At a time when unemployment remains stubbornly high and job prospects seem dismally low, the danger of missing a credit card payment or two is all too possible for many borrowers. Some may be tempted to try to outrun the debt by dodging collection calls and throwing away creditor letters. But sooner or later, your debt will find you.

“Just walking away from a debt won’t solve the problem,” says Barry Paperno, consumer affairs manager for myFICO.com.

Your delinquent debt can follow you on your credit report and possibly all the way to court if you refuse to pay. Bankrate outlines the timeline for debt collection efforts and reveals what to expect and what you can do at each point.

Stage 1: 30 Days Past Due

Trigger: You just missed your payment due date and are 30 days behind the start of the billing cycle.

What to expect: Lenders likely won’t sound any alarms, but instead will use so-called soft tactics to get your payment in. They will call, email and send letters, but all contact will be friendly and helpful, says Bruce McClary, media director of ClearPoint Credit Counseling Solutions. McClary has also worked as a debt collector. The creditor may also contact the credit reporting bureaus to report your account as delinquent.

“Just walking away from a debt won’t solve the problem,” says Barry Paperno, consumer affairs manager for myFICO.com.

Your options: If you know you’ll miss a payment, contact the lender first, says John Ulzheimer, president of consumer education at SmartCredit.com. The creditor will be more likely to work with you if you reach out first. If you don’t and the creditor contacts you, don’t avoid the call. Explain your financial dilemma to your creditor so you both can work out a payment plan.

Stage 2: 60 Days Past Due

Trigger: It’s been a month since your due date and two months since the billing cycle started.

What to expect: Your credit card account likely will go into collections status and will be turned over to a department that specializes in obtaining delinquent debt, says McClary. The friendly phone calls, letters or emails will turn a bit more aggressive and less positive. The creditor will warn you that your account could go into serious delinquency if you don’t resolve the situation. Also, the creditor may contact the reporting bureaus to report your account as delinquent if it hasn’t done so already.

Your options: You and your creditor can still work out a payment plan or come up with a hardship plan if your financial situation merits one, says Laura Creamer, a financial education specialist at the nonprofit credit counseling service CredAbility. You likely will have to pay a penalty fee.

Stage 3: 90 Days Past Due

Trigger: Two months have passed since your due date and three months since the billing cycle started.

What to expect: More aggressive phone calls, emails and letters from your creditor. There’s a good chance your creditor will shut down the credit card account and you won’t realize it until you are denied in a store. That should prompt you to call the company and work out a solution. The creditor is most likely reporting the delinquency to the credit bureaus. At the same time, late fees and interest fees add to the total amount you owe.

Your options: There is a chance you can reactivate the account by setting up a payment plan with the creditor, says McClary. If you’re facing a financial hardship, your creditor may establish a payment plan with reduced payments. Once you complete the plan, the account may be revived.

Stage 4: Charge-off Status

Trigger: The creditor has been unable to get payment and writes off the debt as uncollectible.

What to expect: The creditor may sell or contract the account with a third-party debt collector. The creditor will notify the credit reporting agencies that your account is a charge-off and has gone into third-party collections.

The third-party debt collector will call and send emails and letters. They must abide by the Fair Debt Collections Practices Act, which outlines when third-party collectors can call and how often.

Your options: Get verification of the debt from the third-party collector and confirm the collector’s identity with the original creditor. Set up a payment plan or offer a settlement. Try to negotiate a settlement with the original creditor, which may offer more flexibility. The creditor or debt collector probably won’t settle for less than half the balance.

“But shoot for the moon on your first offer,” says McClary, “because you never know.”

Get the offer in writing with a clause that states the collector or creditor won’t sue you if you make the payments. Ensure that your credit report reflects any settlement as settled in full, which indicates your obligation to the creditor is fulfilled.

Stage 5: Court

Trigger: The third-party debt collector is unable to contact you — the consumer — and sues.

“You can ignore a lot of people, but you can’t ignore the guy who knocks on the door with a judgment,” says Ulzheimer.

What to expect: You will receive a summons to appear in court regarding your debt. If the debt collector or creditor receives a judgment, then it may garnish your wages or seize assets such as bank accounts to satisfy the debt.

Your options: If you receive a summons, show up for your court hearing, says Creamer. There, you can dispute the debt. Otherwise, it’s an automatic win for the collector, she says.

The judge may also serve as a mediator and create some kind of repayment plan before choosing wage garnishment or the seizure of assets.

Things to Remember

• The federal Fair Debt Collections Practice Act doesn’t cover debt collection calls from the original creditor.

• Know your state laws. Each state has different laws regarding wage garnishment, seizure of assets and statute of limitations for debt collection.

• Any payment will restart the statute of limitations. “Some collectors will try to trick you as the statute is approaching. They will call and ask for just a small payment, like $10, to renew the statute,” says Andrew Housser, a board member of the American Fair Credit Council, a group formerly known as The Association of Settlement Companies.

• All information regarding the delinquent account will live on your credit report for seven years from the date you first missed a payment, says Rod Griffin, director of public education at Experian.

