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How to become a smarter borrower.

You are important to us. We know from years of experience that having credit problems and too many bills, doesn't mean you are bad people - just good people with bad credit.

As a matter of fact we have found that many homeowners that have bad credit are not even aware that a number of bad-credit (derogatory items showing a late payment history items can be removed legally) are on their report.

Statistics show that approximately 70 percent of all reports contain at least one error. These mistakes can sometimes cause you to be turned down for a loan or to be charged the highest interest rate on a credit card.

It's not difficult to get rid of mistakes, just time consuming. As the wheels of correction grind slowly, there may be weeks -- or even months -- of phone calls and exchanging of real mail or e-mail.

How to Improve Your Credit

Check your credit reports. Credit bureaus may not always have accurate or up-to-date information. If you find mistakes on your reports, write the creditor and the credit bureau. When you write the creditor, describe the problem clearly and include any documentation you have (such as a copy of a check or a receipt). It's a good idea to send the letter by certified mail so you have a record that you mailed the letter and that it was received.

Reduce your credit-card balances. The closer you are to your credit limit the worse your score. Lenders see close-to-limit balances as a sign that you are spending beyond your means and will soon have trouble making your payments on time. If you have a lot of credit accounts, consider closing those you aren't using or don't think you'll need. That helps remove the temptation to overspend. Don't close all your accounts however — you need to have some credit accounts in order to maintain a solid credit history.

Pay all your bills on time. If you pay even one credit card late, every other company will look at that and possibly raise your rate with them even if you have never been late with them.

Ignore offers to skip a payment. If youagree to that offer you are not doing yourself any favors. The interest continues to accrue so the next payment is based on a larger balance.

Limit your credit applications. Too many inquiries can lower your score.

Build a good history. Obtaining credit, maintaining a good payment record, and when paid off the accounts add to your good record and your scores improve.

Track your spending. Sadly, many consumers don’t really know how much money they are really spending each day. By the end of the month they mave have actually spent a small fortune, yet seemed surprised when they open their bills. To regain control and stay in control, every consumer needs to have a budget, know how and when they are spending their money, and do their best to cut non-essential spending each month.

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For additional help in understanding and improving your credit scores, we have included a link to the National Foundation for Consumer Credit. nfcc.org

Common Credit Questions

Q: What is a FICO score?

Q: How can I increase my score?

Q: Why isn’t my score higher?

Q: Will my credit history prevent me from

getting a mortgage?

Steps to correct mistakes

There are standard procedures to get rid of mistakes on your credit report.

Report credit errors quickly. Even the smallest error could seriously dent your credit chances. If you find a mistake, send a separate letter to each agency where a mistake is found. Be sure to explain the situation in detail and include a copy of the credit report with the faulty information highlighted.

Any error that you find must be investigated by the credit reporting agency (Equifax, Experian or Trans Union) with the creditor who supplied the data. The credit reporting agency will remove from your credit report any errors a creditor admits are there. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.

The Fair Credit Billing Act requires creditors to correct errors promptly and without damage to your credit rating.

PLUS there are more than likely items that are incorrectly reported from creditors that can be changed. Fixing these bad-credit items will definitely increase credit scores. That increase of scores in turn helps you the home-owner in obtaining a better loan and a better rate.

We offer the best "low-cost-bad-credit" home loans in California. You can refinance your adjustable or fixed rate and pay off bills, do home improvements, and even get needed cash.

DO NOT get caught by one of those companies that promise to "fix" your credit for a fee. They will do little or no work to actually help you.

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