A: You can only remove late payments from your credit report if you have some proof that they have made it there by mistake. In your case, you are stuck with them. You can try to dispute the 60 day late payment on your car loan and may be manage to remove it. Well, dispute actually is incorrect word. You can write a letter to the lender and explain the situation. Tell them that your sister did not inform you about it, and you learned about it only because you applied for the mortgage. Is the loan seriously past due? Of course, it is silly of me even to ask. You may even have another late payment coming. Offer them such a deal – you bring the loan up to date and basically take over the payments, and in return they remove late payments and change status to Paid As Agreed. I will try to post a letter that you can use soon enough. Judging by your current scores, your credit before these delinquencies was quite good, and that may help.

The question on how to remove late payments comes to my inbox often enough to emphasise one thing over and over again. Unless you can prove that a given late payment does not belong to you, you can not dispute it, negotiate it and remove it. Sort of like that Kyle Reese monologue from the original Terminator movie where he explains to Sarah Connor what the machine is all about. Many however, underestimate initially the impact late payments have on their credit reports and scores, only to try feverishly to remove them later on with no effect. While the 30-day late is considered somewhat mild delinquency, it will decrease your score substantially, and potential lenders do not want to see it, especially in the days when they are stingy with credit even if your scores and report are good. The 60- and particularly 90-day late payments are counted as very serious delinquencies and cost you dearly in terms of credit points. See What affects credit score according to FICO.

Why late payments have such strong influence on credit scores? Because FICO algorithm counts negative information such as late payments, bankruptcies, collections and judgments toward 35% of its scoring criteria and other non FICO algorithms consider those quite heavily as well. That is why so many for-profit counselors are out there trying to convince you to pay them in order to remove lates from your credit report. They, of course, know well enough that they just give you empty promises for some very real cash. The only thing that can successfully remove late payments is time. 7 years to be exact, from the month in which the late payment was due.

How to buy house in 2010 – common sense do-not-do things
For starters, we want to notice in our home buying guide a few rather simple things that somehow people insist on doing.

1. Do not move back with your parents, in-laws or other relatives after you sell your existing home and want to take some time to find exactly what you want. In 2010, you will find plenty of more than affordable places to rent and many rentals are available on monthly basis without long term commitment. Living with your relatives or those of your spouse rarely contributes to a healthy relations after you move out. Unless you absolutely have to.

2. Don’t expect making large and quick profit even when buying short sale or foreclosed house. I see foreclosures bought for $350,000 in formerly $700,000 neighborhoods and put on the market in $500,000 range. Only to be sold for lower $400,000. Still not bad but beware of all associated costs involved.

3. Don’t be afraid to miss the bottom, I don’t think there is any in sight. Do not read too much into S&P/Case-Shiller home price report which is being touted as sure thing by many from recovery-coming-soon gurus. I mentioned professor Shiller chart when he and his chart were very unpopular among realtors, builders and speedy recovery well wishers. The very same crowd now claims that the report promises a bottom in home prices in 2010, but not before additional declines. Well, take it for what it’s worth, which ain’t much in my opinion.

4. Don’t be afraid to miss the lowest rates ever, they are here to stay for a while. Obviously, mortgage rates will fluctuate a bit but even an increase by a half percentage point will be the deal breaker for many. We wrote about interest rates not going anywhere in a foreseeable future in Getting mortgage in 2010 – how to get the best mortgage, and the Federal Reserve did state it just few days ago.

5. Don’t buy a house just because you are afraid to miss government incentives, since there is talk about discontinuing the home buyers tax credit for new and existent homeowners. If you rush in, it is likely to end up costing you more than all the incentives out there.

How to buy house in 2010 – do not involve friends in home buying process
Yes, times are tough and you just want to throw a bone to a realtor friend whose business is 75% down from a year before, or your wife best girlfriend has just started at the local bank and needs something to show to her new bosses. When buying a house in 2010 or 2011 or any other year, having friends or relatives as your realtors or mortgage brokers is often but not always a rather bad idea, and also a dilemma or two. You are not sure how good they are but if you ask them will they be offended? Then again, do you want them to make money of you? But so what, someone else will? If you feel they are qualified you can get them, but weren’t Steve and Mary quite unhappy with them?

