Ever wondered why some people get PRE-APPROVED CREDIT CARDS every time they open the mail box?  Why?  Because just as banks don't loan their own money out, they don't offer their own credit cards either.

Many smaller banks want to be credit card issuers but, because of limited facilities for credit card processing, it is sometimes difficult for a smaller bank to cash in on the credit card boom. What's been developed is an interconnect system where large banks will process credit card applications and issue the credit cards for the little banks.

For example, let's say that Snow Lake Savings & Loan wants to get in on the Plastic Pursuit. However, Snow Lake does not have the facility or the staff to process credit card applications and issue credit cards. What Snow Lake has to do is contract the service with Big Pockets Bank.

Since Big Pockets has several banks that they provide this service to, Snow Lake Savings & Loan is just a welcome addition to their roster of client banks for whom they process and issue credit cards.

When you apply for a credit card at Snow Lake Savings & Loan, your application is actually forwarded to Big Pockets Bank who runs a credit check and, granting you have good credit, issues you your choice of VISA or MasterCard with Snow Lake Savings & Loan's name on it.

However, since Big Pockets is the issuing bank and since it has your credit on their file, they can very well send you an application for their own credit card. They can also sell your name to their other client-banks who can offer you their credit cards on a pre-approved basis.

Another source that sells your name is the credit bureau. Because they can program their computers to search for names of existing credit card holders with clean and healthy files, they can provide issuing banks with a premium mailing list of people to whom the banks can send pre-approved credit card applications.

Creditors approve credit to those people who most closely match the right profile. They arrive at those conclusions by assigning point values to various items of information that are included either on your credit application or in a credit report.

    Credit card companies like scoring systems because as a large volume creditor, they can replace trained credit personnel with a relatively few employees who can quickly total number columns and determine if an applicant's point values add up to the right score.

    Scoring, of course, is done for one reason. A creditor just wants to know that the odds are high he will get his money back. Scoring systems are fine for those people who fit right into the right profile, but what about those who don't but could pay off their monthly obligations just as easily and reliably as the next person? If you are one of those people who just doesn't "fit the mold," you'll simply have to make a few adjustments in your application so that you do fit the scoring profile of what a creditor is looking for in a final total.

HOW CREDITORS RATE AN APPLICATION

    The first thing you should know is that every system is different. That in itself can work to your advantage. You could be rejected by one company's scoring system and approved by another. One creditor's system will give you many points for a good answer, and totally ignore a question that gives a negative answer. Another creditor can simply reverse the process.

    Keeping in mind that creditors use different scoring systems, we will list only the most important questions and briefly review how a response can affect your total score. The following categories are listed from the highest to lowest points awarded each response.

    RESIDENCE - The longer you have lived in one place the better. Stability is given high points.

    HOME OWNERSHIP - The best possible housing situation is to own your own home, even if it is mortgaged. The worst is: renting an unfurnished apartment, living with parents, living in a trailer or motel.

FHA ASSUMABLE HOME LOANS

    President Bush signed legislation making credit checks for home mortgages mandatory after December 1989. Prior to that date however, all loans are fully assumable without a mandatory credit check. There are four important factors that will allow you to purchase a home without a credit check and with a minimal down payment:

    1) As a home buyer, your application can be pre-approved and your loan without a credit check provided: a) The original VA loan was granted March 1988, or b) The original FHA loan was granted prior to December

  2) If the original home buyer made a small down payment on the sale price which was used primarily for closing costs and consequently did not buy any equity at that time.
    3) If most of the payments made by the original owner were applied to interest during the first 4-5 years and very little went towards the principal. In that event, very little equity would result from making payments. Or, if there was any equity it would probably have been reduced by depreciation or other home market conditions.
    4) The last factor would be low- or no-equity conditions that resulted from low inflation and other economic conditions that can decrease the value of property.

UNDERSTANDING WHAT EQUITY MEANS
AS A BUYING FACTOR

    In order to understand the buying significance of equity you must understand what it means. Equity is the difference between what real estate sells for (market value), and the payoff amount of the loan to a lender on that property. In other words, if you own a home with a market value or $100,000, but you owe the bank $99,000, your equity is $1,000. In tens of thousands of cases, VA and FHA homes can be purchased with little or no down payment because no equity has been built up.

