiting from their previous very good credit history. Credit card companies don’t usually terminate cards or reduce credit limits to good customers that pay on time, every time. People who had huge lines from before 2008 still have them now. And it doesn’t impact their score either. Their score has probably been boosted since they have a big line, use it wisely and able to pay it off every time on time.
Those who got credit histories going after 2008 has fallen under much tighter controls and reviews. They don’t hand out credit willy-nilly to anyone any more, even if you have done well and proven to be trustworthy you score will not climb as it did before for some of us that had good credit prior to 2008 and maintained it. So I suppose stuff just takes time.
————-
I had a credit card since I was 16. My parents co-signed to allow me to get it. Offered by first national. Low interest rates (this already beats anything Capital One or AMEX has ever sent) and I purposely requested a very minimal limit of $250. It’s been raised involuntarily to $500 later on, I don’t mind, I suppose things charged and $250 was too small? Anyway in these 7 years I probably only charged $25 to it ever. To my surprise shortly after I turned 18 and I didn’t even have steady income, my bank, Bank of America offered me a credit card with of $3000 credit limit. They must of seen the thousands I had been piling up in my saving account, I never did anything that incurred as fee so I suppose they wanted me to do something so they can make money off me. Well I practically never used it until 2008, only charging no more than $150 every now and then, paying it back immediately (as in next day) and had only 3-4 statements of every year (that’s 8 pay periods with no activity).
Helen asks…
How to increase my credit scores in 6months to buy a home?
My credit score is 545 I have a couple of collections, medical bills and a couple of other things which our mines that I have to pay. My brokers says I need my scores to be at 610 before he can help me get a mortgage. My lease is up 1/31/09 which I know I will have to go month to month. He informed me to talk with a credit counselor which is gonna cost me. Now I know I have to pay whats on my credit, other than that does anyone have any suggest that I can do to raise my scores within 6 months. I have collections on my account which shows paid, can I get that taken off my credit report even tho it says paid with a zero balance?
Credit-Repair-Guy answers:
The the collection accounts will drop off of your account after 7-8 years. The only way to get them off early is to dispute them yourself or pay some to dispute them for you. If you need a recommendation, let me know.
If you only have 6 months, i’d pay off the collections accounts now. Your score will actually drop initially but should rebound.
Also, paying down your credit card balances below 50% of the limit will improve your score more than just a few points. If you have several cards with high balances this might be the only thing you need to do to get your score up to your goal. Actually, your goal should be 620, not 610. Depending on how much home you are looking to buy, an FHA loan would be the loan to target. FHA does not have any penalties for a 620 score. Conventional loans will cost you over 2% points (2% of the loan amount) in fees with a credit score at 620.
One other trick, if you do have high balances on your cards and cannot afford to pay them down, try getting a (installment) loan to pay them off. Installment accounts do not take into consideration the balance. There are several peer to peer lending website now that are very reputable. Try Prosper.com:
http://www.prosper.com/referrals/all.aspx?referrer=Bankofbernie&utm_source=referrer-Bankofbernie&utm_medium=referral-button&utm_content=all_light-180×150&utm_campaign=referrals-all
I wrote an article on peer to peer lending if you want to check it out:
http://www.mortgagemagnifier.com/tools/alternative.asp
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Categories: Improve Credit Score Quickly Tags: Cardholder, Credit Card Deposits, Credit Card Holder, Credit Card Holders, Credit Card Issuer, Credit Card Issuers, Credit Cards, Credit History, Credit Loans, credit repair, credit score, Credit Scoring, Guy Answers, Length Of Time, money, Secured Card, Secured Cards, Secured Credit Card, Thirties, Time One
Your Questions About Raise My Credit Score
Maria asks…
To raise credit score should i pay off credit card immediately or stretch out payments over a few months?
I don’t have debt by any means, first and foremost. I am just starting to live on my own and build my credit and stuff. I got a credit card to help me do that and right now my balance is around $600. I can easily pay this off in one month and not think about it again but i heard that won’t raise your credit score any. Someone told me that it is good to leave some balance on your credit card. So, I was wondering should I stretch out the payments over a few months? I would like educational answers only please. I want to do whatever is best for my credit score.
