Advice from Mortgage Broker regarding credit repair

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I know you have heard this all before, in several forums, and in several different ways... but here is what he/she had to say, and I hope this helps clarify what everyone else has posted:

Regarding my PFD letter:

I think the letter is great,

but there are a few things in the letter that may cause a problem.

Remember, the goal here is to get the collection agencies to agree to

remove the account from your credit report. If you ask them to do things

that they cannot do, or that does not fit into their regular course of

business, you are likely to get less cooperation from them.

All creditors report to the credit repositories once a month. So, if you

demand that they remove the account within 15 days for example, they will

not be able to comply with your request. But, you can ask them to send

you a letter, on their letterhead, stating that they will have the account

deleted from your credit report. Then, if they fail to delete it, you can

get it deleted with no problem.

You can have them e-mail this letter to you. This will enable you to get

the letter right away. So, you actually want two letters from them; the

first stating that they will remove the account if you pay them, and the

second stating that they will notify the three national credit

repositories to remove the account from your report. Both letters must be

on their letterhead. The letters must include your name, the name of the

original creditor, the account number, and the amount of the debt that

they are reporting that you owe. The letters must be signed by their

authorized representative. And, the letters need to name the three

national credit repositories by name. For example, "We will notify

TransUnion, Equifax and Experian that this account should be deleted in

its entirety from your credit report".

You should only be concerned about their reporting to the three national

credit repositories. No one else matters. Once you have the letters from

them stating that the accounts should be removed, be certain you keep a

copy of the letters. Sometimes an account gets removed and then somehow

it ends up back on your report. If it ever pops back up, you'll have the

letters and can take care of it again.

Part of how your credit score is determined is based on the length of time

between the date your credit is accessed and the date of last activity on

a delinquent account. For example, let's say you have an unpaid

collection account on your credit report and let's say that the date of

last activity on the account was 6/00. If you pay that account off today,

your date of last activity will change from 6/00 to 10/08. So, if your

credit report is accessed in November 2008, the length of time between

then and the date of last activity on the collection account is 30 days or

less. So, even though the account is now paid, because the date of last

activity is more recent your credit score will be worse. For this reason,

if you cannot get the account removed, you are better off not to pay it at

all. Or, as others have told you, to wait to pay it until after you have

closed on your new home.

Regarding tax lien removal:

Don't spend too much time trying to get the tax liens removed. You

probably won't have any luck and, since they are paid, they are not

hurting you as much as they would if they were still outstanding.

Regarding credit repair process and starting TL's:

You are ding the right thing by having re-established three new accounts

and paying those accounts on time. Be sure you don;t have any late

payments on them and they will help pull your scores up. I know it can be

frustrating because it seems like the scores always drop really fast and

then take forever to come back up. Just hang in there. If you can get

those collection accounts removed, your scores will improve enough for you

to get a mortgage loan. And, once you get a mortgage loan, your scores will continue to increase because mortgages are considered the mmost

important piece of credit.

Regarding FICO scores and "Mortgage Scores":

You are right that the scores you get and the scores the lender gets wll

not be exactly the smae. That's kind of stupid, but it is the way it


The scores are pretty close though- close enough that you can get a good

feel for where you stand. You should try to get the collection accounts

removed first, then get your scores.

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Thanks. When we got the email, I thought it would help others. Also, it verifies what WTC, other mod's and admin's have been telling us all along about FICO's and 'Mortgage Scores' being different.

Because of the email from the mortgage broker, I have made changes to my PFD letter. And, have included that I would like them to put everything on their company letterhead and send back to me. That way, everything covered. (I had originally asked they sign 'my' paper and mail back to me).

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Sounds like you are on the right track. I don't personally know what your timeline is for getting a house, but if you can, try getting at least one installment loan (i.e. secured loan from a CU or bank) that reports to all three.

That will add to your nice mix of TLs and definitely give you a nice score with on time monthly payments.

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We figured we'd wait til next year sometime. We already have a car loan at a whopping 24%, and will find out tomorrow if NFCU will refinance. NFCU had told us if we waited 6 mos to refi, they would do it. We're at 10 mos now. If they do, I will post here and let you guys know either way.

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