• Third-party debt collectors sometimes sell off debt to another debt collector if they haven’t had any success. Make sure the debt shows up as the same account on your credit report. Sometimes it may look like another delinquent account, and you’ll want to dispute any duplicates.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

If your credit reports are riddled with numerous late payments or major black marks – like a recent foreclosure or a fresh bankruptcy filing – it probably comes as no surprise that you’ll have a tougher time getting a loan than someone with perfect credit.

But what about those of you who have decent credit ratings, or maybe even good credit? A solid FICO score alone frequently isn’t enough to get a loan application approved, especially if other items on your application are sending up warning signs to a lender.

Here are three red flags – on your credit reports and elsewhere – that could cause lenders to think twice about extending you credit.

1. Too many credit card accounts

What’s the “ideal” number of credit cards you should carry? Frankly, no one knows. It all depends on what a lender is looking for. It’s one thing to have a good mix of credit and an adequate number of credit cards from the standpoint of the FICO scoring system or another credit scoring model such as the VantageScore.

But it’s another thing entirely to fit a lender’s profile of an ideal customer. Banks often use their own customized, credit-scoring software. Additionally, they may judge your request for credit based on your overall “application score.”

Whereas a FICO score focuses on elements like your payment history and outstanding debt balances, your application score will assess everything you state on your credit application, from how long you’ve lived at your current address to your income to the length of time you’ve been at your present job. None of these are factors included in your FICO score.

Of course, if you’re trying to get approved for a credit card application and you’ve already got a wallet full of plastic, don’t be surprised if you get denied on the basis that you already have “sufficient” credit. Sufficient to some banks means you have enough cards. Sufficient to other banks means you have enough credit in terms of your credit limits.

Either way, since lender guidelines vary based on each institution’s risk appetite, it’s not uncommon for a person deemed to have “sufficient” or “too much credit” by one firm to be judged as a perfectly safe lending risk by another firm.

2. Having a 100-word “Consumer Statement”

If you had a financial problem in the past – say you were downsized or went through a nasty divorce – you certainly wouldn’t be the first person to have fallen behind on your bills during such an ordeal. (See this article on how to bounce back from bankruptcy).

If you later tried to clean up your credit, you may have been advised to add a 100-word “Consumer Statement” to your credit reports. Individuals use such statements to refute late payments, offer their side of disputed credit accounts or to generally explain to potential creditors, employers and others why something negative is present in the credit reports.

Even though the Fair Credit Reporting Act gives you the right to add a Consumer Statement to your credit reports, doing so is typically a mistake and can be a turnoff to lenders. Will a Consumer Statement cause a lender to kick your mortgage application into the rejection heap? Not likely.

Still, no matter what carefully crafted explanation you come up with, you run the risk of looking like a bad credit risk to a lender. And if you do have a borderline application and an underwriter has to review your home loan request manually, you don’t want to give that person any reason not to give you the benefit of the doubt.

At best, by “explaining” what happened, a Consumer Statement lumps you in with scores of other consumers who are offering justifications – from the legitimate to the completely ridiculous – about why they have a damaged credit rating. At worst, a Consumer Statement can make you look financially irresponsible and guilty of whatever infraction(s) your creditor(s) said you committed.

Another downside: Unless you ask for it to be deleted, a Consumer Statement will remain on your credit reports for 10 long years. Read more of my advice on why it’s best to avoid adding a Consumer Statement to your credit reports – and how to get rid of that statement if you’ve got one.

3. Evidence of recent credit shopping

Whenever you apply for credit, some institution will pull your credit report – and maybe even a “tri-merged” credit report – to check out how you’ve handled your financial affairs. Those reviews of your credit status result in “hard inquiries,” which stay on your credit reports for two years.

Even if you’re up-to-date with all your bills, if you’ve recently been shopping around for credit and allowing numerous banks or other entities to peek at your credit rating, that could hurt your chances of winning a “Yes” from the lender of your choice. (See these 5 surprising things that hurt your credit scores).

First of all, all those inquiries could lower your credit scores, jeopardizing your loan application. Additionally, some lenders may ask you to explain your recent behavior. Just because a recent inquiry shows up on your credit report, another lender has no immediate way of knowing:

a) whether or not you were approved for credit; and
b) whether or nor you accepted that credit or loan offer.

So a prudent lender that sees a relatively recent inquiry will want to know whether or not you took on new credit obligations that may not yet be showing up in your Equifax, Experian or TransUnion credit reports. Before approving a mortgage, a lender may even ask you to attest, in writing, that you’ve not racked up any other debts than what now appears on your credit reports.

All of these red flags serve as reminders to manage your credit and debt wisely. This way, when you’re in the market for a loan, you’ll get the best rates and terms available.

You also won’t have to jump through all sorts of hoops explaining what could be viewed – at least from a lender’s perspective – as red flags in your credit reports.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

If you’re an even semi-regular WalletPop reader, you know the importance of a good credit score. Not only is it your golden ticket to getting better rates for things like mortgages and credit cards, it also may help you get lower rates for auto insurance, rent an apartment and even get a job.

