Is there such a thing as a legitimate credit fixer?
March 29, 2016 8:05 PM Subscribe
My Realtor steered me to a mortgage broker, who in turn steered me to a credit fixer. I am suspicious.
I'm looking to get a condo. My Realtor's mortgage person has sent me to a fixer (a law firm), who pulled my report and then told me they needed $850 (in convenient $100 monthly payments) to bring my score up. All of my payments except rent have been on autopay for two plus years. I have five very small medical bills totaling less than $900 in collections*. From my readings I take it that it is not necessarily the best idea to pay those off as it resets the time on them. I can't imagine what I can do more to make the score go up. Using the snowball method, I've already paid off two cards and greatly reduced the balances on two more (not to 1/3 yet, but close). My Realtor, who I have know over ten years, said she'd trust this mortgage person "with her life." I am skeptical. Can a fixer really do anything I can't? Or is everybody just getting kickbacks like crazy. *I'm not interested in any lectures about why I couldn't pay such small bills. Done is done.
I'm looking to get a condo. My Realtor's mortgage person has sent me to a fixer (a law firm), who pulled my report and then told me they needed $850 (in convenient $100 monthly payments) to bring my score up. All of my payments except rent have been on autopay for two plus years. I have five very small medical bills totaling less than $900 in collections*. From my readings I take it that it is not necessarily the best idea to pay those off as it resets the time on them. I can't imagine what I can do more to make the score go up. Using the snowball method, I've already paid off two cards and greatly reduced the balances on two more (not to 1/3 yet, but close). My Realtor, who I have know over ten years, said she'd trust this mortgage person "with her life." I am skeptical. Can a fixer really do anything I can't? Or is everybody just getting kickbacks like crazy. *I'm not interested in any lectures about why I couldn't pay such small bills. Done is done.
Presumably you have a bank where you keep your funds. They might offer mortgages. You could bypass the realtor and see if you qualify for a home loan with your own bank. And not listen to these other people. Who are trying to sell you something. Which may or may not be beyond your means. And you could get this information by going to your bank. Not from a sales person whose main interest is in trying to sell you something and confuse you and part you from your money.
posted by Marie Mon Dieu at 8:41 PM on March 29, 2016 [1 favorite]
posted by Marie Mon Dieu at 8:41 PM on March 29, 2016 [1 favorite]
I agree with Marie Mon Dieu, do financing for purchase independently through your bank. The legal fees plus $850? Realtors SHOULD make you skeptical, friend or not and mortgage brokers make the hair on my neck stand up. More hassle for you but pays off in the end. Trust your instincts they are serving you well.
posted by RelaxingOne at 9:01 PM on March 29, 2016
posted by RelaxingOne at 9:01 PM on March 29, 2016
OMG - yes, all kickbacks. Also, that's a really high fee. There are fixers, but they don't cost that much as far I know.
Don't go with this realtor if you can avoid it. They've already tried to take advantage.
posted by jbenben at 9:13 PM on March 29, 2016
Don't go with this realtor if you can avoid it. They've already tried to take advantage.
posted by jbenben at 9:13 PM on March 29, 2016
Pull your credit score. If it's above 660, then your score is fine. A higher score is better obviously, but 660 is considered good credit. In the event your score is lower, you can look at FHA loans. I would not pay an attorney to fix it.
Also, I would be very hesitant to use this mortgage lender.
posted by 26.2 at 9:29 PM on March 29, 2016 [1 favorite]
Also, I would be very hesitant to use this mortgage lender.
posted by 26.2 at 9:29 PM on March 29, 2016 [1 favorite]
To me, this whole setup sounds fishier than Finding Nemo.
Get your own mortgage financing. Talk to some lenders, explain you're looking to buy a house, and get qualified. Once you've done that, you're shopping with the ability to make a confident offer, and you know what you can afford for a house. (Avoid adjustable rate loans like the plague. You want fixed interest, no matter what teaser rate they throw at you to get started.) The real estate agent can handle the transaction, but you're free to handle everything else with companies of your choosing, such as home inspections, title agency, etc.
posted by azpenguin at 10:06 PM on March 29, 2016 [1 favorite]
Get your own mortgage financing. Talk to some lenders, explain you're looking to buy a house, and get qualified. Once you've done that, you're shopping with the ability to make a confident offer, and you know what you can afford for a house. (Avoid adjustable rate loans like the plague. You want fixed interest, no matter what teaser rate they throw at you to get started.) The real estate agent can handle the transaction, but you're free to handle everything else with companies of your choosing, such as home inspections, title agency, etc.
posted by azpenguin at 10:06 PM on March 29, 2016 [1 favorite]
From personal experience: do not do this, don't pay anyone to "fix" your credit. There is nothing they can do that you can't do, yourself, for free. I've poured money down that rabbit hole for less-than-zero return. (There are ways that these services can set you back, creditwise.)
If you have the money to spend, go to myfico.com and spend $60 on their three bureau, 28-score report. Pay attention to the FICO 04 and 08 mortgage scores. If you are above 620, you can get an FHA loan. Above 660 and you can likely get a conventional loan.
