Credit Repair

Contrary to popular belief, Your financial life after a short sale is far from ruined. Although, your credit will take a bit of a hit, it is far less destructive as compared to having a Foreclosure on your Credit Record.  Within 2 yrs of a bankruptcy or a short sale you can be back in position to purchase a home if you repair and rebuild your credit as described below.  It would take a minimum of 4.5 yrs to recover from a Foreclosure.

Typically, a short sale is reported as “Settled for Less Than Full.” Once you receive the short sale approval letter and attach it to the bank 1099c that the lender sent to discharge the debt, you then send both of these documents to the reporting agencies and they typically can change the reporting on your credit to “Settled in Full” because the bank has written off the remaining debt.

When negotiating a short sale, we always request the lender to report your short sale on the credit as “Paid as Agreed” by all lenders involved. However, actual results depend on the lender. Some banks will never agree to issue a full release.

NOTE: A 1099c is issued to a debtor and to the IRS when a debt has been canceled (or forgiven). Once a debt has been canceled (or forgiven) and a 1099c issued to the debtor and IRS, no further collection attempts will be made. If they are, the debt has not been canceled (or forgiven) and no 1099c should have been issued to the debtor or to the IRS.  Financial institutions can collect the debt or issue a 1099c, but they cannot do both.

Tips for monitoring your credit

Start by getting your free credit reports from all 3 credit reporting agencies at You are entitled to get a copy of your credit report once per year at no charge.

Monitor your credit score. Your free reports will not include credit scores, therefore in order to get your scores you will need to Signup for credit monitoring. Signup at to get your TransUnion and your Equifax Scores for free. Use to get your Experian Score monthly.  Monitoring your credit is important to catch early errors that could affect your buying power in the future.

Note: Consider the Mid Score your actual score used by Banks, if it’s below the minimum required for the loan you want then consider the following steps to repair and rebuild your credit.

If you have credit cards that are paid off do not close the account. The available credit will help to lower your credit utilization ratio. This Ratio is responsible for 30% of your overall Score.  It’s a good idea to pay down and maintain your credit card balances under 30% of your credit limit. This is a huge tip in the credit reporting world.

How Credit Is Counted:

· 35% Payment history
· 30% Amounts owed (Credit Utilization Ratio)
· 15% Length of credit history
· 10% New credit
· 10% Type of credit

Rebuilding your Credit

Open Secured Credit Cards at as needed. You will need have a total of 3 active and open accounts to qualify for a mortgage. Therefore if you already have 1 account. Open at lease 2 more. To limit risk exposure and risk-protection, apply for credit individually. (Including friends, family, spouse, etc.) You always risk the unforeseen credit activities of the other person. Maintain at least 3 revolving credit lines open and in good standing at all times and having at least one active or paid installment loan on your credit will give you the highest boost possible.

Become an authorized user on a family members’ credit card to help add an established positive credit history to your credit report. When added as an authorized user, you will be issued a credit card (which we would encourage you NOT to use) and that trade line will begin being reported on your credit bureau. In this respect, you can benefit from a family member’s positive credit. We obviously would encourage you to make sure the family member is using that credit card responsibly so that you are benefiting from their positive history and not being hurt by their derogatory credit.

Note: FICO has built into their scoring model an authorized user fraud prevention algorithm to help detect non-legitimate piggybacking. So being added as an authorized user is only helpful if there is a legitimate relationship (i.e. husband/wife, parent/child, etc…).

Cleaning up your Credit Report

Mail hand written dispute letters for all derogatory items on your reports to all 3 credit agencies to have them corrected. Hand writing the dispute letters will prevent the use of OCR software reading and auto responding to your request. The Credit agency will have to appoint the task to an actual person. Always verify the accuracy of your reported credit lines and remove high-priority errors from your credit report.

Pay bills that are in Collections. Make sure that you are negotiating not only the payment plan to repay the debt, but to start reporting it as a positive mark as well as getting it deleted from your credit once it has been paid in full. This can also apply to promissory notes.

For information on our FREE Credit Repair Service Call Manny Lindo  @ 508-207-3777  or fill out the contact form on this Page.

{ 7 comments… read them below or add one }

jessica ferreira August 16, 2012 at 4:21 pm

Hi, I was just wondering what is the process of credit repair?


mlindo February 19, 2013 at 9:26 am

Hello Jessica, I just redid my credit repair post on so you have specific instruction for doit yourself credit repair. However if you want to take a more hands off approach then I could do it all for you and get you in the position to buy a home at no charge to you. Call me to setup a meeting or to get the details on the program.


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