Can you believe we were able to get a client's FICO score raised over 100 points in less than 30 days? This is a truly amazing feat seeing how the client's middle credit score was 571 just 20 days ago and had a previous foreclosure. Now it's 676 and this person went from being a prospect to a buyer that quickly.
How were we able to raise a person's FICO score over 100 points in less than 30 days? All it took was some ingenuity, creativity and some hard work. But it paid off in the end. The borrower is able to buy the house he wants, the agent made a sale and we were able to close a loan.
When reviewing a borrower's credit it's critical that we as loan counselors don't solely look at the FICO score and make a snap judgment as to approve or deny credit. Yes the FICO score is critical to approving a home loan but the entire credit file needs to be reviewed to ensure that the client is getting the maximum score for the items on the credit report.
If it is determined that the client's credit file is not fully utilized then we look at ways to maximize the credit score based on items on the report. Here are some examples of tactics we use to help people raise their credit score.
- Pay down credit cards to below 25% balance to limit ratio.
- Pay off or settle Charge Off accounts if within the borrower's means.
- Move balances of credit cards to other cards to reduce the balance to limit ratio.
- Open a secured credit card to add good credit to the person's file.
- Have the borrower put on a friend or relative's credit card as an authorized user.
- Dispute old or incorrect items that shouldn't be on the file to begin with.
You'll notice that none of these involving harassing the bureaus to remove items that truly belong on the report. Our goal is not paint an incorrect picture of the person's credit file but to use the existing system to benefit the client's ability borrow funds and purchase a home.
In the example given above, the cost to the get the person's credit repaired and raised was under $150.00 The only reason it was that much is that a rapid credit re-score was required to get the score increased quickly to ensure a timely close of escrow. This transaction was brought to us as a decline from another mortgage company that didn't know what to do with it.
Most of the time we do the credit repair ourselves at little or no cost the borrower. We'll get paid when the transaction closes and isn't that how it should be? We don't normally need to utilize the services of a credit repair company unless there is a need to dispute items directly to the bureaus. But we are finding that those instances are the exception rather than the rule.
Please call Joe Reed with Amerfirst Financial today to find out how he can help your client's improve their score and purchase a home. 480-236-3869.