It is alarming how much misinformation is posted on TikTok and Youtube about credit repair.

People can post all kinds of nonsense

Here are some recent falsehoods being posted now, and I hope you don’t fall prey!

LIE: Someone has cracked the “Experian code.”
TRUTH: No one has Experian’s algorithm, and if they did, Experian would promptly change it.

LIE: Debt collectors must get your permission to buy your debt/unpaid account.
TRUTH: A creditor may sell your debt to a collector, and neither party is required to get your permission to buy or sell. So no, that is not a loophole for getting your bad credit removed.

LIE: You can “start fresh” with a CPN number.
TRUTH: You cannot hide your past credit by buying a so-called Credit Privacy Number, which is often a social security number for a dead person. That would be a scam!

LIE: We can get your bad credit deleted fast.
TRUTH: The law gives creditors and the credit bureaus 30 days to respond to your dispute. That is not “instant” or “fast” in my book. Plus, if they don’t give you the results you want, you then have to send a second dispute, taking even longer.

BE SMART! When you see some young person on a reel purporting credit repair strategies that seem too good to be true, they are! How much credit experience do you think these posters have at their young age? How many laws are they breaking? Check the company on TrustPilot and with the Better Business Bureau. If something smells fishy, it’s probably rotten. Don’t be naive. Don’t be taken advantage of.

Don’t believe the hacks on YouTube, etc. who claim you can get your student loans deleted because of FERPA violations — that is a lie and a scam!

They try to reel you in to their illegal credit repair lair by videoing falsehoods. Don’t fall into their trap. You will lose money and reap no benefit.

If DOGE looked into your student loans, that is not a violation of law, nor is it grounds for a dispute or a lawsuit.

You cannot sue FERPA! FERPA is a set of laws, not a person or organization. That claim is just stupid.

Currently, there are no avenues to have your student loans wiped out due to actions taken by Elon Musk or DOGE.

If you want to listen to one credit repair business owner’s full explanation on this topic, here is one that makes sense:
https://www.facebook.com/reel/1711804759404566

How you file your taxes is going to determine whether or not you can qualify for a home loan.

We all agree taxes are too high, and tax professionals are very good at subtracting deductions from income to lower what we pay in taxes. HOWEVER…

If you plan to buy a home or refinance in the next two years, it is important that you show enough income to qualify for the loan you want. And that means, you must know how the underwriter looks at income.

If you make $100K but after taxes, your Adjusted Gross Income shows $30K, you are in trouble when it comes to getting a mortgage.

The underwriter does not go by your gross income!

For 1099 and self-employed people, the underwriter goes by ADJUSTED GROSS INCOME, and then possibly adds in certain types of deductions.

What you need to know is that if you deduct the living daylights out of your gross income, you might not be able to qualify for a good conventional or FHA home loan.

Before you do your taxes, speak with your local mortgage broker so you don’t accidentally shoot yourself in the foot, as the cliche goes.

The other fact you must know is that underwriters require two full years of tax returns in order to calculate your self-employed income.

Please pass on this important information to your family and friends who might need it.

Are you trying to time buying a house with low interest rates?

The graph above shows 30-year fixed mortgage rates for one year. Notice that the low was October at 6.25% and the high is May at 7.5% We are not looking back several years, because rates that start with a 3 or 4 are not coming back for a very long time — if ever. (Graph from Mortgage News Daily)

Trying to time buying a house with the market is an amateur’s game. No one can predict world events, national catastrophes, unexpected wars, crazy market reactions, or anything else we have no control over.

Therefore, the best time to buy a house is when you want to stop renting and become a homeowner.

If rates drop dramatically a few years after you buy, you can refinance. But in the meantime, you also have to think about prices.

Rates go down and prices go up.

That is one reason the feds cannot lower rates too rapidly — it would create disastrous inflation on the housing market.

Homeownership is a longterm commitment. You buy because you want to own the real estate where you live and sleep. You want that security and freedom from renting. When your credit qualifies and you have the finances to afford the down payment, closing costs (seller can help with closing costs), and the monthly payment, then that is your time to buy.

What do the mortgage brokers, loan officers, and bankers know about getting the BEST mortgage for themselves and their own families? What do they know that they aren’t telling you? It’s all here in Get the Mortgage You Want Like the Pros.

I tell you which loan is best for each scenario, where to get it, what you need to qualify, and how to avoid needless add-on fees. Available in paperback and Kindle.

Just when you’re trying to save money by upgrading your home to clean energy, the greedy scammers sell you on an overpriced, junk-fee PACE loan.

PACE stands for Property Assessed Clean Energy. The loans are for homeowners to get energy efficient upgrades and to do disaster readiness. They are paid back through your property taxes. Red flag right there!

You don’t want a loan rolled into your property taxes! Keep your loans separate from your taxes. But there’s more.

The PACE loan is not your best option. You can get financing from your bank or credit union for cheaper than PACE (for most borrowers).

The PACE loan is usually about 5 percentage points higher than your first mortgage, which doesn’t make sense, because in the event of default, the PACE loan gets their money before the first mortgage lender does. Hence, it is not a riskier loan and should not carry a higher interest rate.

In addition, lenders can add extra nonsense fees to the loan — and have been found to do so.

PACE loans are marketed to homeowners, often by door-to-door sales people. They don’t always point out the superfluous fees nor do they mention that their rates are higher than what you can get elsewhere. They try to persuade you that rolling the payment into your taxes will be “seamless and easy,” never mentioning that raising your taxes puts your home in greater danger of being foreclosed on by the County.

