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I am new to the site. We are going to be trying to get a home loan in around a year. My fico sits at 564 and hubby at 616. There are a lot of terms and things I am not understanding here. Pay for delete, dispute letters, etc. I am wondering how all this works and when to use them. Is there a site or an area that I can read about the tactics for credit repair and when to use them in what situations.
Thank you for your help.
basically, what allot of ppl including myself do to improve our credit is the debt validation process.
This is where we force the Collections Agents *CAs* to prove to us that the debt they claim you owe is yours and they have a right to collect it. Thats a very quick answer and I encourage you to ready the FCRA so that you are well versed in your rights.
Now, you will also see that ppl will offer CAs a settlement during this process. I generally offer 25-50% of the listed amount depending on the age, type and amount of alleged debt. When we send these letters we send the with a Pay For Delete *PFD*clause, That means the CA has to send a letter promising to remove their negative listing from your Credit Report *CR* if you pay them the agreed amount. You will also see ppl refering to the SOL or, statue of limitations on the debt in question. Basically, each state set an amount of time that CAs have to sue you over various types of debt. YOu should read your states laws on collections and SOLs along with the FCRA. Once you have read up on these things you will know what to do with your accounts
Debt validation letters are sent to the CAs to validate your debt that they are claiming. If they can't validate your debt, they must remove their listing from your credit report as a result of which your score will increase. You can also sent a dispute letter to the CRAs if the CAs do not respond to your letter. Now if they can validate your debt, your can come to a debt settlement process with your CA where you can ask the CA that you will pay a certain percentage of your debt say 50%, but the CA must delete their listing from your credit report after the payment. This is called Pay for deletion. If the CA agrees to the PFD, the moment you pay the negotiated amount, the debt gets deleted from your credit report and your credit score increases.
You said that your fico score is 564 and your hubby is at 616. I think that if you take the home loan now only in the name of your hubby, you will get a favorable interest rate on your loan. Since your score is below 600, as far as my knowledge goes, if you take the loan together, or if you show your score, the interest rate will be much more higher.
I had no idea you could even be considered for a home loan with a fico under 680! Back when My scores were around 580 I could only get a credit card with a 300 dollar limit, forget a house....
Thank you for all the help. This is a big process to get your arms around. I have a good idea how to get started now. Do you send letters even if the debt is valid in hopes they can't prove it and it has to be removed?
Yeah, I mainly use it as a way to break the ice with CAs. It really takes them down a notch and makes them a bit more agreeable to PFD offers. Also, it stops them from violating your rights under the FCRA since they know your well educated in it.
I too think it is difficult to get a home loan below 680. Although it will be difficult for you to go to that level of credit score, I think your husband with a present score of 616 can try to increase his credit score by 30 to 40 points. But still it will not be very easy to get the loan.
Actually DV letters to CAs are sent mostly to come to an PFD agreement with the CA after they validate of your debt.
Scott,
what kind of score do you think one needs for a car loan?
If your credit score is above 680, you can be rest assured of getting a car loan at the most favorable rates. but if it falls below 680 the rate of interest will be much more higher. However it is just impossible to get a car loan below 580, I think.
However it is just impossible to get a car loan below 580, I think.
Not impossible, just expensive.
Ah, very good. Thank You
Actually Scoot Capital One is pretty leasy to get a car loan with. I had a score of 540 and got approved for a loan of 30000. Of course you have to verify your income with them.
Really, not to be rude but, about how much income do you need for a cap 1 auto loan?
I am not sure whether you will get a auto loan based only on your income with a credit score of less than 580. If you even get a loan with such credit score, the rates will be astronomical.
80000$, and the rates were rediculous. The interest was 16.9%. I needed to show tax returns or two pay stubs. I figured the interest rate was too high so I passed, however I really didnt need a new car. Figured I would wait a year until my credit got better. Which is a good this because I was going to get a Lincoln Navigator and with the gas prices as high as they are now..... Anyway I figure if you really need a new car and decided to get a cap one loan you probably would be able to refinance at a lower rate after a year. Also if you bring that check into the dealership they might also try to beat it and give you a better rate. FYI the payment terms were around 500$ a month for i think 7 years with no money down. Which also means you will surely be upside down on your card loan in a couple of years. It sucks having poor credit, this is the price we have to pay.
MY husband and I have ficos in the mid the high 600s. WE also bring in about 80-100k a year. I was just curious about how hard of a time we would have with a car loan. My husband has a student loan but, other than that we dont have any large purchases on our credit. WE pay for most things in cash so i am concerned that the lack of large purchases via credit will hurt us with the car loan.
80000. You need income verification too. Either two of your last pay stubs or last two income tx returns. The rate was high though. 16.9% for 7 years. payment were about 550. I passed and am waiting to get my credit better before I get a new car. Which I am glad I did since I was going to but a Navigator. And with the gas prices the way they are.....
debt
Even if you may have accounts that may 'fall off' your CR soon, when you dispute these accounts ( when the time comes..) should you ALSO send a letter of some kind? IS there a letter you can stating the SOL has expired? I never have heard of one, but..I don't know if one ACTUALLY exists or not.
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[deleted] violation of forum rules - Richard