Credit-Repair-Guy answers:
People think that having a balance raises your credit score becuase it records “payments” each month.
But that’s not true. The only thing that a credit card reports is if you are “current”, “30 days late”, “60 days late,” etc.
Having a 0 balance and thus no payments is the same as being “Current”.
Also, that balance should be below 33% of your limit– so if you’re above 1/3 the limit (like if this was a $1000 card) you’d be helping to pay it off.
Charles asks…
How do you raise credit score on a low-limit card?
I am on my first credit card with a $250 limit. I read that having a balance of no more than 30% each month would raise credit scores, but my dad says I should spend more since it is such a low limit. Is the 30% percent rule still true for low-limit credit cards?
Credit-Repair-Guy answers:
First you have a low limit credit card – if you just charge 75.00 a month – and pay 75.00 a month, and you always pay double the minimum payment – they will be inclined to raise your limit (usually double each increment) This can only happen if you buy something that costs more than 250.00. You have to be able to accept it if your purchase authorization comes back NO. If you’ve been good, for at least 6 months – you can expect the limit to rise, by increments.
After one year w/this CC – apply for another account. You can do this every six months, and that will raise your limits.
Laura asks…
If something on a credit report has been charged off, does it raise Credit score if they are paid off?
I have a few things charged off on my credit report from when I was 18 if I pay them off will it raise my credit score?
Credit-Repair-Guy answers:
When something is “charged off”, that means the company you owed money too has done what they can to collect from you, without success. So they have used thier insurance and/or resources to cover what was owed to them by you.
So now the bad credit is on your record, but the companies books have been cleared of your unpaid bills.
If you now have the money to pay this bill off, you should have been sent several demand letters from whomever the company you owed the money hired as a collection agency. This collection agency should have all of thier information on how to contact them and what was needed for you to pay this bill off.
If you do not have this money, you can contact the billing center at the company you originally owed the money too and ask them what collection agency they use, or used in your case. Sometimes companies use different collection agencies for different parts of the country.
Once you have the collection agencies information, contact them and tell them you are now able to pay off this charge. You will need your account number(s) and other information from the account(s) you had owed on.
If they still have you in their system, then they can process your payment on this account. You will have to stipulate to them that you will require a signed and notarized letter from them, so you can clear your credit record of this charge. You will need to contact all three credit bureaus (if you are in the USA) and get the address of where to send the copy of this letter, so they can remove the negative ratiing from your credit record.
But….since this was already charged off…….if the collection agency has already charged this off of thier records, you might not be able to get anything done about it.
Donna asks…
Add my wifes to my credit card to Raise credit score will it bring mine down?
my wife and i just got married and we need to raise my wife credit score, i’m tu 670 ex 682 eq 690,if i but her on my credit cards
will that raise her score? will it bring my score down?
she is on the 592 on all of hers
Credit-Repair-Guy answers:
Not too sure what that 1st answer was, couldn’t understand it.
Adding your wife as an authorized user will place the account on her credit report. As long as you pay on time and keep a good history, then your score will not be affected at all.
She is however, not responsible for any debts and does not have to pay if you default. It will hurt her credit, but you have to pay.
Hope this helps answer your question.
Helen asks…
Will my student loan help raise credit score from bankruptcy?
I filed a bankruptcy in 4/09 and I want to start re-establishing credit. I still have my federal student loan on my report, will this help? Or will I need to get a credit card?
Credit-Repair-Guy answers:
No. You will need to get a loan (i.e. Credit card or auto loan).
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Your Questions About Repair Bad Credit For Free
Maria asks…
Is there any place to get FREE credit repair advice?
I don’t need someone to DO anything for me, just give me advice on what ~I~ can do to improve my credit (ie: should I file bankruptcy?) My credit report is NOT inaccurate, it’s just bad!
OK, maybe I used the incorrect term in credit “repair“, as I said, my credit report is NOT inaccurate. I am looking for advice on how to “rebuild” my credit.
Credit-Repair-Guy answers:
Making the decision to file bankruptcy should never be based on someone elses opinion.
