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Originally Posted by BlaqK20
I think I get what LIBOR means now. Well not exactly, but I'm guessing its just another index that they go off from. Is there any reason why Prime, and Libor are the two most common ones?
Another scenario. I have a client who's credit is sub 500. About 490 is what he told me. Now he is in a dire need of cash but there is nothing I can do with him, even with hard money lenders (due to high LTV), unless his credit score raises back up to 500, or above. Now he has his mortgage, a few credit cards, and a sears card on the report. What would help him raise his credit the quickest? Paying the balance from one company, say sears, off completely? Or just making the monthly payments on each?
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The Prime and LIBOR index are most common simply because lenders make them - they could use any number of indexes to base their rates on, but choose those two most frequently. I'm sure there is reasoning behind it - and I would be willing to take a guess and say that those two indexes are the most likely to stay ahead of the bond market.
As far as the scenario goes, I can't help you very much without either obtaining more information or actually seeing the credit bureau.
If you want to do it the hard way, I'll need these answers to help you determine what would increase his score the fastest.
What are all his open tradelines?
High credit limit on each tradeline?
Current balance on each tradeline?
Is he currently delinquent on anything? If so, how delinquent?
LTV that you are looking for, and what are you doing with the cash out? Are you using it to pay down his debts?
Current FICO scores from transunion, equifax, and experian...