But with lenders continuing to tighten their standards even as the credit crunch eases, Americans have to keep close watch on their scores. Even a small slip could mean the difference between qualifying for a lender’s prime rate or not.

If you’re one of the many consumers just treading water with your credit score or trying to keep a small mistake from mushrooming into a financial crisis, read on. WalletPop spoke with credit score experts and asked them what steps you can take to save your credit score now.

1. Check Your Credit Report
Credit reports can contain numerous errors, from records of nonpayment by someone with a similar name as yours to old or out-of-date loan information. Readers have told WalletPop of mix-ups involving similar names, incorrect reporting of credit limits and “black marks” that should have been stricken from the record years ago. The only way these readers — and you — can find out about mistakes that can drag down your score is to check your report regularly and go over it with a fine-toothed comb.

2. Set Up Automatic Payments
The biggest score-killer is late payments, says Mary Ann Campbell, a personal finance expert for IndexCreditCards.com. “Set up an automatic payment for the minimums so they’re never late again, because those late payments can become a vicious cycle and have such a big impact on your score,” she cautions. Of course, it’ll be up to you to make sure you have enough money in the account to cover those bills, since overdrawing your account could exacerbate your problem if you get dinged with overdraft fees.

3. Come Up With a Crisis Plan
Many people fell behind on their credit cards after a job loss and are now saddled with bad credit through no fault of their own. To prevent this from happening to you, take a page from countries’ and major corporations’ playbooks and create a “disaster plan” for your finances, says Laura Creamer, a financial education specialists at consumer credit counseling organization CredAbility. First, build up an emergency cushion of savings by funneling a small amount from each paycheck into a separate, no-fee savings account; if you get a raise or a bonus, split the surplus and sock away half of it. Second, if you do experience a job loss or take a big pay cut and find yourself unable to make the minimum payments on your credit cards, get in touch with your creditors before you fall behind and explain your situation.

“The first thing for those who are experiencing something like unemployment is making sure they’re keeping in contact with their creditors,” Creamer says. While that won’t prevent your score from dropping if you miss payments, some issuers have hardship programs that could keep a bad situation from getting worse by offering leniency on fees and interest rates.

4. If You Do Miss a Payment, Don’t Let It Snowball
Thanks to the CARD Act, credit card issuers can’t slap you with punitive rate increases if you have a single late payment, but late fees could make it harder to stay on top of your bills. Plus it’s a slippery slope from slightly late to late-enough-to-impact-your-score.

“A lot of people get stressed out that their score will drop if they’re a couple of days late,” says Odysseas Papadimitriou, CEO and founder of Evolution Finance. He’s quick to add, though, that getting complacent about on-time payments is the quickest way to watch the fees pile up and your credit score go down. Especially if you don’t have the option of not using a credit card, late payments will lead to interest rates that could be nearly double what cardholders with good credit are paying.

5. If You Do Slip, Rebuild Quickly
If your credit is so bad that conventional card issuers have closed off your accounts — especially if those closures are due to nonpayment or charge-offs – it’s imperative to begin reestablishing your creditworthiness as quickly as possible. “If you have bad credit, the best way to improve that is with a secured credit card,” Papadimitriou says. While there are fees associated with these cards, you’re basically using your own money to restore your credit.

By contrast, popular prepaid debit cards don’t report to credit bureaus, so they can’t help you achieve a higher score. “Over time, all secured cards allow you to increase your deposit and your credit line,” Papadimitriou says. “That’s important because creditors like to see that you have available credit that you don’t use. Even if it’s just $50, take it and increase your deposit.”

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

Bad credit can limit your ability to get a loan or score a low-interest rate on a credit card, but that’s not all it can do. It can also rear its ugly head in the workplace, making it harder for you to do your job or even — in a frustrating catch-22 — keep you from getting a job that could help you break your cycle of debt and poor credit.

Teresa Turner, right, a former Realtor in California whose livelihood was decimated when the real estate market crashed, knows this firsthand. When her business started to go south in early 2008, she began relying on credit cards, confident she could ride out a slow patch. Today, she’s considering filing for bankruptcy, and she suspects her problem landing a new job is directly related to the hit her formerly good credit has taken in the interim.

“Typically, during a normal economy, I can find a job within three weeks,” says Turner. “Now, it’s obviously been a lot more challenging. When you send out resumes, you don’t get any kind of response.”

Turner’s been pounding the digital pavement, looking for a job in property management, as a Realtor’s assistant or even as a general administrative staffer. Unable to land even a job for which she’s overqualified, Turner says she suspects her $30,000 in unpaid debt and ability to catch up on her payments are the culprit.

More than once, Turner says, a potential employer has expressed an interest, then backed off when Turner gave them the heads-up that her credit history was blemished due to her prolonged unemployment.

