There are many reasons why someone has low credit scores. Many times, it is because a person lacks discipline or structure in their life. Because of this, they do not pay their bills on time or curb their spending. Other people have challenges come into their life whether it is a loss of a job, medical problems, divorce or just situations that totally catch them by surprise. ( I had a client who was told her by insurance company that they would pay for her surgery and after she had the surgery they refused to pay, leaving her more than $30,000.00 in debt!!) I have been helping people with credit challenges to get on track and guide them to higher credit scores for 14 years.
Let me show you some examples that can help to improve less-than-desirable credit scores fairly quickly:
I had a client who wanted to buy their first home. Unfortunately, their credit scores were about 40 points lower than we needed to get a loan approval. The cause of their lower credit scores was 4 credit card accounts that were almost at their credit limit. They had never been late and the accounts were open for a while. I told my client to call the credit card companies and ask them to RAISE their credit limits. My client did and the on the phone 3 out of 4 said sure! The fourth company wanted a letter so my client sent them a request in the mail and the company raised the credit limit. Only 60 days later, my client's credit scores were over 80 points higher and they were more than able to buy a home!
If they had one credit card that was at or above the credit limit, ant the other cards had zero balances, we could have moved the debt over to the other cards and their credit scores would have increased.
These are just some of the examples of what people can do to improve their credit scores. I have many other methods that I have used to help clients improve their credit scores so they can buy a home or just get better interest rates on everything! Let me know if you have any questions.
Stay tuned for Credit Scoring, Part IV: Getting Ready to Buy a Home
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