Should you need help after that, post here, MeMail me, and/or check out creditboards.com for suggestions.
posted by fireoyster at 11:37 PM on March 29, 2016 [4 favorites]
If you have the money to spend, go to myfico.com and spend $60 on their three bureau, 28-score report. Pay attention to the FICO 04 and 08 mortgage scores. If you are above 620, you can get an FHA loan. Above 660 and you can likely get a conventional loan.
Should you need help after that, post here, MeMail me, and/or check out creditboards.com for suggestions.
posted by fireoyster at 11:37 PM on March 29, 2016 [4 favorites]
Also, from what I know, medical collections (properly reporting as medical on your credit report) totaling less than $1,000 do not figure in modern FICO credit scoring and FHA lenders will ignore the first $2,000 or so. You may experience different results if your loan file needs a more extensive review but the medical baddies you've described here do not sound, to me, like a barrier to a mortgage if you otherwise have sufficient income and some savings for a down payment and such.
posted by fireoyster at 11:41 PM on March 29, 2016
posted by fireoyster at 11:41 PM on March 29, 2016
Side note: the other people in a real estate deal are not your friends and are not trustworthy. Don't be deceived by prior social relationships. That's why it's best not to have them with those involved in the first place.
posted by praemunire at 1:45 AM on March 30, 2016
posted by praemunire at 1:45 AM on March 30, 2016
You can fix your own credit, you don't need a law firm to do it for you.
As others have said, get your FICO score, so you know what you're dealing with. It's at MyFico. You'll get your score, and you'll get to see what's actually on your credit report. It will also tell you what you can do to bring your score up.
Don't deal with a mortgage broker. Their job is to get you a mortgage. Not a good one. Just A mortgage. Don't be lazy, you can do this yourself.
Shop banks and credit unions, check Lending Tree or Quicken Loans. Pick the best rate for you. You only want a fixed rate loan, 30 is okay, 15 years is better. Go talk to a mortgage loan officer at your chosen institution, bring your FICO read out and your bank statements and talk to them what mortgage you can afford and qualifying for a mortgage.
If you're buying, I'm assuming you've saved up 20% down and the closing costs. I wouldn't buy unless I could pay that up front. Especially a condo. If you have a good down-payment and money in the bank, getting a mortgage is a cinch. If you're looking for 3% (FHA) down or 5% down, your credit has to be better.
So no, don't pay anyone to 'fix' your credit. You fix your credit by paying down debt.
posted by Ruthless Bunny at 5:12 AM on March 30, 2016
As others have said, get your FICO score, so you know what you're dealing with. It's at MyFico. You'll get your score, and you'll get to see what's actually on your credit report. It will also tell you what you can do to bring your score up.
Don't deal with a mortgage broker. Their job is to get you a mortgage. Not a good one. Just A mortgage. Don't be lazy, you can do this yourself.
Shop banks and credit unions, check Lending Tree or Quicken Loans. Pick the best rate for you. You only want a fixed rate loan, 30 is okay, 15 years is better. Go talk to a mortgage loan officer at your chosen institution, bring your FICO read out and your bank statements and talk to them what mortgage you can afford and qualifying for a mortgage.
If you're buying, I'm assuming you've saved up 20% down and the closing costs. I wouldn't buy unless I could pay that up front. Especially a condo. If you have a good down-payment and money in the bank, getting a mortgage is a cinch. If you're looking for 3% (FHA) down or 5% down, your credit has to be better.
So no, don't pay anyone to 'fix' your credit. You fix your credit by paying down debt.
posted by Ruthless Bunny at 5:12 AM on March 30, 2016
So I have a slightly different perspective, having worked as a social worker, one of whose jobs was to help our clients get better credit. We obviously got no kickbacks, it wasn't about that. However it was very clear when we called credit reporters that we were able to negotiate a much better deal for our clients that they were themselves. When an agency or second party intermediary called, they treated us with respect and offered severely discounted prices. When our clients called, they were demeaned and asked for full price.
Credit repair can be legitimate- but that doesn't mean that this one is. You need more information.
posted by corb at 9:40 AM on March 30, 2016 [1 favorite]
Credit repair can be legitimate- but that doesn't mean that this one is. You need more information.
posted by corb at 9:40 AM on March 30, 2016 [1 favorite]
According to the financial advice columns I read, you do not need to pay for your credit report. There is one site that allows you to check your credit annually for free. www.annualcreditreport.com. On this site, in the FAQs, there is also info on how to repair your credit.
posted by hydra77 at 10:23 AM on March 30, 2016
posted by hydra77 at 10:23 AM on March 30, 2016
Pick up a copy of "How to get out of debt, stay out of debt and live prosperously."
I have dealt with my creditors myself. I have six years of college and I am pretty comfortable self advocating. If you are not good at that or not comfortable with it, hiring someone as your mouth piece can be useful. But if you have the gift of gab, you can educate yourself and make a few phone calls. I was not demeaned or jerked around. I also was not trying to weasel out of anything and my tale of woe is pretty sympathetic. So, I always got some cooperation on cutting me a deal, to the best of their ability.