“In one of the emails I got back once I’d explained to them my situation via email, they said if someone commits fraud, they have a low credit score,” Turner says. “At that point, I felt I was being labeled as undesirable or a crook. I felt like it was discriminatory.” Other times, when she was forthcoming about her financial hardship, hiring managers just stopped communicating with her.

“The credit score is a great equalizer,” says Bruce Hurwitz, president and CEO of Hurwitz Staffing Services, explaining why employers use your financial history as a screening tool. (One point: Employers don’t actually see your three-digit FICO score if they do a background check that includes a credit check; what they get is your credit report, which shows things like missed payments, chargeoffs and accounts gone to collections, all of which could be potential red flags.) Nevertheless, in this still-challenging labor market, companies can afford to be picky.

John Beaudette, vice president and operations manager for Employment Screening Services in Washington, says only 13% of employers do credit checks on everyone they hire, while 47% include them for certain positions, such as jobs that involve handling financial accounts, cash or valuables. For his firm, Beaudette says only 20% to 30% of clients request such information, and adds that industries such as financial services, insurance and security tend to rely more heavily on credit checks. If your credit is wrecked and you’re out of work, it’s probably best to look for a job that won’t require a high degree of financial autonomy.

Even if you have a job, lousy credit can make it more difficult for you to do your job and garner the respect of your colleagues and bosses. A judgment against you by a collection agency can lead to wage garnishment, which forces your employer to get involved in your financial struggles.

“People are amazed at the level you can be dragged through the mud when there’s a judgment against you,” says Erik Kardatzke, a garnishment attorney in Florida. “At least half the time they didn’t know they had a judgment.” On the other hand, Kardatzke says some collection agents will illegally call your workplace repeatedly and talk to your colleagues about your money problems. If this happens, Kardatzke says you can take legal action, but the damage to your reputation at work may already be done.

If a judgment awards a creditor the right to garnish your wages, Kardatzke says they’re entitled to 25% of your disposable income per paycheck until the debt is paid off. Different states have different procedures and exemptions, so it may be worth hiring a legal professional to fight the garnishment attempt. Be prepared to assure your boss, though, that your legal and fiscal troubles won’t interfere with your job performance.

Poor credit can also put a crimp in your ability to do your job if your position requires travel, since activities like booking airline tickets, or reserving hotel rooms and rental cars require a credit card. While some big companies have corporate credit cards that can be used for this, this option isn’t available to everybody. (Some small businesspeople and consultants like using their own cards because they can then keep any rewards they earn on their spending.)

Without a credit card, though, business travel grinds to a halt. Carol Margolis, a travel consultant in Florida, says she’s forced to use her own personal credit card and put her own financial security on the line when one of her team members doesn’t have a credit card for expenses. While she says she’s never had anyone abuse this privilege by, say, raiding the minibar on a nightly basis, the accounting is a tremendous headache. “When a team members comes to me and says they don’t have a credit card, I try not to let my face sink,” she says.

In addition, the lack of a credit card can make a businessperson look bad in front of customers, Margolis says. “If they’re expected to take a client out to dinner, they can’t,” she says, “and it makes them look bad.” As a result, Margolis has to take extra time and effort to make sure credit-less team members only go on trips with colleagues who do have cards.

Margolis says she prefers employees to be honest about their limitations, recalling one woman who would make up stories about her wallet being stolen — repeatedly — to cover up the fact that she didn’t have access to a credit card. She admits, though, that even full disclosure leaves her with a bad taste in her mouth.

“Once I hear they don’t have a credit card, the respect I have for that person goes down,” she explains. “I think, they may be able to do their job okay, but they can’t handle their life.”

Honesty is still the best policy when it comes to bad credit in the workplace, but that has to be combined with a willingness to tell bosses and coworkers who are affected by your credit how you’re working to improve your situation.

“The idea is to convey that you know your situation, you’re not hiding anything, you’ve got it under control to the greatest extent possible, and it’s your priority to fix the problem,” says Hurwitz.

Even if your credit is in shambles, don’t give up hope. Hurwitz says he’s heard back from clients who went on to land jobs in spite of poor credit by following that basic script.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

ALBANY, GA – What does your credit score and employment have in common? In some states it’s the determining factor of whether or not you get the job.

There are several legal proposals being debated all over the country. Most of the bills are trying to limit credit checks in the hiring process.

Human Resource groups say they’re only used for hiring those in finance and management.

Not paying after you swipe that card could end up costing you. “My credit’s good but, I have been there in the past,” said Mary Hilley.

She was a single mom for years. And trying to support a family by herself was tough. “You don’t always know the underlying reason, of why the person has bad credit,” she said.

But is a credit score a good judge of character? “I don’t think it’s a good idea. People can rebuild their credit,” said Hilley.

However companies tend to think otherwise. Any job dealing with money, or sensitive information requires a credit check. “What your credit report says about you, is an important factor. Because it relates to whatever the job may be,” said Credit Counselor Steve Sadler.

“They obviously need more money to take care of that problem,” said Hilley.

Mary found her credit solution through budgeting and going back to school. “My education is the best thing that helped me. It gave me the confidence to go on and start over,” she said.

