ForeclosuresMass - ForeclosuresMass Monthly - Interview With The Expert

Getting the approval needed for an investment loan is heavily dependent on your credit score. Unfortunately, if you have "bad" credit, this can get in the way of making a purchase.

With that in mind, we contacted credit score expert Marty Eerhart - a senior loan officer with Assured Mortgage and a recent speaker at a ForeclosuresMass Turning the Key event - and spoke with him about credit problems and what you can (and can't) do to fix them.

ForeclosuresMass Monthly: Welcome Marty, and thanks for taking the time to speak with us. First question: What determines my credit score?

Marty Eerhart: Your credit score is actually a computer-generated, composite number. In rough percentages, your score is a function of: Payment History (35%), Amounts Owed (30%), New Credit (10%), Types of Credit in Use (10%) and Length of Credit History (15%). Taken together, these add up to 100% of the score you are given.

* Next 37 17 investors only!

FMM: You mention that payment history is the single biggest determining factor (35% of my total score). Given that, if I pay off my past due accounts, will that improve the number?

ME: Not by itself. The problem is that while paying your debt is always a good idea (there are only three ways to get out of debt in the United States - pay, go bankrupt or die), doing so only shows that the debt is paid. It doesn't improve your history of bad debt, which from a credit score standpoint is what really matters.

FMM: I see. In that case, how long do negative items remain as part of your history?

ME: This too is a source of much confusion, and there are all sorts of varying "expert" opinions on this issue. In fact, the law clearly states that an item can remain for seven years after last date of report before removal (10 years for certain bankruptcies). You can see for yourself by checking the Fair Credit Reporting Act 15 USC C section 605C.

FMM: There seem to be a lot of people and organizations out there that claim to "repair credit." Is that legitimate?

ME: To tell you the truth, most are scams. Offering to start a new credit file for example, by recommending that you get an employer identification number to divert attention or something similar, is illegal, and something you should stay away from.

Keep in mind however, that if you have an item on your report that is inaccurate, obsolete or unverifiable (as opposed to something that legitimately reflects your past history), than yes, absolutely, you have the right do dispute that.

FMM: In those situations, how long do the credit bureaus have to respond to a dispute?

ME: Here again, the Fair Credit Reporting Act is your best guide. The Act states that the bureaus must respond in a reasonable time period. That's usually 30 to 45 calendar days.

FMM: One last question and then we'll let you go. What about consumer credit counseling as a means for repairing my credit?

ME: In practice, most credit counseling services are affiliated with creditors. Their goal is to work with you to pay off the debt. But they have nothing to do with the credit bureaus. So again, pay off your debt, but understand that this won't "repair your credit."

Also, you should be aware that if you are in an active credit-counseling program, a lot of lenders view this the same as being in a bankruptcy Chapter 13! Both are an agreement/promise to pay off your debt.

Marty Eerhart is Senior Loan Officer with Assured Mortgage in Pawtucket, Rhode Island. Contact Marty at his cell phone at 508-294-8359.

Did you like this article? You May Also Like:

	Technology: Leveraging Technology To Maximize Success Jay Case Consumers are doing more and more business through Internet sites and e-mail. They also are more plugged in to mobile devices, relying on their cell phones, pagers, PDAs and other gadgets to keep them connected business associates...
	Success Strategies: Seven Traits of Highly Effective Investors James A. Gage We all know about the late night talk show gurus who promise you can become a millionaire overnight. Yet, as James Gage explains, successful investors practice seven traits most "gurus" don't talk about. Read his article to learn how you can turbo-charge your investing business - and go to sleep earlier at night.
	Success Strategies: What Banks See When They Look at Your Credit File Tammi Koza and Carl Phinney, Family First Mortgage Corp. Most people know the credit score is the first thing the bank looks at when reviewing a credit file, but did you know lenders also look at a host of other data? In this article, Tammi Koza and Carl Phinny explain why you need to view your credit file the way a bank does if you're serious about investing in real estate.
	Feature Article: Contacting the Homeowner Sheila Farragher-Gemma, ForeclosuresMass, Corp. All of your new foreclosure data has been downloaded and you're ready to contact the homeowner. Before you establish contact, there are some things you should know...
	Nothing Succeeds Like Success: Jeremy Cyrier Jeremy Cyrier, The Cyrier Sales Team After learning that he netted $60k on a house he owned for just six weeks, we wasted no time in scheduling an interview with Jeremy Cyrier. Read our interview and find out what he's done to be so successful.
	Feature Article: How Effective Networking Helps You Close More Deals Susan LaPlante-Dube Motivated buyers. Motivated sellers. Real estate investors. Home improvement specialists. Home inspectors. Electricians. Appraisers. Bankers. Mortgage Brokers. Real estate attorneys. The list of people you need to run a successful...
	Feature Article: An Educated Investor is a Smart Investor David Offut, Exit Realty Plus As a real estate broker and investor, I know how important it is to have a finger on the pulse of the investment market — especially when it comes to investing in foreclosed properties. Knowing the foreclosure process inside and out is very important, especially knowing how foreclosure laws differ from state to state...
	Success Strategies: Buy It if It's a Steal Lisa A. Maini There's plenty of real estate out there and no shortage of people offering advice on how to find it, buy it and sell it. Marketing expert Lisa Maini gathered together an all-star cast of real estate experts, picked their brains, and distilled what she learned into this one, meaty article...
	Nothing Succeeds Like Success: Brian Jones Reveals His Marketing Strategies Brian Jones Looking for new ways to market yourself as a real estate investor? Brian Jones, who closed five deals in 2006, shares some of his strategies - including classified advertising and contacting junk removal companies!
	Financing for Investors: PMI - Back to Basics Jeffrey Chalmers, Real Solutions LLC Now that the heady days of go-go market are long gone, lenders have tightened lending guidelines - and have reinstated PMI, or private mortgage insurance. But as always, you can find ways to beat having to pay PMI. Mortgage expert Jeffrey Chalmers explains how to cut your PMI costs - and even eliminate them altogether!