As far as learning your rights in how to deal with collectors, CRA’s, etc. And learning about bankruptcy (how to file, what is needed, how it will affect you, etc) there are a few free credit discussion boards that you can do some reading in and ask questions that you may have. (never use a site that requires payment for “any” information they offer)
The best two free credit discussion sites on the web are:
creditboards.com
creditinfocenter.com
Robert asks…
How can I get a business start up loan on bad credit?
Im 20 years old. Tired of working 60 hrs a week for a company who couldnt care less about me. I want to be free of this, and start my own ethical business. I am a great computer technition. I want to open a computer repair shop, but i have bad personal credit, due to a few missed payments. What do you recommend for me to do, to get a business loan with my type of situation.
Credit-Repair-Guy answers:
Dear Friend,
You have bad credit, so it is very difficult to take a loan may be other bank can help you. In this situation you friends or family members can also help you.
You can do one more thing to start your independent business. Just make contact with small business people like school administrator, collage administrators, coaching centers, computer hardware shops, computer software shops and small companies who use computers in their work and offer them your services in competitive price. Work for them as a contract basis not time basis. Give them your contact number when they need you they can call you. In this way you start your business and grow you clientele without any investment.
Steven asks…
How do I fix my bad credit?
Okay, I didn’t know I had an outstanding credit card bill that has been charged off for some reason. I am suspecting an ex girlfriend has signed up for a credit card using my name. fyi I had chose some really bad & devious girlfriends in the past…and I have learned from that. Then I find out I had a fraudulent loan and also a student loan I had problems paying for. So my credit score is less than 600. There are so many sites and stuff. Tell me which site or organization that helps repair my credit…preferably for free or minimal costs. I would greatly appreciate it!
Credit-Repair-Guy answers:
There is no legit way to fix bad credit overnight or ANY length of time less than 5 YEARS, unless there are inaccuracies on your credit report to begin with. Good credit takes YEARS to obtain. The ex gf’s is a non-factor UNLESS you can prove they committed fraud AND you press charges against them AND you win. The only thing you can do now is pay your bills on time….which is 100% free. Those sites are scams.
Mary asks…
Too much credit debt … Should I use a credit repair service?
My CC debt is very high (>$30K), and the payments are getting too high. I have a great credit rating, but I can’t keep up with high payments for the next 20 yrs. Should I use a credit repair service to negotiate the debt down, and make payments to them? If I do, they say I could be debt free in 36 to 48 months. What are the risks involved other than a bad credit rating for 3 yrs?
Credit-Repair-Guy answers:
Two points to make here. First, a credit repair company does not negotiate your debts. That is a debt consolidation or credit counseling company that does that kind of work. The credit repair companies fix the damage that the other two companies will do to your credit reports.
Second, the credit counseling type of businesses are good to use for many people. Most people don’t know what their rights are under the law and will just allow the credit card companies to dictate terms to them. For example: did you know that you have the right to change the terms of your contract with the credit card companies? I will bet that 99 of every 100 people who read this answer will say they did not know that you could. That is why people use credit counseling companies; because they just don’t know the laws. It is because people don’t know how the laws that are written to protect them work, that the credit card companies can get away with doing what they do to us. They put men in jail for doing that to women, so why do we allow the credit card companies to do it to us?
One other thing, you will have a bad credit rating for up to 10 years if you use a standard three year repayment plan that the credit counseling companies use.
I am not telling you not to use them. You have to determine for yourself whether or not the cost is worth the benefits. Just understand, most will promise more than they can deliver.
If you have any further questions regarding this or any other credit issues, please feel free to contact me at nebula7693@yahoo.com
Mark asks…
Help! I want to repair my credit.?
My credit score is bad and I would like to buy a home. I got a credit report, should I start making payments on the companies that were on my credit report or do I have to call them up to make payment arrangements? Please help. I can’t get anything in my name and I am soon to be married which I know will effect my fiances credit. Any advice? Is there any services that help you for free? Websites?
Credit-Repair-Guy answers:
To boost your credit score:
The first thing you will need to do is call the three major credit reporting agencies and request a free copy of your credit report.