“The reason so many people are having problems, keeping up with bills is the economy,” said Sadler.

But job hunters should try to get their debt under control. “Getting your credit score and contesting things that may not be yours is helpful,” said Sadler.

“Just remember later on down the road, it’ll be worth it,” said Hilley.

Don’t let a credit score keeping you from getting the job. Credit Counselors say pay your bills on time.

Also let the employer know the circumstances behind your credit score.

Consumer Credit Counseling Service of Southwest Georgia will assist anyone trying to restore their credit.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

A few simple steps can put you on the path to creditworthiness — or prevent you from falling off.

Five years ago Mikaal Bates was about to pool his money with some friends and make his first real estate investment. He didn’t expect any trouble on the credit score front, as he’d always paid all his bills in full and on time. But when Bates received the credit report he needed to get the loan and seal the deal, he found a nasty surprise: Thousands of dollars in unpaid phone bills racked up by someone who’d stolen his identity.

“I had bartended at a few less-than-reputable establishments, and someone had gotten hold of my social security number,” says Bates, an actor, now 31. “I ended up with an unpaid $2,000 bill for calls from the U.S. to the Dominican Republic. Took me close to a year before I got everything straightened out and had everything expunged.”

Bates’ situation is the product of illegal acts committed by malicious strangers, but plenty of people unwittingly do comparable damage to their own credit scores. Careless acts can eat into your credit score — and you may only discover the damage when there’s a car loan, mortgage or business loan on the line.

Fortunately there are a number of steps you can take to preserve and improve your credit score. The most important ones are matters of common sense, yet they’re too often ignored. First and foremost: timeliness, both with credit cards and other bills.

“With any kind of credit obligation it’s really critical to always pay on time,” says Ben Woolsey, director of marketing and consumer research for CreditCards. “Don’t ignore any obligations like student loans or utility bills or cellphone bills. Lenders are starting to scrutinize those sorts of things.”

Paying bills on time is just one of many steps savvy consumers should take. Another is to carefully manage your debt levels and the percentage of your credit lines you use. It’s never a good idea to carry a balance on your credit card; though the balance itself doesn’t directly affect your score, interest can cause the total to pile up quickly. And raising your debt-to-credit ratio (also known as utilization rate) does affect your score, says Jake Gibson of credit card research site Nerd Wallet.

Say you’re carrying a $4,000 balance on a credit card that allows you to charge up to $5,000. That high 80% utilization rate will damage your credit score more than a $4,000 balance on a card with, say, a $12,000 limit.

Paying off debt can help get your creditworthiness back on track. But think carefully about where to start.

“Get any revolving credit paid off,” recommends Steve Juetten, a financial planner in Bellevue, Wash. “Start with the card with the lowest balance and strive to have that one paid off first. Once it’s done, move to the one with the lowest balance and so on.”

Other rules of thumb include requesting an increase to your credit limits and using different forms of credit. But don’t overdo it — holding more than four credit cards can start to damage your score. It can also hurt if the total of your available credit lines begins to exceed your household income. Even if you have always paid your bills on time, having $80,000 of available credit when you make $60,000 per year means you have the potential to spend yourself into debt, and that might make the next lender wary.

Above all, remember that building a good credit score isn’t something that can be done overnight.

“The biggest misconception about improving credit scores is that it’s something that can be done quickly,” says Juetten. “It’s not. It takes time.”

How to Make or Break Your Credit Score

Keep your credit cards paid off.
Though simply carrying a balance won’t damage your score, it will if your debt utilization rate (the ratio of debt level to credit available) starts to climb above 50%. Pay your balance in full every cycle if possible.

Pay your bills on time.

With any kind of credit obligation it’s really critical to always pay on time, even if you can’t pay in full. Late payments will hurt your credit score.

Use different forms of credit.
Holding a variety of lines — car loan, installment loan, mortgage, store card, credit card — can improve your credit score, as long as you’re mindful of the first two steps.

Develop a history of credit.

Maintaining responsible payment habits over time will increase your score.

Don’t overburden your credit lines.
It’s best not to use more than half of any given credit line, and even better not to use more than one-third.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

Yep, mortgage interest rates are low, but there’s a catch: It doesn’t matter how cheap rates are if you can’t get a loan.

And these days, only highly qualified borrowers can get financing — let alone the best rates.

Nearly a quarter of people who apply for loans are turned down, according to the Federal Reserve.

“Good borrowers with one or two blemishes on their credit are being denied credit,” said Lawrence Yun, chief economist for the National Association of Realtors.

The denial rates tell only half the story. Many potential buyers aren’t even applying for loans because they assume they can’t get one.

“A lot of people know it’s very difficult to get a mortgage and they’re not even trying,” said Alan Rosenbaum, CEO of GuardHill Financial, a New York-based mortgage broker.

That shows up in credit scores for loans financed with backing from Fannie Mae and Freddie Mac. The average credit score has risen to 760 from 720 a few years ago. For FHA loans, the average score has gone to 700 from 660. Loans made to borrowers with sub-620 scores are almost nonexistent.