You should find out your score and learn what your options are anyway. This is Negotiating 101. You need to know where you stand. You need to determine that independent of these people that you do not trust.
Getting the facts will help you judge if they are on the up and up or completely full of shit and jerking your chain. It will also help you determine how much house you can afford, whether or not you really need your credit score fixed at all etc.
You might want to also pick up "Getting to yes" which is a quick read and research based, plus pick up some kind of basic overview of the mortgage process. Buying a house is a big deal financially. For most people, home equity constitutes more than half of their retirement nest egg. You need to get a bit of basic financial savvy about this before you do anything else.
posted by Michele in California at 11:39 AM on March 30, 2016
I have dealt with my creditors myself. I have six years of college and I am pretty comfortable self advocating. If you are not good at that or not comfortable with it, hiring someone as your mouth piece can be useful. But if you have the gift of gab, you can educate yourself and make a few phone calls. I was not demeaned or jerked around. I also was not trying to weasel out of anything and my tale of woe is pretty sympathetic. So, I always got some cooperation on cutting me a deal, to the best of their ability.
You should find out your score and learn what your options are anyway. This is Negotiating 101. You need to know where you stand. You need to determine that independent of these people that you do not trust.
Getting the facts will help you judge if they are on the up and up or completely full of shit and jerking your chain. It will also help you determine how much house you can afford, whether or not you really need your credit score fixed at all etc.
You might want to also pick up "Getting to yes" which is a quick read and research based, plus pick up some kind of basic overview of the mortgage process. Buying a house is a big deal financially. For most people, home equity constitutes more than half of their retirement nest egg. You need to get a bit of basic financial savvy about this before you do anything else.
posted by Michele in California at 11:39 AM on March 30, 2016
Legitimate credit repair is done through not for profits (for example, this organization, which I have referred people to with good results - http://www.greenpath.com/) or through agencies, such as with social workers.
It only makes sense to embark on a credit repair process like that when you have more complex debt (multiple credit cards, large medical bills, student loans, near bankruptcy etc) because in that instance you are seeing tens of thousands of dollars in debt from different sources, consolidated into a single payment plan that has a fixed endpoint, often with lessened interest.
If that sounds like your situation and you think you would benefit from having someone intervene on your behalf with the people you owe money to, in order to make repayment easier for you, look for a not for profit organization rather than taking a referral from anyone who is selling anything to you, including a home.
The people you are being sent to are very likely all working together with kickbacks. Do not engage.
Ruthless Bunny gives good advice above about how to proceed. Definitely shop for your own mortgage rather than going through people you are referred to.
posted by zdravo at 11:53 AM on March 30, 2016 [2 favorites]
It only makes sense to embark on a credit repair process like that when you have more complex debt (multiple credit cards, large medical bills, student loans, near bankruptcy etc) because in that instance you are seeing tens of thousands of dollars in debt from different sources, consolidated into a single payment plan that has a fixed endpoint, often with lessened interest.
If that sounds like your situation and you think you would benefit from having someone intervene on your behalf with the people you owe money to, in order to make repayment easier for you, look for a not for profit organization rather than taking a referral from anyone who is selling anything to you, including a home.
The people you are being sent to are very likely all working together with kickbacks. Do not engage.
Ruthless Bunny gives good advice above about how to proceed. Definitely shop for your own mortgage rather than going through people you are referred to.
posted by zdravo at 11:53 AM on March 30, 2016 [2 favorites]
Response by poster: Good and sensible advice and confirmed what I thought. What is your actual credit score range? Not even high enough to qualify I'm afraid, although I've been watching it inch up slowly over the past two years using tools such as Credit Karma and Capital One Credit Tracker. The odd thing is when I requested my credit reports from annual credit report I got reply that I'd already asked for them. I' have letters in the mail to all of the Big Three. I have no indication (from the above two mentioned and Capital does send out alerts) that someone has stolen my identity, but maybe I'll freeze everything and investigate. As I mention, everything has been on auto-pay for two plus years and I'm throwing extra at the big ones like crazy. Not being lazy at all. I really have been studying this for years including a Dave Ramsey class. The score is taking its sweet time going up.
posted by intrepid_simpleton at 8:25 PM on March 30, 2016
posted by intrepid_simpleton at 8:25 PM on March 30, 2016
This thread is closed to new comments.
If the fixer is charging $850 and your collections debt is "slightly less than $900"? I'm guessing the "fixer" will pay off that debt (probably at a discounted rate so they pocket the difference) and in exchange, get your creditors to expunge it from your record thereby increasing your credit score. All collections and other debts are no longer counted on credit scores 7 years or so after the date they were incurred, by the way, so if this is old debt, you won't have to worry about it hurting your score much longer.
(I am not a lawyer or a credit analyst; I did some basic credit counseling for a nonprofit about 5 years ago so please take all of the above with a grain of salt)
posted by Ndwright at 8:36 PM on March 29, 2016 [2 favorites]