info - Credit Repair: October 2007

Wednesday, October 24, 2007

Lenders move to stop credit repair schemes

Shaky borrowers pay cash to piggyback on acounts with good scores

Updated: 5:06 p.m. ET June 3, 2007

Only a low credit score stood between Alipio Estruch and a mortgage to buy a $449,000 Spanish-style house in Weston, Fla., a few miles west of Fort Lauderdale.

Instead of spending several years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

The result was a happy ending for Estruch, but the growing practice is sending shivers through the mortgage industry. Federal regulators are also reviewing the practice. And after being contacted by The Associated Press for this story, Fair Isaac Corp., the developer of the widely used FICO score, said it will change its credit scoring system beginning later this year in a way it contends will end this little-known but potentially high-impact mortgage loan loophole.

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source : msnbc.msn.com

Your credit history and your student loan

Why it's important
Bad credit can affect many parts of your life, but it shouldn't keep you from getting an education. As long as you haven't stopped paying on a previous student loan, you can still get the financial help you need to go to school.

By Brigitte Yuille • Bankrate.com

Students can borrow using federally subsidized loans or private loans.

Federally subsidized loans assume the student hasn't established a credit history when applying for school aid, so history is not considered.

This isn't true of a private loan or a federal Parent Loan for Undergraduate Students, also known as a PLUS loan.

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source : bankrate.com