Another factor keeping people out of the mortgage market is that lenders now require much more up-front cash. The median down payment for purchase is about 15%. During the housing boom, it approached zero.

On most loans, banks want 20% down. On $200,000 purchases, that’s $40,000, an insurmountable obstacle for many young house hunters. Or, in New York City, where the median home price is $800,000, buyers need $160,000 up front.

Industry insiders say all these factors have reduced the pool of buyers, lowering demand for homes and hurting prices.

“We feel it really reduces the demand for houses,” said Mike D’Alonzo, president of the National Association of Mortgage Brokers. “It’s an unbelievable buyer’s market, but there hasn’t been as much activity as you would expect because not as many people qualify for loans.”

Jerry Howard, CEO of the National Association of Home Builders said, “You only have to look at the recent sales reports to see what the impact of the credit crunch has had. The statistics speak for themselves.”

Sales of existing homes in February, despite very affordable prices, were 30% off their peak, and home prices fell for the sixth consecutive month in January.

Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, speculates the tougher credit standards may have stripped as much as 30% of the buyers off the market, compared with normal times.

And it’s about to get harder for buyers. Federal regulators proposed rules last week that are designed to discourage risky lending but that will also likely further restrict lending.

Banks would be required to keep 5% of some loans, specifically those with less than 20% down payments, on their books rather than selling them all off as securities. As a result, banks make be unlikely to issue loans where less than 20% is put down. So much for first-time buyers.

“We think the new rules are appalling,” said the NAHB’s Howard. “Only the wealthy will be able to buy homes at low interest cost.”

It could also further erode consumer demand for homes.

“It’s disturbing,” said Lennox Scott, head of John LA. Scott Real estate in the Pacific Northwest. “We’re just starting to feel healthier in inventory levels and prices and this is a potential headwind.”

The immediate impact, should the new regulations get adopted, should be minor, according to Steve O’Connor, spokesman for the Mortgage Bankers Association. That’s because Fannie, Freddie and FHA loans are all exempt from the requirements and they represent more than 90% of the market right now.

The government, however, wants to reduce the presence of all three agencies in favor of private lenders, and banking experts fears the long-term impact of abandoning the field to mostly private companies.

“For the first time in 100 years,” said Howard, “the government is discouraging you. It’s saying ‘We intend to make it more difficult for you and your kids to buy homes.’”

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

Bad credit can limit your ability to get a loan or score a low-interest rate on a credit card, but that’s not all it can do. It can also rear its ugly head in the workplace, making it harder for you to do your job or even — in a frustrating catch-22 — keep you from getting a job that could help you break your cycle of debt and poor credit.

Teresa Turner, right, a former Realtor in California whose livelihood was decimated when the real estate market crashed, knows this firsthand. When her business started to go south in early 2008, she began relying on credit cards, confident she could ride out a slow patch. Today, she’s considering filing for bankruptcy, and she suspects her problem landing a new job is directly related to the hit her formerly good credit has taken in the interim.

“Typically, during a normal economy, I can find a job within three weeks,” says Turner. “Now, it’s obviously been a lot more challenging. When you send out resumes, you don’t get any kind of response.”

Turner’s been pounding the digital pavement, looking for a job in property management, as a Realtor’s assistant or even as a general administrative staffer. Unable to land even a job for which she’s overqualified, Turner says she suspects her $30,000 in unpaid debt and ability to catch up on her payments are the culprit.

More than once, Turner says, a potential employer has expressed an interest, then backed off when Turner gave them the heads-up that her credit history was blemished due to her prolonged unemployment.

“In one of the emails I got back once I’d explained to them my situation via email, they said if someone commits fraud, they have a low credit score,” Turner says. “At that point, I felt I was being labeled as undesirable or a crook. I felt like it was discriminatory.” Other times, when she was forthcoming about her financial hardship, hiring managers just stopped communicating with her.

“The credit score is a great equalizer,” says Bruce Hurwitz, president and CEO of Hurwitz Staffing Services, explaining why employers use your financial history as a screening tool. (One point: Employers don’t actually see your three-digit FICO score if they do a background check that includes a credit check; what they get is your credit report, which shows things like missed payments, chargeoffs and accounts gone to collections, all of which could be potential red flags.) Nevertheless, in this still-challenging labor market, companies can afford to be picky.

John Beaudette, vice president and operations manager for Employment Screening Services in Washington, says only 13% of employers do credit checks on everyone they hire, while 47% include them for certain positions, such as jobs that involve handling financial accounts, cash or valuables. For his firm, Beaudette says only 20% to 30% of clients request such information, and adds that industries such as financial services, insurance and security tend to rely more heavily on credit checks. If your credit is wrecked and you’re out of work, it’s probably best to look for a job that won’t require a high degree of financial autonomy.

Even if you have a job, lousy credit can make it more difficult for you to do your job and garner the respect of your colleagues and bosses. A judgment against you by a collection agency can lead to wage garnishment, which forces your employer to get involved in your financial struggles.

