10/06/2022
DID YOU KNOW?
There are steps that one can take in order to raise their credit score. Some of those are quick fixes and can move a score quickly and some of those are long-term (1-3-5 year plans). Unfortunately, for the great majority of people, raising a credit score takes a significantly longer time than they are willing to wait when they are wanting to get financed for a home today.
These are the steps that someone should take in order to try to raise their credit score in a short period of time.
1. Get copies of all 3 credit reports so that all accounts can be
viewed.
2. Pay off all credit cards.
3. Call the collection companies (if there are any) and ask them if
they will issue a letter to REMOVE the collection from your
credit if you pay them. If they say that they will provide a
letter, then pay them and get the letter. If they say that they
will not provide a letter, then do not pay them (for right now).
Paying off credit cards and removing collections and negative items from the credit report is the only way to quickly raise a credit score in a short window of time (2-4 weeks).
Unfortunately, most people have too many derogatory items and too many late payments on their credit to truly increase their score in a short period of time. In these cases, these are the steps to take in order to raise the score. Additionally, it usually is a period of 1-3-5 years to get squared away. Also, sometimes declaring bankruptcy is a better option for some and simply starting over. In those cases, (and many similar cases), a family should really sit down and come up with a budget and a financial plan to make sure that bills are paid on time moving forward.
1. Get copies of all 3 credit reports so that all accounts can be
viewed.
2. Pay off all credit cards
3. Pay off all collections and derogatory items.
4. Receive copies of letters on all negative items and mail those
letters to the credit bureau or go online and submit them
electronically.
5. Open up 2-3 secured credit cards to help re-establish and build
credit.
6. Pay all bills on time for 1-3-5 years moving forward.
No one ever likes being told to try again in 2 years when they apply for a home; however, realistic expectations must be set. More importantly, they must make sure that they understand the full financial responsibility which comes with homeownership. For this reason, it is best to make sure that people who have had credit issues in the past get those issues addressed before buying a home.
What are helpful websites one can go to in order to begin reviewing their credit and monitoring their credit?
1. www.transunion.com, www.experian.com, www.equifax.com
a. These are the sites of the three credit bureaus in the United
States. On their sites, one can find a lot of great information
and educational material which can help empower people
and make them better at monitoring and following their
credit.
2. www.annualcreditreport.com
a. This is the website on which consumers are allowed to
receive one free copy of each credit report per year.
b. A consumer will not receive their credit SCORE going to
this site. In order to receive a score, they must pay money.
Also, they must remember that the score which they pay
for is not the same score that a mortgage lender gets when
that lender pulls their credit.
3. www.myfico.com
a. This is the website of the Fair Isaac Corporation which
invented the credit scoring model and whose model is used
by the mortgage lending industry.
90% of top lenders use FICO Scores. Get credit scores, credit reports, credit monitoring & identity theft monitoring in one place. Whether you're applying for a mortgage, auto loan or new credit, myFICO gives you access to the score you need to apply with confidence.
