All Forum Posts by: John Dillon

Recently in CA, an office manager from a lending group we work with, advised a client looking to get refinanced, to 100% pay off an $8,000 line that was maxed out. They paid the $8,000 but did not close the account, and when the scoring system then addressed the $8,000 of available new credit, their score went down almost 20 points.

Using the FICO software we use to work with our clients (when we later put this client's credit history into the system), it told us that they would have increased their score the 9 points they needed by paying down the $8,000 line to 78% of available balance (from the high balance of $7,974 that it was) rather than by paying it off completely. It's sometimes better to carry a balance and keep current on payments than to have a whole lot of new credit available that might then compete with a new loan obligation.

We told them to use the card and bring the balance back to the recommended $6,140.00, which they did. They made their next minimum payment and the score adjusted 12 points above where it was before, and 3 points more than what they needed for their refinanced loan.

Having lived in the North East, mold is a big issue. If the carpet shows a possible presence of mold, you might get the landlord to totally replace it at their own expense. Since most towns and cities consider mold a health risk, they hold landlords responsible in rental properties.

My 2 cents.

John

As a foreign national (now a permanent resident in the USA), I can suggest the following:

Run a search either over the internet or through the junk mail you have on credit card offers and look for secured credit cards ($300 to $500 limits) and apply, securing your limit with your own cash or a bank account. You must have a valid SSN with the ability to earn an income in the USA. (You will pay up to $100 or more in application and service fees, but this is a business for these type of banks.)

Another suggestion (and again you need an SSN) is to open a CD with a local bank that issues either a credit card or a personal loan. About a week after you open the account, go back to the bank and ask to open a loan -- secured by your CD. You can do this several times with different banks.

These secured lines will be reported to the bureaus over the next 3 to 6 months, building a credit history. You must have patience as a credit score needs time to climb to a level underwriters look at for unsecured credit or loans.

Absolutely right, Mike,

But I don't think it will ever be set to law. I didn't think the President can dictate to private industry. The sub-prime market is going to crash and it's much bigger than the "savings and loan" bail-out, which almost took the country down last time...

John

This is now the norm.

The recent Program announced in Washington is more "smoke and mirrors" than actual relief for the sub-prime borrower. In the end, very few sub-prime home owners will qualify... and if they do, has anyone yet found out who is going to pay for all this lost revenue to the lenders?