“People are amazed at the level you can be dragged through the mud when there’s a judgment against you,” says Erik Kardatzke, a garnishment attorney in Florida. “At least half the time they didn’t know they had a judgment.” On the other hand, Kardatzke says some collection agents will illegally call your workplace repeatedly and talk to your colleagues about your money problems. If this happens, Kardatzke says you can take legal action, but the damage to your reputation at work may already be done.

If a judgment awards a creditor the right to garnish your wages, Kardatzke says they’re entitled to 25% of your disposable income per paycheck until the debt is paid off. Different states have different procedures and exemptions, so it may be worth hiring a legal professional to fight the garnishment attempt. Be prepared to assure your boss, though, that your legal and fiscal troubles won’t interfere with your job performance.

Poor credit can also put a crimp in your ability to do your job if your position requires travel, since activities like booking airline tickets, or reserving hotel rooms and rental cars require a credit card. While some big companies have corporate credit cards that can be used for this, this option isn’t available to everybody. (Some small businesspeople and consultants like using their own cards because they can then keep any rewards they earn on their spending.)

Without a credit card, though, business travel grinds to a halt. Carol Margolis, a travel consultant in Florida, says she’s forced to use her own personal credit card and put her own financial security on the line when one of her team members doesn’t have a credit card for expenses. While she says she’s never had anyone abuse this privilege by, say, raiding the minibar on a nightly basis, the accounting is a tremendous headache. “When a team members comes to me and says they don’t have a credit card, I try not to let my face sink,” she says.

In addition, the lack of a credit card can make a businessperson look bad in front of customers, Margolis says. “If they’re expected to take a client out to dinner, they can’t,” she says, “and it makes them look bad.” As a result, Margolis has to take extra time and effort to make sure credit-less team members only go on trips with colleagues who do have cards.

Margolis says she prefers employees to be honest about their limitations, recalling one woman who would make up stories about her wallet being stolen — repeatedly — to cover up the fact that she didn’t have access to a credit card. She admits, though, that even full disclosure leaves her with a bad taste in her mouth.

“Once I hear they don’t have a credit card, the respect I have for that person goes down,” she explains. “I think, they may be able to do their job okay, but they can’t handle their life.”

Honesty is still the best policy when it comes to bad credit in the workplace, but that has to be combined with a willingness to tell bosses and coworkers who are affected by your credit how you’re working to improve your situation.

“The idea is to convey that you know your situation, you’re not hiding anything, you’ve got it under control to the greatest extent possible, and it’s your priority to fix the problem,” says Hurwitz.

Even if your credit is in shambles, don’t give up hope. Hurwitz says he’s heard back from clients who went on to land jobs in spite of poor credit by following that basic script.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

Why does your credit score matter so much? Well, it’s what almost every company in your life uses to determine whether you are a credible, trustworthy borrowing candidate. From your prospective employers to your prospective landlords, most companies will check your credit report in order to assess you. However, if they only have access to your report, one can assume that they can still speculate as to how credit-worthy or responsible you might be. Too many active lines of credit can be a red flag for some places, although without the score, it can be hard to tell. As always, please check the laws of where you are living, as they may be different from state to state and country to country.

Everyone makes mistakes from time to time, but knowing what actually hurts or helps your credit score will help you present yourself in the best light possible when it comes to wanting to land that job, secure that dreamy apartment or buy your first home. To make sure you know what doesn’t factor into your credit score, here are some slipups that you can breathe easy about.

1. Having a Low or High Income

You may find information about your employer listed on your report, but your income has no impacts on your credit score. So if you earn a low salary, don’t fret about it being a factor when you go to ask for a loan – just be certain that you can pay on time, because those payments will affect your credit score.

2. Not Paying Insurance, Utility and Cell Phone Bills

These companies check your credit score to figure out whether to insure you, or to provide you with their services, but although they use your score to make a decision, they don’t report any of your payments to the credit agencies. However, if you continually default on your payments, your account may be sent to the collections agency who would then report to the credit bureaus.

3. Missing Rent Payments

Much like the insurance, utility and cell phone providers, if you pay your rent on time, it won’t help your credit score because the credit bureau would ignore it even if it appeared on the report. As with all bills, if you fall behind on your rent, it could lead to you getting officially evicted, which will hurt your credit score.

4. Bank Overdraft

Going into overdraft can get expensive, if you do it all the time, but it won’t hurt your credit score if you can settle it before your bank sends your account to a collections agency.

4. Bank Overdraft

Going into overdraft can get expensive, if you do it all the time, but it won’t hurt your credit score if you can settle it before your bank sends your account to a collections agency.

6. High Interest Rates

Lenders tend to give the best rates to those with the best credit scores, but your credit score influences your interest rate, rather than the other way around. So if you have a high interest rate on your loans, don’t worry about it continually impacting your credit score.

7. Credit Counseling

Credit counseling is nothing like declaring bankruptcy; even though it appears on your report, it won’t hurt your credit score. If your counselor is handling the payments for you, check on a regular basis that the payments are arriving on time, because late payments will hurt your score even though they’re coming from a credit counselor.

