Too many times I encounter buyers that have that disturbing experience of getting denied a loan due to a low credit score or poor credit report, and they take on the frame of mind that it is the end of the road. The truth is that is only means 'Delay of Game' not 'End of Game' as long as you remain determined to achieve your
goal of becoming a homeowner.
To avoid surprises, it is always a good early step for anyone considering making a major purchase to become a student of their own credit report. The way to obtain this information for free once per year is to go to www.annualcreditreport.com. This is a free website that feeds the information from all three credit bureaus: Experian, Equifax and Transunion.
When you get your credit re
port there, it will not give you your credit score with that bureau. For these you have to pay extra. However, you will not really need it if you are just attempting to clean up errors, negative items, etc. It is important to realize that this is just a report, and it does not mean it is 100% factual or permanent. You have the right as a consumer to dispute anything on your credit report, especially negative items.
The negative items will usually be in a separate section on each report, and they give you the option right online to enter a dispute. You can also write a letter to each of the three credit bureaus, and dispute items that way as well.
When a negative item appears on your credit report, I usually suggest that people challenge it. The reason for this is that it has been my experience that many times items will get removed by the reporting creditor due to slow response times, lack of records or that company no longer exists. There have been so many mergers in recent years with a lot of these corporations th
at there is always a chance the records for your old account no longer exists or has been lost.
Old collections can also be negotiated and paid off, often for much, much less t
han is being reported that is owed. In many cases the original creditor wrote off the debt or sold it to a collection company for pennies on the dollar, so one can often settle old debts for a lot less.
In Michigan the statute of limitations on old debt is 6 years, so if you are trying to remove an item, first check and see how old it is. If it is older than 6 years, and it is still on your credit report, then write a dispute letter requesting the item be removed due to the statute of limitations. So old debt does not have to drop on you from out of the sky, and ruin your day.
The standard for old collections on the credit bureau is typically 7 years on collections, so this is one way to get it removed a year earlier. If you want to see a complete list of statutes of limitations by all U.S. States, click on this link of one of my earlier blog posts on this: Statutes of Limitations by States.
There are also several books on the subject of repairing your credit on your own. They take you step by step through the process, and you can find these on my website in my recommended book section here at: www.michaeldelaware.com in my 'Resources' section in the right hand column. Or to make it simple, you can just click on this link here called 'Books on Credit Repair'. There are many books on the subject, but these are ones I have either read or researched and have some familiarity with.
You can also see my other blog posts on this subject:
The Statutes of Limitations on Old Debt by State
Establishing and Following Good Credit Behavior
Information on Credit and Credit Repair
Have You Ever Wondered: What is a FICO Score?
Pulling Your Own Credit Report 3 Times a Year for Free
Solutions for Getting Debt Under Control
You can also take a look at my Youtube channel and watch some of the videos I have created on the subject of credit repair. Here is the the third segment on my series on buying your first home:
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