If you have them do the work and deal goes bad because bank doesn’t give you a loan or the realtor sells you a house that will have some issues later one as all homes, even the most perfect ones do, then things may get ugly between you and friends or relatives. The other question is commissions, with many realtors giving kickbacks that are quite legal in many states, how much should you ask for or how much they should offer, or should either of you mention it to begin with? And what if another realtor offers a much better kickback?

And how much your mortgage broker should offer you to pay for closing costs? The bottom line is, I have seen many cases where friend or relative based purchase works fine and as many when it doesn’t. Finally, when husband and wife each has his and her set of realtor and mortgage broker friends, it further gives ground for needless and potentially harmful issues to arise, like my Jennifer would get us much better deal, than your Pete, you dummy.

The most important point is to find a professional who knows the area, knows how to negotiate, makes proper market analysis, etc. Too many realtors are simply accidental amatures, bored housewives, part timers and glorified salesmen who managed to get a license and have access to multiple listing network. Same goes about mortgage brokers and home inspectors. Home inspectors do not have to licensed in many states. And people often think they know everything, but if you have an uncle who is excellent plumber or electrician, he can simply miss more than few small but important things that experienced home inspector won’t.

How to buy house in 2010 – choosing a realtor
That is the most important aspect and not every home buying guide puts enough emphasis here. Real estate agent is at the bottom or the top of the food chain. He or she is the one who recommends you a good loan officer, home inspector and lawyer. But most importantly, the knowledgeable and honest real estate agent who intimately knows the area you are interested in, will help you find exactly what you want, hopefully.

Of course, our home buying guide has few things to watch out for,
1. Don’t relay too much on referrals of family and friends but judge for themselves. People change and someone who was good for your sister 5 years ago, may not be as good for you.

2. Don’t get the top producer in the area. Those are mostly interested in getting listings to sell, and you will be stuck with one of his or her juniors who will try to push every house they show you.

3. Don’t buy into “we are not Florida, Arizona or California … our housing market is strong” type of the sale pitch, your state may be next if not already.

4. Curb appeal is one of the most ridiculous inventions in selling real estate. Just ask your realtor to explain you what precisely curb appeal is. If he/she tells you this is how much a given house appeals to would be buyers and that is why you must write a contract right now or tomorrow at the latest, just let it go because believe me, will be many others, even more curb appealing.

5. Don’t believe the hype that there is nothing on the market in your price range any more and likely nothing is coming, since the prices will go up, so you have to grab this house. You don’t and others will be coming indeed.

6. Be sceptical of a midnight call when your realtor wants you to jump the gun and sign the contract. Only for you guys since you are so nice … or I did it for your brother in law so believe me …

7. If someone calls your realtor with an offer or even an attempt to talk about the very house he is just trying to convince you to buy, chances are he is trying to break your hesitation by creating some nonexistent party that supposedly is after this very house.

How to buy house in 2010 – getting mortgage
You must understand that times have changed, so if your loan officer asks something in 11th hour, don’t ask why, shut up and get it. He or she wants the deal done three weeks ago, get the commissions and move as aggressively on to the next deal, so believe me, they are not asking you to furnish additional papers just because they want to aggravate you.

You must also be prepared to few delays or even setbacks that can happen as late a the day or two before the closing. Even with everything perfectly fine, on the very closing you may encounter problems, so don’t freak out. Get you lawyer to get all the extensions needed if something comes up before the closing. Normally everything gets resolved one way or the other.

After all, I am not going to touch mortgage details, down payment and credit history. We will get to those later, for now just remember 3 things,
First, there is no housing market bottom in sight so do not rush.
Second, nothing as uncommon as common sense so if you possess any don’t be shocked that people look funny at you when you occasionally display it.
Third, if something looks too good to be true, it is very likely is.

How to settle credit card debt – where to start

To negotiate a successful credit card settlement for less than you owe, you obviously have to somehow force lenders start negotiating and make them want to settle with you. Depending on your situation, you should choose one or the other – stop making credit card payments to demonstrate your inability to pay or to softly ask them for some sort of debt relief without actually stopping payments but firmly implying that you will if no agreeable settlement is coming. Interesting that for vast number of borrowers it is easier to simply jump the gun and stop paying, than to make that first phone call and politely ask before stopping.