8. Your Age

The only relationship between your age and your credit score is that you don’t have enough of a history. Think of it like this: if you start at a new job, fresh out of college, you aren’t going to expect to be the president because you don’t have enough work experience for the job. It’s the same thing with credit scores – someone older than you will have more of a credit history and may seem more trustworthy than you, even if they made mistakes early on, because lenders take the whole history into consideration.

The Bottom Line

Credit scores impact almost every aspect of your life, from where you can live to where you can work, but keep in mind that credit scores are not the only indicator of how financially fit you are. Anyone who has a lot of debt, but manages to make their minimum payments on time every month, will have a stellar credit score, but their financial health will still be in jeopardy.

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com

There are certain things that we discover are just an illusion as we grow up: Santa Claus, the Easter Bunny and the Fountain of Youth are a few. However, much like Big Foot, one myth that persists well into adulthood, is the perfect credit score. Some swear they’ve seen it, others think it’s impossible.

“Never in my life have I met anyone with an 850 credit score,” Bruce McClary of Clearpoint Credit Counseling Solutions, who has worked in the credit industry for years, tells MainStreet.

According to FICO, the company that designed our current credit model, these overachievers are out there. Craig Watts, senior manager for Public Relations for FICO, tells MainStreet that while most people score in the middle-to-low 700s on their credit scale, less than 1% of the U.S. population (about 1 million people) do, in fact, net a full score of 850.

“They tend to be more conservative and a little older,” Watts explains. He adds that these individuals also tend be rather humble, which may explain the near mythic status they have inadvertently achieved.

“We don’t get too many of them in our forums,” he admits. “They aren’t the type of people who stand up on a bus and tell everyone they scored an 850.”

People who don’t share their score aren’t likely to share their secrets for attaining it either. Which is unfortunate, considering that the credit elite obtain the lowest annual percentage rates, get the best credit card rewards programs and qualify more readily for large loans.

It’s a noble goal to try to achieve,” McClary says. However, he explains that you don’t need to reach perfection to be considered among the credit elite.

“In reality, you don’t have to have an 850,” says John Ulzheimer, a former FICO employee now with Credit.com. Those with a FICO score above 760, he says, are typically privy to the same benefits as those with perfect credit.

Of course, a score that high isn’t easy to achieve either. To reach the top tier you have to master not just the basics — maintaining positive payment history and a low debt to credit ratio, but you must pay attention to the details as well. In an effort to help those with lofty credit aspirations, MainStreet has put together a profile of what these credit superstars look like.

They Have a Long and Impressive Payment History and a Clean Record

The bulk of your credit score is determined by your payment history and the amount of debt you may or may not have currently on file. Unsurprisingly, those with perfect credit scores use credit regularly while paying it off on time, every time. They also have a squeaky clean record. Ulzheimer explains that the credit elite have no debt to speak of. “No liens, no bank repossessions, no settlements,” he says. “Nothing.”

They Maintain a Diverse Set of Accounts

According McClary, credit lines fall into two major categories. Installment accounts are closed-ended and require consumers to pay a fixed amount each month until the entire balance has been depleted. These typically include mortgages or car loans. Revolving accounts, on the other hand, limit the line of credit, but have balances that fluctuate. These essentially are the accounts tied to the credit cards in your wallet.

Top credit scorers have a careful balance of both accounts on record. “They’ll have a mortgage, a car loan and a few credit cards on file,” McClary explains.

The bulk of your credit score is determined by your payment history and the amount of debt you may or may not have currently on file. Unsurprisingly, those with perfect credit scores use credit regularly while paying it off on time, every time. They also have a squeaky clean record. Ulzheimer explains that the credit elite have no debt to speak of. “No liens, no bank repossessions, no settlements,” he says. “Nothing.”

They Have a “Well-Aged” Credit Report

When I pulled my own credit report a few weeks ago, I was surprised to learn that my score, though quite good, still paled in comparison to my financial mentors, good old mom and dad. The truth is, unless they should both decide to stop managing their credit so meticulously, I stand little to no chance of ever surpassing them.

“One advantage to being older is that you tend to have a longer credit history,” McClary says. Keep in mind, though, that it’s not your age, but the age of your oldest credit account on file that influences your overall score. As such, you may want to keep open that store charge card you opened up on your 21st birthday.

They Have a Very Limited Number of Credit Inquiries on Record

On the other hand, those without a store charge card shouldn’t simply open one frivolously. While having large number of credit card inquires on file won’t dramatically decrease your score, it can keep you from joining the credit elite, especially if several inquiries are recorded over a short period of time. This is why Ulzheimer advises that you refrain from opening up a litany of store accounts during the holiday season, no matter what type of discount the retailer is offering as an incentive to do so.

“Applying for credit organically as you need it is fine,” Ulzheimer says, before cautioning “never use your credit score to get a 10% discount at the mall.”

If you need help with credit repair or wish to sign up for our credit repair services go to www.creditbureauexperts.com