Www.equifax.com
www.experian.com
www.transunion.com
Then once you get those in the mail (7-10 days) there will be a dispute form attached to the reports. Fill those out for every negative account on your report regardless. Fax, mail go online whatever it takes to get those submitted as quickly as possible. Then those companies must answer your dispute within 30 days or it is removed from your credit report completely. So that will eliminate some things, hopefully.
Then make sure you pay all your revolving accounts to below 50% of your credit limits.
Make sure that you make all your payments no more than 20 days from the date it is due.
Good Luck!
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Categories: Improve Credit Score Quickly Tags: Business Loan, Collage, Computer Repair Shop, Computer Software Shops, Computer Technition, Cra, Dear Friend, Discussion Boards, Ethical Business, Free Credit Repair, Free Credit Repair Advice, Great Computer, Guy Answers, Hardware Shops, How To Rebuild My Credit, Independent Business, Personal Credit, School Administrator, Should I File Bankruptcy, Start Up Loan
Your Questions About Repair Bad Credit Quickly
Robert asks…
How do I quickly repair bad credit?
Credit-Repair-Guy answers:
Need more information to answer.
What kind of ‘bad credit’ is it?
Medical debt?
Student loans?
Unpaid credit cards?
Late pays?
I guess the easy answer is to pay your debts off. When contacting the companies to make pay arrangements, ask for pay for delete
Linda asks…
I have bad credit and need to buy the home I’m renting. How can I buy it?
The Owners of my home are also in a bad way and putting it on the market and are offering it to me first. I have struggled trying to stay working the last five years (unemployed 20 mos. of last 5 yrs) and it has wreaked havok on my credit. I am working more securely now, but I need to purchase quickly. Other factors – houses are not selling in my neighborhood and remain on the market – one like mine has been for sale over 18 mos., many are vacant and for sale.
I would really like to finance in spite of my bad credit as the security of ownership would bolster my ability to repair and rebuild my credit. I am a single father with custody of 2 schoolage kids and a first time buyer.
Credit-Repair-Guy answers:
This is a tough one, but here is a suggestion.
First I assume the owner has a loan that has a due on sale clause and cannot be assumed. Try these first if possible.
Next thing if you work at it you can do this. It might be a long shot with each person, but you will eventually find someone willing. You need an investor. This isn’t something like finding one in a thousand like it might seem. A lot of people, at least 1 in 10 or 20 invest in real estate. So every community has a lot of investors. You are going to set up a deal that is too good for them to pass up and then show it to 25 people and one of them will go for it. Put an ad in the paper in the investor section something like invest in this lucrative real estate deal and you will have your phone ringing off the hook of people to try it out on.
Here is what you want to happen. They will buy the house from the current owner, and they will lease option the house to you. Since the market is poor in that area you should be able to get a good deal. Keep in mind the reason they offered it to you first is so they can sell it for more than it is worth and avoid a commission on top of that. So any price they offer you will likely be way more than they need. Unless you are dealing with abnormally nice and fair people.
So lets assume the house is worth 90k to 100k for the illustration here. The range is if you want to sell it quick or let it sit a while on the market. Although the range might be larger the way you describe the area. My guess is the 18 months on the market is one house with a problem that the stubborn owner denies.
First you need to be able to negotiate with the current owner. They can sell the house fast with an agent for 90k, of which 82k is what they get, 5400 commission plus 2600 taxes and closing fees. So you can offer 90k-5400 and it will be the same for them. They have to realize this is true so take time to explain it. If they agree that they would sell it for that then you would do best to put an offer in writing and write in the buyer as “your name and/or assigns”. The “and/or assigns” means you can assign the contract to someone else. The investor you will now search for.
You will need more time than average to close, which might trouble them(might need to raise the price a bit). Or, you may need to add something in the contract like this contract is void if the owner happens to find another buyer willing to pay at least $90k. This way they can still try to sell it while you put the deal together. They will get to keep your earnest money as well if you fail to buy the house, so put as little as they will take, but it does need to be at least $100 or so to be considered a legal contract. You might also add something like more earnest money, to the tune of $100 will be handed over each month to keep the contract good for up to 90 or even 120 days if they will go for it.