Always shop and compare loans before you sign anything. Especially when it comes to something as important as your home!

Sometimes when you send a letter of demand to the three credit bureaus for an error or unverified negative item to be deleted, only one bureau deletes it. The other two might send back a form response claiming it was “verified” and remains. Of course, no proper verification was actually done.

Here is your next step:

Send a second letter to the two credit bureaus who failed to delete the falsely reporting item. Say something like this:

On (date), I sent you and Equifax a letter explaining that the late payment showing June 2023 on account # XXXX1234 is reporting falsely and demanded deletion. Equifax investigated and deleted the late pay. I know you pride yourselves in doing work just as excellently as Equifax; therefore, I expect you to also delete this FALSE and ERRONEOUS post on my credit report. Since this is my second request, I will expect a speedy response. Have a nice day, your name and signature

If you can include a snippet or screen shot of the portion of the letter from Equifax that shows the deletion, that will be even better. Add this to your letter: “See Exhibit showing the deletion of the error.

The Biden Administration has set a new rule for the credit reporting agencies. The rule is that medical accounts do not get posted on credit reports, so any that show up there now, must be deleted.

This is expected to raise the credit score for millions of people, anywhere from 10 to 20 to 50 points, depending on their overall credit profile.

The idea behind the rule is that medical bills are not indicative of a person’s credit. A person could pay all their credit cards and loans perfectly, but then get hit with a giant medical emergency. That ginormous medical bill — which they are unable to pay — is not predictive of how they handle their finances. Therefore, it should not be on their credit report.

However…

the rule is not set to go into effect until spring. And meanwhile, the Biden Administration will be replaced with the Trump Administration. This means the Trump Administration could possibly overturn the new rule before it goes into effect.

Why might the Trump Administration do such a thing?! Here’s why…

Not everyone is thrilled with the new rule. Many credit card companies are saying that the removal of medical obligations from credit reports will cause people to say, “Woo-hoo! I’m free of that so now I can go on a spending spree. Now I can charge up my cards! Now I can buy a new SUV!”

They’re afraid people will not manage their finances wisely, get themselves into too much debt, and then default on their credit card bills. Then the credit card companies would lose money, and we all know how they feel about money –!

So there is pressure on the new Administration to stop the rule. Will Trump stop it or let it go throough?

Time will tell. But in the meantime, don’t be shocked if your credit card company suddenly lowers your limit!!! They might do so now as a so-called protection.

And whatever you do, keep hammering away at the medical bill and DO NOT use this as an occasion to go out and pile on the debt! Be smart, be wise, and work toward living debt-free.

When it comes to auto financing, you have to look out for yourself, because the dealer/seller doesn’t care about your finances.

The only thing they honestly care about is their own profit.

It’s crazy the rip-off loans they’ll try to foist off on you, using mperfect credit as an excuse.

Sometimes they’ll try to trick people with excellent credit into taking an interest rate that is too high — higher than necessary.

That’s what happened to me one time when I was sitting in the finance person’s office. He tried to get me to take an interest rate that was 2% higher than the one I ended up getting simply by pointing out that I had excellent credit and therefore deserved a better rate.

But there’s more!

In addition to their greedy astromonic interest rates, they are happy to approve you for a payment that’s much too high for your budget.

Unlike mortgage underwriters, they don’t regard your debt-to-income ratio.

The bigger your debt, the more they like it (at least seemingly).

The sales person doesn’t care if your payment is so high that you can’t afford to buy gas to drive the darn thing!!!

So you need to do your own calculation and decide for yourself what is a reasonable car payment.

Your auto loan should not be more than 5% – 7% of your income.

If your income is $8,000/month, then a reasonable auto loan is $400 to $560/month.

If your income is $3,000/month, then a reasonable auto loan is $150 to $210/month.

If you know someone who is considering buying a new car, SUV, or truck, help them out by passing this on to them. I’m sick and tired of people getting set up for repossession by greedy auto sellers who gave them payments they couldn’t afford.

This information comes from “Set Your Own Guardrail” Chapter 5 in Credit Repair Mindset.

This is a short, fast read that helps people think like a person who has an 800+ credit score. You can check it out here.

Did you know that thousands of people will harm their own credit, lower their credit scores, and jeopardize their finances during Black Friday sales events?

Please don’t be one of those people!

FACTS:

• When you charge more than 50% of the limit on your credit card, your score is penalized by an estimated 20 to 60 points!

• When you cannot pay off your entire balance when the bill comes, you are labeled as a consumer who has overspent their budget, and your score is penalized.

• Worst of all: opening a new credit card. Don’t do it!!! If you have at least two credit cards and one of them is a major card, such as Visa or MasterCard, then you do not need another card. Opening a new one is not worth saving 10% when it penalizes your score for the next six months!

BE A SAVVY SHOPPER

• Don’t buy items just because they are on sale. You’re not actually saving money when you buy things you would not otherwise purchase.

• Don’t go hog wild buying material things for your children. I know it’s tempting, because we love our children and we want to see them happy. But what they need most of all is our attention. They want us to play with them and read to them and have interesting discussions with them. They don’t needs lots of material gifts. Set the expectation ahead of time, and they will be happy.

I hope this encourages you to spend wisely and with moderation. Don’t let the super-rich, greedy creditors win their “Buy More Game.” Keep your finances under control and see how good that feels when January comes.