Category : Credit

( Roughly 2.3 million homes are in the shadow market, according to a report by data and analytics firm CoreLogic, which marks a considerable drop from where the inventory of these properties stood a year earlier.

The current supply of pending foreclosures equates to a roughly six-month supply, the report indicates. The level of these properties in July 2011 was 2.6 million units.

One million of the 2.3 million shadow inventory units are seriously delinquent, according to the report. Additionally, roughly 900,000 of the homes are in some stage of foreclosure, while the remaining 345,000 are real estate-owned.

“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing.”

CoreLogic chief economist Mark Fleming noted that the dip in shadow inventory is just another factor that shows the country’s housing crisis is improving, though he stated some areas of the United States are still dealing with foreclosure-related issues.

“The decline in shadow inventory has recently moderated reflecting the lower outflow of distressed sales over the past year,” said Fleming. “While a lower outflow of distressed sales helps alleviate downward home price pressure, long foreclosure timelines in some parts of the country causes these pools of shadow inventory to remain in limbo for an extended period of time.”

In the three-month period from April to July, the report shows that certain states – mostly those located in the northeast – saw the biggest decreases in seriously delinquent mortgages. These included Arizona, Pennsylvania, New Jersey, Delaware and Maine.

Meanwhile, the states with the highest number of distressed properties included some states that have been at the forefront of the foreclosure crisis, including California, Florida and New Jersey.

Real estate experts may find this data to be indication that borrowers nationwide are better handling their home loans this year. A number of homeowners have taken part in government-sponsored programs, including the Home Affordable Refinance Program, to reduce monthly payments or terms of their loans.

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Your credit report represents how well you manage your financial responsibilities. The good news is that your negative information drops off over time but the positive information remains. Building a strong and consistent history of responsibly using credit is the foundation to building a great credit profile. Although it’s relatively easy to gain access to new credit such as credit cards, there are many best practices to use and common traps to avoid. Here are a few easy tips for effectively building your credit history.

Applying for new credit

  • Don’t apply every time you see an offer. Getting too much credit too quickly can hurt your credit profile.
  • Don’t build your credit profile through trial and error. Consult an expert such as a credit coach to develop a plan based on your short- and long-term needs.
  • Print clearly when applying for credit. If your application information is entered inaccurately it can create variations of reported information on your credit report.
  • Consistently use your complete name without any variations. Providing complete, accurate and consistent identification on your credit applications helps set up your credit history correctly from the beginning. It also minimizes the chance that your credit file will be incomplete or mixed with another consumer’s file.
Once you have credit
  • Pay your bills on time. Most lenders look at the most recent information on a report. So if you’ve paid your accounts on time for the last two to three years, the lender may weigh that more heavily than a series of late payments from five years ago.
  • Set up a budget, and follow it. This is so much easier said than done! A credit coach can help provide you guidance on creating and managing a budget based on current income and debt as well as your short- and long-term credit needs. In the age of self-help and empowerment, managing your finances should top your list. The key is not to over-extend yourself.
  • Develop and follow a plan for the type of credit you have, how you use it, and the type of credit you may need in the near future.
  • Review your credit report periodically throughout each year.
    • At least 60 to 90 days before making a major purchase (such as a home, car or large household goods) you should prepare by reviewing your credit profile to help ensure it is optimized.
    • Continual evaluation of your credit profile is necessary to ensure you are not paying unnecessary interest expenses (i.e., you could qualify for lower rates and better terms). The average homeowners spend an estimated $300,000 in their lifetimes on unnecessary interest expenses.
    • Ensure no fraudulent or erroneous activity has occurred related to credit profile. An estimated one in eleven families was a victim of identity theft last year.
Getting help

A personal credit coach can be incredibly valuable whether you understand credit or not. Having a credit coach is similar to an asset manager except it’s for your liabilities. A coach will work closely with you to explain your credit profile, provide you guidance with ways you can more effectively manage it, and can help you evaluate it on an ongoing basis. Changes continually occur for all of us. Jobs change, unforeseen expenses happen and so on. If you begin to fall behind on your payments.

  • Contact your lenders. Ignoring the situation will only add to your problems. Many lenders will work with you to set up a different payment schedule or interest rate. It never hurts to ask.
  • Pay your bills when they’re due. If you have an overdue bill, unpaid debt, tax lien or judgment, pay it off. You may find it easier to pay one affordable consolidation loan rather than several separate accounts. Your credit coach can help identify what options may be available to you.
  • Stop using credit, if possible, until your finances are under control. Consider going to cash purchases only based on your budget. This will STOP the financial bleeding while you pull your credit management plan back into place.
  • Look to professionals like the ApprovalGUARD Service. Your credit coach is experienced in explaining your credit and indentifying ways to optimize and manage debt.
  • AVOID credit repair agencies. “If it’s too good to be true then it often is!” Most credit repair agencies typically charge you high prices to artificially “fix” your credit. This unfortunately often amounts to “band aid” work that manipulates loopholes in the system and often results in the credit issue returning to your credit report within months after it was supposedly fixed. If you have inaccurate information on your report, your ApprovalGUARD credit coach can help you identify it and specifically provide you with the proper methods for getting it addressed.