TENS OF THOUSANDS OF HOMES
ARE AVAILABLE - INCLUDING YOURS!

    Click HERE if you have been dreaming about owning your own home someday, Dream No More! Right now at this very moment there are tens of thousands of homes for you to choose from that can be purchased with no credit check and no down payment. or with a very modest down payment.

Sounds incredible doesn't it? But remember, the only reason any seller requires a down payment in the first place is usually to recover the equity in their home. A small amount of equity requires a small down payment. No equity means no down payment!

DEAL WITH MOTIVATED SELLERS

    Your objective as a smart buyer should always be to buy real estate with little or nothing down. Even if a seller has equity, you can work out an arrangement that is to your benefit. For example, a seller may agree to carry all the paper on the transaction. This doesn't mean that the seller will receive no down payment where there is an equity consideration. What it does mean is that you shouldn't have to come up with cold cash out of your pocket.

    Extending credit to customers is the way creditors make money. If you convince them you are a good risk they will give you what you want. Basically, there are two ways you can achieve that goal.

    1) You can bypass the normal scoring methods that are used by impressing  the person processing your application that you are sincere, reliable, stable, and have the ability to make monthly payments on a loan or credit card account.
    2) You can tailor your answers to the application's questions and in that manner fit into the right scoring mold of what a good credit risk is, according to the formula they are using.

    That doesn't mean you should lie on your application. It simply means you should be aware that being compatible with certain stereotypes will work in your favor. Remember, a creditor can still verify the information you list in an application. Still, many people will twist the truth to put themselves in a favorable position. For example:

    1) Some applicants will list their parent's, a friend's, or a relative's address as their own residence and indicate they have lived there for years, knowing it probably won't be checked.
    2) Provided an applicant has a friend or employer who will go along with them, they can list a position and salary they don't really receive. Then when the creditor calls to verify employment the friend will support what the applicant has claimed to be true.
    3) Another way applicants instantly increase their salary is to set up their own corporation. After issuing themselves private stock with an inflated value, they list the stock as part of their salary.

MORE HOT TIPS ON HOW YOU CAN
STACK THE ODDS IN YOUR FAVOR!

    1) If you don't have a telephone, get one installed. The alternative is to make an arrangement with the telephone company and a friend or relative, to have your name listed with their phone number.
    2) If you have more than one job, list the one that provides you with the greatest income.
    3) Add up your income from all sources and place the total in your gross income listing. Be prepared to submit a supplement to your application if they want to verify your income with your employer.

    4) Many banks will have a list of "good" and "bad" reasons they are willing to loan  money on. Unless you are applying for a secured loan, you don't have to spend the money for the reason specified.  John H. borrowed money from the Snow Lake Savings and Loan.  Three weeks later the banker came cruising by and stopped short at sight of the new Cadillac in the yard.  He came knocking on the door. "Where did you get the money to buy that Cadillac?"

"Well, I got it from you," said John H.

"No," said the banker.  "You got a Home Improvement Loan from me."

John H. stepped the banker outside and gave him a good look at the Cadillac.  "Don't you think that Cadillac improves the looks of my home 100%?"

"Good" reasons include home improvement, education, loan to establish credit, medical treatment for you or your family, and secured loans for a home, car, boat, and other properties.

    "Bad" reasons include loans that create another obligation such as that created when you borrow money for a down payment and then have two payments to make; money to pay a fine or penalty; money to consolidate debts, unless you are doing it to get lower interest rates; an unnecessary luxury item; money to invest in gold with, money to finance politics; and money that you will loan to someone else. Use a little common sense in determining what type of loan a creditor may consider bad.

    5) Banks use dependent figures to determine what your living costs are. If you have more than two dependents you should indicate how they earn their own way or are self-supporting.

    6) If you don't own your own home, counteract this by showing how stable you are. For example, even though you have only rented in a new location for a relatively short time, you lived at your last residence for many years. Naturally, you did move to improve yourself in some way.

    7) Even job changes can be counteracted if each change increased your salary and improved your position.

    8) Don't ever let a creditor guess as to whether or not you can afford the extra obligation you are asking for. Make it obvious by the amount of your income. If you have more income sources than just your salary, include those amounts.