It seems like a silly statement but, when should you not “fix” your credit? So the statement may not be WHEN to not fix your credit but when NOT to hire someone to fix your credit.
I recently had two possible clients come to me a few weeks ago referred by a real estate agent and a loan officer. They told me they really wanted to get their credit fixed and buy a home. I asked to get a copy of their credit reports to review their files first before we speak further as I want to assess the credit situation they are in first.
When I reviewed the credit files, one file had 3 credit cards all maxed out and had late payments for 2 of them up to 60 days late. This means they have not paid these credit cards for the last 60 days and are coming close to 90 days of nonpayment.
The other credit report had almost the same issue, only just 30 days-three months in a row, BUT also had what we call “rolling 60’s” for the last several months on their mortgage.
I started explaining to each of them a little bit of how the credit system works in relationship to their immediate issues and then addressed numerous collection accounts getting some more detail on each account.
For the couple without the mortgage late payments I told them the best thing they can do is not pay a credit company like me at the moment but catch up on all of their bills. Surprisingly the response they gave me was unexpected. Even after I explained to them how the credit system worked, they still actually expected me to just charge them a fee and “fix everything”.
That is part of the problem with our industry, most of the people consumers talk to are the sales people, who get paid either commission only or a very small base pay and then a good commission when they close a deal. These people; whom I understand the situation; just don’t provide a benefit to the consumer as they have no clue what’s going on but only refer you to an actual “expert” once you have paid their fee.
For example, what is the use for that couple to pay me, when every month their current bills are not getting paid? It’s not going to happen. Lenders look specifically at how you pay your bills today as does the credit scoring system.
It seemed this couple wanted to be told everything will be alright and if they could just pay someone to make things “go away”.
Folks, it just does not work that way. It’s one of the many reasons why the credit industry has such a bad reputation. I told them why pay someone when you still have the same problem that will be occurring every month? It’s like putting a small band aid on a huge gash. Yes we can get the negative accounts eliminated based on several things, but you still would have the accounts that are not being paid today and tomorrow.
The couple with the mortgage late payments didn’t seem to understand that’s why a bank doesn’t want your business if you’re late on current mortgage and maxed out on credit cards with recent late payments.
And I said all of this a lot nice, but what I want you to understand is, I was telling them to not pay someone or let them talk you into thinking about paying them to “make it go away”, because that is a flat out lie.
Life always hits us with speed bumps and knocks us down, but we just get back up like we have to. I told them there is no way I’d take their money and tell them what they want to hear and then come up with excuses later.
So here is the game plan. I have been around for 10 years so I am not going anywhere. Use the money you were going to pay a credit company and catch up on ALL of your bills.
After that, make all of your payments on time for one year. Try to keep the credit card balances low when you start to catch up, then come back to us and let’s have your credit report pulled again and see what has changed.
Once you are out of the immediate danger zone is when a plan can be established to help you get what you want financially. If this isn’t the course of action you take then all you’re doing is looking at delaying the immediate issues as well as always looking over one shoulder.
*REMEMBER*— Paying a company does not mean all your problems or issues go away. You need to get with someone who can give you a plan, stick to that plan, and help you see that glowing light at the end of the tunnel for you and your family.
About Wayne the Credit Guy:
Wayne Sanford, also known as “Wayne the Credit Guy“, is the owner of New Start Financial Corporation. With nearly a decade of experience working in the credit industry, Sanford has personally reviewed more than 13,000 consumer credit files for mortgage professionals, investment groups and consumers. – See more at: http://waynethecreditguy.com/waynes-bio