Erase My Credit
EXCELLENT CREDIT IN 180 DAYS OR
LESS
UNDERSTANDING THE
SYSTEM
This program is designed to lead anyone, regardless of past or
present credit problems to an AAA+ CREDIT RATING. Follow each of the
steps, and you will finish with three loans; a MasterCard; a Visa
card; and at least two major department store cards. While using
these tools to build a positive credit history, you should
simultaneously work with 'A FRESH START LLC' credit clean-up to
remove the negative marks from your old credit.
ACQUIRE BANK LOANS
This six month step is important and will develop three
excellent credit references to place on your next credit
application. The credit bureaus record negative credit each month,
but only record positive credit every six months. The "Three Bank
Maneuver" is designed as a beginning method of positive credit
building. In addition to banks, Savings and Loan, Credit Unions, or
a combination of the three may be used. To operate this maneuver you
will need some beginning cash. We recommend that you start with at
least $1,000 and the more you use the better. This money will not be
spent, but be kept as security in a savings account building
positive credit.
The first thing is to
choose three banks. Get the local yellow pages and call around.
Request the loan department and ask the following questions: What is
the yield on savings accounts? What is the minimum a bank will loan
on a passbook savings account? What is the percent allowed to
borrow? What credit bureaus they subscribe to, if they report
automatically, and if so, how often?
Once the three banks are
chosen, go to "Bank A" and open a passbook savings account.
Do not put money in any other type of an account, even if it pays
a higher rate of interest. Take the passbook home and wait three
days. Return to Bank A and request to see a loan officer.
Look professional, be courteous, and ask to take out a loan, placing
the savings passbook as collateral. This is the easiest type of loan
to acquire because it is secured with cash. Most banks will loan 85%
of the amount on deposit. Given the loan, the savings account
becomes frozen. However, every time a payment is made, an amount
equal to that payment becomes unfrozen, less a few dollars for
interest. Ask that the loan be for at least one year, with minimum
monthly payments. Monthly payments establish a payment history. You
will not be turned down for this type of loan no matter what your
previous credit history, and in most cases it will not be checked.
If the loan officer is planning on checking your credit, and you
have bad credit, tell them you are trying to re-establish your
credit, and that a good credit rating is very important to you.
Once an $850 loan (85% of
$1,000) is obtained, take that money to "Bank B" and open a
second passbook savings account. Again, wait three days, see the
loan officer, and get a second loan. In our example, the second loan
amount will be $723 (85% of $850). Be sure it is an installment loan
of at least twelve months. Take the money to "Bank C" and open a
third passbook savings account. Wait three days and go get the final
loan. The final loan is $614 (85% of $723). The three bank loans
total $2187, and $614 will be left in cash.
Don't worry! As
mentioned before, every time a payment is made, the amount equal to
the payment, minus the interest, is made available in the account.
(Figure an interest rate of 12% on the $79.33 and $8.50 is interest
charged.) The interest subtracted from the $79.33 equals $70.83.
This is the amount of principal paid back. Since the savings account
calls for a 15% cushion above the loan amount, when the $79.33
payment is made, $70.83 can be withdrawn without disturbing the loan
collateral.
THE PAY BACK PROCESS
By the time the third loan is obtained, the first payment of the
first loan will be approximately seven to ten days away. At this
time take enough of the $614 cash to make the first payment. Do this
at Bank A, Bank B, and Bank C. At this time you are ahead of your
due date by one week at Bank A, two weeks at Bank B, and three weeks
at Bank C. $205 of the $614 is used, but at the same time about $182
of the frozen funds is available to withdraw at any time.
Wait 3 weeks and make the
second set of payments. You will be approximately a month ahead on
all three loans loans. On the second payment's actual due date, make
the third payment at each bank with the remaining balance of the
$614. Now that the $614 is spent, revisit the three banks and
withdraw the unfrozen funds. This will be about $545. Now use this
to make the monthly payments, always one full month ahead of
schedule.
Continue this process
through the sixth month. Pay off the loans in full after sixth month
is reached, or follow it all the way through. It is not advised to
pay them off prior to the six months, as six months is unofficially
the minimum history allowed when considering an account as a
possible credit reference. Remember, the reason for this process is
to establish three banks as future credit references.
THE ACTUAL COST
In the example, the interest rate of the loans was 12%.
Meanwhile, the savings accounts accrued at 6%. This means net
interest cost was only 6%. The amount of interest charged for Loan A
is $102. The amount of interest received from the passbook savings
account is $51. Subtracting $51 from $102 equals a total one year
charge of $51, or $4.25 per month. Since the twelve month loan is
paid after making the sixth monthly payment, the true cost is: LOAN
A Six Months at $4.25 $22.50 LOAN B Six Months at $3.61 $21.66 LOAN
C Six Months at $3.07 $18.42 TOTAL ACTUAL COST $65.58 $65.58 is a
small amount to pay for three excellent credit references, and the
original $1,000 remains. Contact the specific credit bureau that
each bank reports to and ask request a "Credit Addition Form". On
this form list the added credit, mail the form back to the credit
bureau, and new positive credit is gained. Six months have passed,
and--if credit clean-up with 'A FRESH START LLC' was utilized--the
majority of your negative credit should have been erased from your
credit file, and you have three excellent credit ratings.
ACQUIRING VISA /
MASTERCARD
After the three bank maneuver is completed, you should be able
to get a Visa or MasterCard from any bank. If in a hurry, it may be
necessary to apply for a secured card. In order to add additional
positive credit to your report, use your credit card and go
shopping. For example, go to a jewelry store and purchase an item
that is near the maximum of your credit card. Do not buy any sale or
clearance item, and find out the time limit on a return for a full
refund. Purchase the item using the credit card and responsibly
enjoy it, but be sure to return the item before the final return
date. At this time the jewelry store will issue a credit memo for
the credit card purchase. A credit to your card is the same as a
payment, and will show on a credit report positively, as a "0"
balance and an "as agreed" payment. Finally, go to a bank and make a
cash advance near the maximum of your credit limit. Do not spend the
money, but wait until the billing date and make a prompt payment in
full. There is a small charge, but it will provide yet another
positive rating. Now you can go to any one of many department
stores, and by showing the Mastercard or Visa, qualify for one of
their credit cards.
HOW TO ADD YEARS OF
CREDIT HISTORY IMMEDIATELY
The final part of the program to re-establish credit is most
likely the easiest. What is necessary to add years of excellent
credit history to your credit profile is the love and trust of a
friend or family member who has good credit. Each month when a loved
one receives their credit card bills, they are asked if they wish to
add anyone to their credit card. When they answer "YES" and add your
name, a new credit card will be issued in your name. The loved one
will be a co-signer on that account. In order not to jeopardize
their credit rating, use their address on the application. When they
receive the card, ask them to cut it in half, thus rendering it
useless. The fact that a card was issued will automatically create
an entry on your credit report, and instead of showing the
application date, it will show an opening date of when the original
card was opened and the entire credit history of that card.
Therefore, without endangering your friend or relative's credit
history, a positive credit history will be reported on your credit
file.
You are now on your way
to a new beginning. |