If you are seriously struggling and/or could care less about your credit history and scores for quite sometime in a future, then you should probably stop paying and then try to settle for a lot less than you owe. If however, you still want to have some resemblance of the good credit after you are done and have money to pay some of your debt, it is prudent to call, state your hardship a offer a credit card settlement. You can always stop your payments later if being nice does not produce a desired outcome, and start more serious debt negotiation.

Know what to negotiate

Often, if only few certain things like late or over-the-limit fees, balance transfer fees, sky-high interest rates go away, you may just make it. Some issuers and banks will be more willing to negotiate those unpleasant items than others. Ask your credit card issuer if that is something they would do. Again American Express may be easier on late fees while Bank of America and Chase may lower your interest by one or two percentage points.

If your annual interest rate is higher than 12%, request a lower rate. Do it while you are still making payments on time. When you negotiating such a credit card settlement, always ask to lower your current rate by 5% or 6%. You may settle for 2% or 3% cut in the end. Always be ready to back up your request by a not so veiled threat of looming delinquency if bank does not want to negotiate or its counteroffer is not good enough. Yet be reasonable.

Settling credit card debt – dealing with threats

At some point, you will likely be threatened to be referred to a collection agency and even by a lawsuit, wage garnishment and all those nasty things that every US consumer has been having nightmares lately. You need to be calm and steady, and politely let your creditor know that frankly, if this is how they want to negotiate credit card settlement when you are seriously trying to do it in good faith, then you simply do not care. Tell them that Chapter 7 Bankruptcy is always an option and besides, filing a lawsuit against you is not worth their time and money.

Negotiate credit card settlement – making an offer

When making an initial debt settlement offer, you can be as unreasonable as you want. Again, if you have not missed a payment or missed just one or two and by no more than 30 days, you can try to set up an affordable payment plan. But if you miss several monthly payments and already have 60- or 90-day Lates on your credit report, offer them as little as 5 cents on a dollar. Basically set a ceiling you do not want to go over and stick to it. Chances are your credit card lender will accept it, eventually.

Should you offer to pay a lump sum settlement of, let say, 25% to 40% of the outstanding debt balance? I would rather have settle for some monthly payment plan and here are two reasons why. By offering to pay a lump sum, even substantially smaller than you owe, indicates that you have money. Depending on how much your offer is, the creditor may be tempted to go after your savings. If you offer a monthly payment plan, the danger of such a knee jerk reaction becomes much less. The second reason is quite simple, you may need your cash for something else.

Negotiate credit card settlement – a few odds and ends

Once you settle credit card debt on your own and for less than you owe, hopefully for a lot less, get everything in writing. When negotiating, do not rush into agreement if your credit history already is a mess. If you qualify, the Chapter 7 Bankruptcy is still there, and while your are procrastinating, your credit cars debt gets older and harder to collect, and the creditors have more reasons to simply charge it off.

Before sending your lump payment by certified mail with return receipt, request a conditional debt satisfaction letter, stating that the entire credit card debt will be wiped out clean when the creditor gets whatever the sum you settle for. Such a letter will bullet prove any subsequent problems that may arise if you creditor decides to sell the remaining balance to a collection agency or a few. And know your state statutes, for both debt and judgment.

Two of the best secured credit cards on today’s market for consumers with bad credit are Gold and Platinum HSBC secured credit cards. Notable highlights of the secured Visa cards include,
- no minimum income required
- annual fee waived on Platinum card
- international recognition
- long lasting rewards
Pity, because both secured cards are only available in Singapore and HSBC Asia Pacific region. If you have bad credit and live there, either card will be quite good to rebuild credit.

The HSBC Secured Visa card does not even require a minimum income to qualify. If you are 21 or older, simply open an HSBC Time Deposit account with a minimum of $10,000 SGD for Secured Gold Visa card or $20,000 SGD for Secured Platinum Visa card. Which are actually quite substantial sums in US dollars, $7,139 and $14,279 in today’s conversion rates, respectively. But if you have some cash to spare and time to rebuild credit, these secured credit cards are very sound. And for selected customers, HSBC will grant a credit limit of up to 100% of the approved deposit amount.

Now the annual fee part. It is waived for the first year. To get the second year annual fee waiver, you must make at least three transactions per month with your HSBC Platinum credit card between the second and fourth month of the card issued. You also must spend $12,500 SGD at the very minimum on your HSBC Secured Platinum credit card account.

