Creditors in Your Closet

Let this debt-management plan rescue you from a haunted past

( was formed in 1997 to give these consumers an alternative to the high-interest loans car dealers traditionally offer them. Fairlane’s Advantage Program allows high-risk consumers to purchase a new entry-level vehicle or a dependable used car (no more than 3 years old) and to finance it at a credit card rate. After paying on time for two years, the interest rate goes down to market rate. The customer also qualifies for the pre-approval program, which allows them to buy their next new car directly through Ford Motor Credit, alleviating the high-interest rate. “Our goal is to allow people to rehabilitate themselves through the Advantage Program,” says Jerry Heimlicher, president of Fairlane Credit. “When you can make a fair profit and also help people, everything is all right in the world.”

Purchase Your Dream Home. It is a myth to believe that because you have negative credit, you can not finance your home through a major or mainstream mortgage lender at a decent interest rate. According to Hugh Rowden, assistant vice president for First Union Mortgage Corp., it is important to understand how credit impacts an individual’s life. “I go over the credit report to see if anything happened to cause the problem. There could be extenuating circumstances such as death or illnesses,” says Rowden ( “Have third-party documentation to support the circumstances such as medical, legal, or even police reports.” The credit bureau will also allow you to offer explanations in the form of a statement of up to 100 words on each account. This will give a prospective lender an understanding of why your payments were late.

First Union will finance consumers with past credit problems at market interest rates (or near market rates) on conventional loans after 12 to 24 months’ good payment history and bankruptcies and repossessions are more than 48 months old. FHA loans are less stringent and require 12 months of no late payments and bankruptcies and repossessions more than 24 months old. All judgments or collections must have been satisfied. “We do have risk-based pricing programs additionally that range from 1/4% to 11/2% above the market rate. Our highest risk-based program is Timely Payment Rewards, which automatically reduces the interest rate by 1% after 24 months of consecutive timely payments,” says Rowden.

Use Your Credit Card Wisely. You should have one major credit card on hand for emergencies, car rentals, tracking big-ticket items, and ordering via mail or the Internet. Just don’t abuse its use or you will slide back into financial disarray. To help you find the credit card that offers you the best rate, sign onto, an Internet company that distributes information relating to all types of payment cards. “If you have less than perfect credit, you still should not pay more than 4% over the prime-interest rate,” says Robert B. McKinley, CEO of “There are 6,000 credit card issuers in the United States. Use the leverage to negotiate a lower rate. Go to your personal bank or credit union since

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