Care and Feeding of Your Credit Score Part II

This is the second installment of my short video series that discusses credit scoring, how it works and what you can do to protect your score.

Care and Feeding of Your Credit Score

Attached is the first of a three part series of short videos I put together which discuss how credit scores work and what you can do to maintain your credit score.

No Treat for Modification Tricks

Most of us in this business have been approached by friends, family and even clients about loan modifications. We all know folks who are having a rough go of it and are seeking help from their lender to modify the terms of their loans so they can stay in their homes.


We have all heard them say the same thing; “The people at the bank told me they wouldn’t even talk to me unless I was late on several payments.” In many cases, bank personnel have actually advised people to let their loans go delinquent, so they can “possibly” help them! And, many people take that advice and let their payments lapse, destroying their credit with no real commitment of assistance.

Here is the real horror story – Just this morning I heard from a dear friend asking about getting a loan to buy a smaller place since her expensive house just went into escrow. After talking to her I learned that she had been seeking a modification and had taken the banks advice and let her payments go delinquent for a few months. Then suddenly an offer came through on her home and now she is in escrow. But since she has several late payments, she no longer qualifies for a loan.

It is staggering to me that banks actually allow their people to make such ridiculous recommendations to those looking for a modification. Their rational is if you’re current on payments, you don’t need help and that is plain stupid! There are a large number of people doing their best to hold up their end of the contract and make their payments but are in immediate need of financial relief. These are people trying to do the right thing.

Beware of Loan Modification Scams

Anytime people face adversity there are always those waiting in the wings to exploit them and prey upon their situation to make a buck. One of the most prominent scams that have hit our industry over the last year has been loan modification companies. They target people who are behind in payments, facing foreclosure and offer them hope under the guise of expert advice and the promise to obtain a loan modification that will help them get out of their financial problems with their bank.
On the face of it, this appears to be a laudable goal but the reality is that they require some degree of payment up front, and then fail to provide the sought after modification. In some cases, it has been shown that they take people's money and don't even try to obtain a modification. Basically they take money from people who are already facing financial difficulty and often fail to deliver any relief.

Disputing a Bill: Right or Wrong?

Have you ever disagreed with a bill you received from a cell phone service you discontinued; or a doctor bill you were sure you paid? All of us have had to go toe-to-toe with some company or another over errors in billing and in most cases we usually get the problem cleared up and the issue is taken care of.


Then again……..there are those times that you are sure you’re right but they just won’t see it your way, and they send that $25.00 doctor bill to some nasty collection agency. You try dealing with the collector and after you don’t have any success, you simply ignore him until he goes away. Which, he eventually will do.

However, what doesn’t go away is the negative report that’s been left on your credit.

Your Credit Score - The Basics

These days more than ever your credit score is key to not only having access to better loan programs but the score will determine how much you pay in rate and fees. There have been many changes in recent years and Fannie and Freddie have instituted risk based pricing which may impact you if your score is below 740. So it pays to keep your score in good shape.


So how do you do that and what are some of the tricks that can help you maintain a good score?

Paperwork - Should Borrowers Take a Stance?

So how much paperwork do you need to give a lender these days to get a loan? Not that much really, but many people in the market today appear to be uncomfortable with providing much, if any documentation to a lender that is trying to determine if they can safely lend these folks a couple of hundred thousand bucks. In fact, I have encountered an increasing number that simply draw a line in the sand and dictate what paperwork they are willing to part with.


So how did this situation develop and why are these folks playing hardball? And the better question is; should they?