Good Credit Can Be Bad at this time - Millions of people around the world are happy even in a recession.
Why Bad Credit can be Good? Why late payments is helping?
Probably you do not have to go that far to know someone like in your family or close friend having a very bad time now, bad time like loosing their home, loosing their job, getting the car reposed or max out on all the credit cards, due to all the financial problems with the recession world wide. If you keep talking to them, sooner or later you will fid out that some of then have modified their home loans, and now their balance is less or the payments are lower and they can afford them now. Or maybe all the credit cards banks knew that since this person or people stop making payments they knew that they were going to lose all their money, and they decide to give an incentive to pay only 15% to 25% of the balance and they will forgive the rest, yes they will write it off, or maybe you know some who wants to buy a first time home with bad credit, yes there are programs that are giving incentives, big ones to promote the economy, and now the buy their first home and the mortgage payment is half of the regular rent amount. Well my friend I have researched so much and I have found NO BODY with good credit been able to do anything. O yea I found many that could modified their mortgage but they would have to come out with thousands of thousands of dollars out of pocket to do a loan modification, yes because since they have good credit and they showed that they could keep making the payment, they do not qualify for nothing. Everyone frustrated, people with great credit and with many credit cards with a lot of credit available, most of their credit cards have closed their accounts or reduce the credit line 80%. So having good credit means nothing to the banks, they increase interest rates, they reduce credit lines or close credit cards and reject any kind of mortgage loan modification, loan modification are suppose to help people to relieve any kind of hardship in financial situation, not making your payments harder and harder every month. Millions of people are having nightmares every night, no mater how hard or how much time you put in to finding a solution, there is none with out letting you credit get horrible.
Credit was good before, not now and if you have a debt with a mortgage or credit cards, the only way now for they or banks to work with you, is by letting your accounts go bad or delinquents, is sad, very sad, but this is the only way. Find out by yourself and see if you can find someone who has done some thing good as far doing any loan modification and at the same time having a balance more then what the property is worth.
Do you have good credit? If yes, that is great...
Have you tried to do a loan modification on your home mortgage yet? Now you are upside down so the value of your home is less then your mortgage balance, can any body help you? The answer is NO, if you have all your payment current. Normally you try to do this to do something that is going go give you something good financially. The only way to modified you loan is putting a lot of money out of your pocket, who in the right mind is going to do this. We need help no to put money out of pocket.
Have you tried to lower you interest rates on your credit cards yet? Banks are closing credit cards, increasing interest rates to people with good credit, the banks see them like a huge risk. Banks are actually starting the plan called ACELARATED PAYMENT, yea right what they want is to collect all the money possible ASAP, they do not care if they are crunching you hard financially. Before the minimum payments of $200 now are like $800 with the accelerated payment program, if you have couple of credit cards, it is impossible to keep up with them. But for people with bad credit or delinquent credit cards, banks are calling them back and say, we are offering you an inceptive just pay 10 to 15% of your delinquent balance and we will forgive the rest. Are we getting punished to have good credit?
Bad Credit and how you deal with it on this recession.
You are surprised finding out if you had a magic stick and you could make you bad credit into a good credit from one day to another one, believe it or not you will need a bigger magic stick to make it bad again, with good credit you can do nothing now. The way banks see you is like a huge risk, so they would do what ever they can to minimize that risk, by closing your accounts or reducing the line of credits. The time has changed, excellent and OK credit gives you less then bad credit. Every single program out there to help people, is only for people with bad credit or financial struggle or delinquents accounts, and if you managed to survive the crises and if you own a home, you are stuck for ever, you can not sale of refinance you home, unless you pay big money out of pocket, so makes no sense doing it. For example here in California, if someone has a very un expensive home that purchased 3 or more years a go, the only way to get out of it is with bad credit. With good credit you are stuck for ever, you can not sale it or refinance it. (Unless you own it with no mortgage, but this is the exception and if you do, you better keep it, is the worst time to sell now).
If you have Bad Credit
You are not alone, and if you have balances in collection or simple delinquent accounts, call your bank and tell them that you can not pay and if there is any way they can help you, you maybe surprise if they not only reduce up to 90% of your balance and give you the opportunity to make small payment on it, this is something that you could do with any type of account, believe or not any type. A lot of banks received this stimulus money and they have now better chances to write things or balances off now. Now if you have good credit, good luck and nothing that you can do, just complete the original contract with the bank pay on time and keep making payments, this is very sad since you can see so many people getting help, but just because you have good credit, there is not help for you... Picture your self as a home owner and most of the homes in your neighborhood, and the others only have a balance one third of yours, yes, if your balance is $300,000 most of the other their balance is only about $100,000 or less (The others houses were already reposed by the bank or the loan was modified for people with bad credit or sold in a short sale). The only way of you getting out if by putting out of pocket about $200,000 this makes no sense at all. Do not worried the only people in this situation is the one with good credit, the ones with bad credit the have either lost their home or modified their loan and have now a good loan and lower balance then yours. What about the person who lost the home, well now is just paying one third of the mortgage by renting now, if this person has not qualified yet to buy another home under the new programs with cash back or credits, when they buy a home at the real price now, or at 75% off from what price was 3 years a go.
Are you an investor with more the one rental home?
The only way of a bank looking at your mortgage and try to help you, is only if you are way late and many months behind.
Why? Simple, because this is the only way of them taking you seriously, and know that the house is going to foreclosure, and they will be force to loose hundreds of thousands of dollars, and would have to sell bellow market value, so they will try to find a way of you keeping the house and they not to loose that much money. Sorry there is no other way, and even this is not sure but your chances are much better. According to most people investors are bad people and they should not get help at all, so the only way of dealing with it, is when you put the bank on the position of getting it worst if they do not help you. But as a investor makes no sense having homes that each month you are negative on the monthly payment, and as the time pass, your balance of the mortgage is growing more and more and value keeps going down.
So if you feel bad because you have bad credit, at this time this is not that bad...
ADVISE FOR EVERYONE OUT THERE: Love yourself, love your family, always put your family first, material things come and go, our family is for ever, especially when you build great family with great moments for our memory for ever, great happy moments are remember for ever.
IMPORTANT DISCLAIMER: This is only the way of one person ideas, please regarding your credit situation, before you do anything please ask Your Legal Credit Advisor if you do not have one get one soon, this is only for reader to use as a entertainment. Creator and owner of this web site is not responsible for any decision made by any reader of this page. What ever you do with your credit is at your own risk.
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