Now you will try and find an investor. It has to be a good deal for them and of course you would like it to be a good one for you. Part of your pitch will be that you are trying to split the good fortune and that since you “found” the deal you want some of it. So they are going to buy the house for the contract price you negotiated of 84600. Then simultaneously lease option it to you to buy it for 100000 in three years, or however long you think it will take you to save up enough money and build up your good credit to buy a house. Presumably the house will be worth more than 100000 or you need to lower your price. Be sure this option contract gets recorded along with the other papers.
The lease part of a lease option works like this. You rent it for say 800 a month now, assuming this is market rent you will start renting it for 900 a month and 300 of that goes towards your down payment (all negotiable of course). So if you end up buying it you only pay 600 a month rent. If not then you paid 900. Good for both sides. You will also agree to handle all repairs that cost less than $100 or some other number. This is so the new owner gets few or no calls from you, and you take good care of it cause you plan to own it some day. So at the end of 3 years you have 300 * 36 or 10800. So you actually buy it for 89200 in 3 years after your credit is good. Hopefully you can get a loan then.
The option part is an option to buy. You have to pay them something up front for this. The will want it to be like a good down payment, you will want it to be a minimum $100 or so to make it a legal contract. You will want to put a renew option to add another year at the end just in case you find that you are still having credit trouble and need time to set up another investor. It would just be something like the contract can be extended for one extra year if you pay $500.
You might be able to get them to finance some of it too, like agree to carry a second mortgage of 8000 so buy the time you buy it you only have to borrow 80% of the loan from a bank or mortgage lender, something they will look favorably on.
This will be a major undertaking, but you will get your house if you decide to.
Good luck.
Helen asks…
I really need to get car finance to get out of my dreadful car but i have bad credit. HELP?
So i currently have a loan with esanda who I am not happy with as they have treated me like crap, I have been with them since 2004 and have gotten stuck on my payments as I am constantly paying for my car to be repaired as the tires wear very quickly due to a bad cambre on the back. I can no longer afford to constantly have the car fixed from all these issues and pay it off monthly. I still owe 20000 on the car and need to get out of this car and into a new loan with a different company. Heres the problem, I have applied everywhere under the sun in my desperation but because I have 3 paid defaults and 1 unpaid default no one will even look at me for a loan. The unpaid default is because I cannot find the people that listed it and I dont know what it is for so I will not pay it until i have more details. Can anyone please help me get out of this situation??? I am stuck in a rut and need some help desperately
Credit-Repair-Guy answers:
Unless you have a co-signer, you’re screwed with your current rig on the loan front. The options you have are as follows:
1. Get a co-signer and refinance
2. Do a voluntary repossession and pay the remaining loan
3. Keep paying them nothing and have your car repossessed
4. Get another job that will give you enough income to do the major repair that keeps costing you for the little repairs
Frankly, option one is great for you but likely to hose your co-signer (make sure it’s not someone whose friendship you’d like to lose). Option 2 sucks because you’re without a car unless you go to a “guaranteed credit”…errr…ripoff car lot. Option 3 will be a major scar on your already terrible credit but will last longer. Option 4 is your best bet. Suck it up, get another job, donate plasma or other biological goodies, whatever it takes.
If you successfully pull off option 4, swear to yourself that you’ll never take out such a big loan again.
By the way, of the millionaires in the country, the ones who bought inexpensive used cars were three times richer than those with similar incomes.
Charles asks…
What are my options for dealing with a homeowners insurance company I believe is acting in bad faith?
We filed our initial claim on November 20, 2010. We complied immediately with all requests for information. Beginning January 3, 2011, our agent has repeatedly told us that the check will be going out next week. Every week it’s the same story. The personal property claim was very cut and dry. They have no dispute as to whether the items claimed are covered (per his own admission). What would be the best course of action at this point? I live in California. File an RFA? File a complaint with the Insurance Commissioner? Hire a lawyer? I’m looking for the best way to quickly recoup our losses since we had to pay for much of the construction/repairs on credit. Thanks!!
Credit-Repair-Guy answers:
Hiring a lawyer is the LAST thing I’d do.