It’s important to note that The Credit Repair Organization Act is a federal law that prohibits credit repair clinics from taking a consumer’s money until they have fully completed the services they promised. It also requires such firms to provide consumers with a written contract stating all the services to be provided and the terms and conditions of payment. Consumers also have three days to withdraw from the contract.

The ApprovalGUARD Service – Is the first and only service of its kind. Each ApprovalGUARD customer is assigned a personal credit coach to help them understand, evaluate and optimize their credit and debt profiles. The ApprovalGUARD Service additionally provides each Full Service customer with credit reports, credit scores, continual informative credit tips and education, and tools to more effectively manage and analyze their credit and debt profiles. Go to and use the promotion code: REMAX1 for your free 30 day, no obligation trial.

Get Your Free Credit Report

Normally, the credit reporting agencies (CRAs) may charge you a fee for a copy of your credit report. However, an amendment to the Fair Credit Reporting Act requires each of the CRAs to provide you with a free copy of your credit report once every 12 months.

Get Your Free Credit Report
To obtain a free copy of your credit report:

  • Visit, or
  • Request your free credit report by phone by calling 1.877.322.8228. Deaf and hard of hearing consumers can access the TTY service by calling 711 and referring the Relay Operator to 1.800.821.7232.

To request your free credit report by mail, please complete the Annual Credit Report Request Form(PDF document) and mail it to:

Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281

Answers to frequently asked questions about are also available.

Other Times You Are Eligible for a Free Credit Report
You may also request a free copy of your credit report in some other circumstances. Visit website about access to free credit reports from the Federal Trade Commission (FTC) for this information. Or, call the FTC and speak to a representative for assistance. You may call them at 1.877.FTC.HELP (1.877.382.4357) or 1.202.326.2222. TTY users may call 1.866.653.4261.

Changes to Advertising for “Free Credit Reports”
As of April 2, 2010, advertising for free credit reports require new disclosures to help consumers avoid confusing free offers– which often require consumers to spend money on credit monitoring or other products or services– with the free credit reports available at For more information, please visit the FTC news release concerning the amendment to the Free Credit Reports Rule.

Filing a Complaint
If any of the CRAs denies your request for a free credit report:

  • Contact that CRA directly to try and resolve the issue. The CRA should inform you of the reason they denied the request and explain what to do next. Often, you will only need to provide information that was missing or incorrect on your application for a free credit report.
  • If you are unable to resolve the dispute with the CRA, file a complaint with the FTC by calling 1.877.FTC.HELP (1.877.382.4357) or 1.202.326.2222. TTY users may call 1.866.653.4261.

Additional Resources:

Please note: To view and print PDF documents, you must use the Adobe Reader software, which is available for download without charge.

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Lower Credit Scores for FHA Purchase

Effective Jan. 15, 2011 – Loan Scores Allowed for FHA Purchase Transactions

After a Preflight Exception, FHA borrowers may have credit scores as low as 600 with 3.50% down payment, 580 with a 5% down payment and 500 with a 10% down payment. Other qualifying restrictions apply.

Please contact Mike Monile, Mortgage Consultant at Wells Fargo Home for details:

Tel 1-585-267-8836 | Cell 1-585-455-6260 | Fax 1-866-896-7479

Your Credit Score for the Future

Your credit rating can dictate many areas of your life both now and in the future. However, most people do not think about this when they are young and end up ruining their credit. They will definitely feel the aftermath of this ruined credit score later in life when they go to purchase real estate or to even buy a car utilizing a loan. This is why it is vital that people do not wait until this time rolls around and instead make sure to start earning a positive credit rating right now.

To do so, you must have some way in which you use credit and can be given a credit rating. For those just starting out, a low balance credit card is a great way to get your feet wet in the world of credit ratings. You should make sure to pay off the credit card every chance that you get, or to at least make the monthly payments. This helps show those future lenders that you have dealt with credit in the past and are responsible with it and will increase you chances of getting a loan for a house, a car, or a personal reason.

Not only will your credit rating dictate if you even receive the loan, but it will also determine your interest rate. Those with better credit obviously get a better rate, while those with poor credit may get the highest interest rate out there. So it does pay you in the end to keep that credit rating at a good level. Many people believe that they do not need credit in order to qualify for a loan, which sometimes is true. However, people do not realize that the amount of interest you pay will dictate just how nice of a house you can have or how nice of a car you can actually afford to purchase.

Credit ratings will and do impact you in the here and now as in the future. This is why maintaining a good credit score should be one of the aspects on your priority list. If not, you will look back and beat yourself up over not making your credit the best when you had the chance and risk alternating the rest of your life.