For North American consumer, HSBC is currently offering four credit cards for consumers with bad credit, including Orchard Bank Classic Cards and Orchard Bank Secured MasterCard. Each is an excellent secured credit card to build credit anew. Below are the basic rates and other terms. The Classic Cards require no security deposit while Secured MasterCard asks for much lower initial security deposit compared to those of HSBC secured credit cards, available in Asia Pacific region. Well, with bad credit, you take what you can.

For those that don’t have the time to write letters personally, please see our credit repair reviews page for additional information on credit repair lawyers and services.

Sample Credit Repair Letters:

• Sample Credit Dispute Letter
• Sample Pay for Delete Letter
• Sample Debt Validation Letter

Normally it would take at least 45 days before you could raise your credit score.  There is very little you can accomplish quickly disputing late payments, so we put those aside for now.

Credit Repair Tips

Collection accounts
Debt collection accounts, no matter how small or old, have a very negative impact on your credit score. Removing them from your credit report will improve the credit score fast.  Contact collection agencies and offer to pay off if they remove collections from your credit report.  Known as Pay for Delete, (you pay, they delete), this procedure can raise credit score 50 points at least. Depending on other factors, like credit account types you have, how old collection accounts are and for how much, you can even see an over 100 point raise.

Revolving debt utilization rate
This percentage ratio between balance and credit limit can be very useful in raising your credit scores.  Bringing it under 9% is one of the fastest ways to a higher score. You can raise it fast, combining a few things,
- paying off your revolving debt down, which is quite obvious
- requesting credit line increase from the creditors
- carrying a very small balance ($5 to $10) on one or two credit cards

Medical collections
If you have medical collections on your credit report, getting rid of them is the sure way to raise credit score. You need to ensure that the collection agency represents the doctor, dentist, hospital you owe money to, called the original creditor. For fast results, pay your debt to the original creditor in full, asking in return to remove their own derogatory records and notify collection agencies.  But you must follow up immediately with collectors yourself upon receiving satisfaction of debt letter from original creditors.

With these credit repair tips, will you be able to raise credit score 50 – 100 points? Most definitely. In 30 days? Very likely – but don’t wait until you find the house you always wanted, only to see it gone because you are not qualified.  Remember that debt validation and credit dispute also works, but often takes longer.

When trying to repair credit scores quickly, think of the 5 main components which influence credit scores in the following proportions -

Payment history: late payments, bankruptcies, collections, judgments – 35%
Debt utilization: the ratio of revolving balances to total revolving credit – 30%
Credit history length: how long the accounts have been open – 15%
Type of credit: credit cards vs. installment loans – 10%
Hard inquiries: applications for new credit – 10%

These proportions, however, may change depending on the type of loan the consumer is looking for.  If you must repair credit score quickly, understand that Equifax, TransUnion and Experian use at least three different scoring models for three different types of credit – mortgages, auto loans, and consumer credit, because these different types of loans carry different default risks.

The credit score models differ in what they are intended to predict, the statistical methods used to determine credit-worthiness scoring, and what data are used and how they are weighted.  That being said, one needs to take a different approach to repair credit scores each and every time.

Equifax uses Beacon 5.0 for home mortgages, but Pinnacle model for auto loans. TransUnion uses FICO Classic 04 and Empirica Auto 95, while Experian uses Isaac/Fair Model II and Advanced Risk Model respectively.

So between two models used by the same credit reporting agency, the credit score can differ by 50-60 points and sometimes more, resulting in quite different rates for a home mortgage or a car loan.  Since cars depreciate very quickly, and homes tend to hold their value or appreciate, the current debt weighs much more for the auto loans.

When aiming to repair credit score, concentrate on the factors that influence the model you will need the most.  More on how to credit repair tips.

Smart Credit allows you to control all aspects of your credit – from one safe and convenient console.

Experian FICO is no longer available, so financial institutions are offering Experian Advanced Risk Score 2.0, which belongs to the FICO NextGen scores. The Advanced Risk Score 2.0 range is from 150 to 950 points, leading to further confusion among consumers on how just to interpret this credit score.

There are several resources where you can order your credit report for free, and since all you want is to proof-read it against potential identity theft, you do not need to buy credit scores.  For starters, you should get a free annual credit report once a year.  There are several good services that offer protection against identity theft AND a free credit report, including SmartCredit.