The first thing, is to talk to your agent, and lay it out. I’d be very tempted to just sit down in their office, ask them to call the adjuster in front of you, and ask for the date the check was cut, and when it’s expected to be mailed. It’s been six weeks, and you keep hearing “next week the check is going out”. I’d strongly suspect that the agent is just slacking off on this.
Next, I’d call the adjuster. Tell him the agent’s been promising the check “next week” for the past six weeks, what’s the deal. You can also talk to the adjuster’s supervisor. I actually had a claim where the adjuster went out on maternity leave, and there were a half dozen files left on her desk, that NO ONE took over. Oops.
You don’t really have a bad faith claim at this point in time – no one has denied coverage, they’re just not acting in a prompt and timely manner. You could file the complaint with your state insurance commissioner, but you might get faster results seeing the agent face to face.
John asks…
Would you use student loans to pay off credit cards?
I have massive credit card debt for a 28-year-old (over $20,000). I’m starting a PhD program this fall, and I keep telling myself, “just get through school, then you’ll have a job that pays you enough to pay off all of that debt.”
I made the decision to enroll too late to get funding (most PhD programs are paid for through scholarships, teaching classes, etc.). So for the first year I applied for student loans. I just found out they’re offering me enough (over 2 semesters) to pay for my tuition AND pay off my credit cards (they do this with the idea that PhD students don’t have time to work full-time jobs and need extra to live on).
Reasons to do it: The interest rate will be lower (MUCH lower, like 4% compared to 28% on some of my cards), and the federal loan people are really good about working with you when you have a financial hardship or any other issue. My credit is barely hovering above “bad,” and it could start repairing itself while I’m in school.
Reasons not to do it – That’s a whole lot of student loan money. I still haven’t paid off my loans from my bachelor’s degree. I don’t have to accept all of the loans, and I could accept the bare minimum to get me by in school.
But the debt will be mine either way, right? I’ll have to pay it off whether it’s on CCs or on student loans, and can probably do it more quickly with student loans since they won’t be destroying me with interest.
It would be so nice not to think about those stupid CCs anymore.
Opinions?
MVD – I understand what you’re saying. Here’s my thinking – if I were going to declare bankruptcy I would have already. I’m pretty committed to just paying off these cards. My parents declared bankruptcy and I know it cost them a lot of money (ironically) in lawyer’s fees, etc. I’m not in a position to do that and won’t be for a long time.
If I take all of these loans, yes I’ll have a lot of student loan debt but still less than the national average for someone with 3 degrees. My friend accrued over $100,000 by the time she was done!
The other problem is, I’m so close to the limit on most of my credit cards that I keep incurring fees. Not to mention I pay about $300 in interest EVERY MONTH. I’m drowning, and it will be a few years before I’m actually able to pay more than the minimum on these things.
If I’m ok with knowing I’ll have to pay it all off eventually….don’t you think it makes sense?
Credit-Repair-Guy answers:
Step 1: Put your credit cards in a container of water in the freezer (just kidding) – Cut up the ones that are the highest interest rate – put the other ones away… Then you can use for emergencies
If you’re a student and you’re not working then you know exactly how much money you have for each year. What I would do is take how much money you have available… Say its 20 000 for the year (for each year of your PHD). Then minus off your fixed expenses for the year … Tuition, books whatever. Then take what you have left. Say its 12 000 for 12 months.
Then figure out your monthly budget.
Say your rent or housing cost is 500 per month… That gives you $500 left. Figure out any other monthly expenses (minimum payments on CCs, phone bill etc.). Perhaps transfer the projected money you will have left over each month (Say $100) to a savings account (so you can access it later in the month if necessary). Then, at the end of the month, if you have that money still left over (after food costs etc.), pay it towards your Credit Cards. You can make more than one payment to your credit card each month so it won’t matter if you split it up into 2 (try to make the second payment before the payment deadline for that month).
I really wouldn’t pay it all at the beginning because you could end up stuck later.
This way you will still be making payments to your cards – it wont be all at once but at least it will be something and should some unforseen expenses arise you won’t be in limbo. If it’s not a year round program then get a job in the summer and work like crazy. Put half of your paycheques in a savings account (or separate bank acct whatever). Then the next year repeat the same process.
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