Quick Fix Credit Repair = A Myth

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
http://actvra.in/54zK

 

Quick Fix Credit Repair = A Myth

 

While preparing for this article, I ran a simple Google search using the term "quick fix credit repair".  

The result was remarkable.  Over 558,000 articles and references popped up in just seconds.

You'd think with all the tips, info, and guidance available at the snap of our fingers, that improving credit and credit scores would be fast and easy, wouldn't you?  But no. As usual, there's more to the story ... 

While it's true that options exist for those in need of fast credit score improvement for mortgage purposes via rapid rescoring (improvement of even a few points can have a huge impact on the terms offered during mortgage application), raising credit scores substantially typically takes time.  

There is no "quick fix".

Now I know that fact can seem a bit disheartening, especially if you are someone presently in need of credit repair.  But I offer good news to counterbalance it and it provides real hope and a clear path to credit improvement. 

Simple measures to improve credit scores exist ...

 

And when these simple measures are performed methodically and consistently, (with time) they'll reap you positive results.

So what are these simple measures you can take to raise your credit scores and improve your chances for better financing options?  

Here are some easily accomplished suggestions:

  • Check your Credit Report right away ... and then check it regularly in the future.  
  1. Check for accuracy - (Personal info, Social Security Numbers, Date of Birth, Full EXACT Name, Address)
  2. Check for rating  
  3. Check to make sure ALL your credit accounts are being reported
  4. Check to see if late/missed payments are showing? If so, what is the true status of these accounts?
  5. More ... 

 

  • Pay your bills!  Pay them on time, as they are due, each and every time
  • Do NOT close unused credit card accounts.  (Store unused credit cards in a safe secure lockbox)
  • Be aware and mindful of your Utilization of Revolving Credit.
  • Keep the utilization of credit on Credit Cards low.  30% or lower of available credit is recommended - 10% is even better, if possible.
  • Pay fines, parking tickets, etc.  Even seemingly small unpaid debts can be sent to a collection agency and end up wreaking havoc on your credit/Credit Scores
  • Stop applying for new credit/credit cards! (See my post on this topic)
  • Create a budget and plan for your credit improvement. Stick to it. 

 

 

For those that like to pay cash, be aware:  Having no-or-little credit history reporting to the Credit Bureaus reaps low Credit Scores or No scores at all.  

As contrary to common sense as it may seem, this method of payment actually works against you should you hope to buy a home.  In today's mortgage financing world, you must have credit (with viable usable approvable Credit Scores) and a credit history to obtain a home loan.  

Why?  Mortgage Lenders and their Underwriters are seeking clues as to how you handle your finances and available credit.  Your Credit Score(s) and credit history provide them the info and clues they need to make their decision regarding lending money to you.

So, what should you do if you've been paying cash, have no credit card(s), or have a short credit history?  (College students, new graduates, and Millennials should pay special attention here) ...

 

Consider taking these steps:

  • Open up a credit card (known as revolving debt) with a modest borrowing limit. Major retailers and gasoline companies are two (2) good examples of this type of debt. (Make sure prior to taking out new credit or initiating a new credit card, that the company utilized reports to the Credit Bureaus)

 

  • Use the newly-established credit card by charging purchases within your budget constraints.  Pay the balance on time and in full each month.

 

    * I recommend that first-time credit users open only one or two credit lines, to begin with. Take small steps. Learn to handle your credit wisely. Crawl before you walk. 

 

  • Consider using a co-signer to establish a credit account. Lenders consider the co-signer's credit as existing credit.  

 

 (Note: Co-signing is not without risk, so consider this action carefully prior to doing it. 
  Also:  Make sure the co-signer involved has a long good credit history)

  • In cases where Bankruptcy or Foreclosure has occurred or where other credit issues have taken place:  Try opening a "secured" account with a credit union or credit card company. (A "secured" account" is one where a deposit of cash ($250, $500, $1,000) is made with the credit company, as collateral for a credit card)

 

Remember:  Should you be hoping to buy a home in Chicagoland/IL soon or in the future ... it's best to talk to me, your Mortgage Lenderas early in the process as possible.  

The information and assistance I'll provide you will prove extremely beneficial at the time of purchase/mortgage application and quite possibly save you money. 

Hopefully, the info I offer above proves helpful and answers many of your credit and credit scoring questions.  Should you still have questions though, never hesitate to reach out to me to ask them.  I'll be happy to hear from you, help, and assist you moving forward ...

Any Questions? Let's Talk!* In need of financing and credit answers? Looking to see what home buying or refinancing options exist for you in New Lenox, Will County, or elsewhere in the Chicagoland area?  Contact me!  I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

 

Gene Mundt
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed

 

American Portfolio Mortgage Corp.
nmls #175656
 
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
 

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Stavrula "Sam" Crafa, RNC,GRI, CDPE, PSA 05/16/2017 07:03 PM
  2. Tony and Suzanne Marriott, Associate Brokers 05/17/2017 06:19 AM
  3. Roy Kelley 07/04/2017 01:00 AM
  4. Lyn Sims 05/18/2017 12:48 PM
Topic:
Lending / Financial
Location:
Illinois Will County New Lenox
Groups:
Home & Credit Savvy
1st Time Buyers
The Single Home Buyer and Seller
Bananatude
Bartender, Make it a Double
Tags:
rapid rescoring
credit repair myths
credit repair and improvement
credit score optimization
establishing good credit
quick fix credit repair

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Rainer
99,814
Mega Team Real Estate
Realty ONE Group Alliance - San Mateo, CA
San Francisco and Peninsula Real Estate Concierge

Thank you for sharing such great information and great suggestions in order to fix credit rating.

May 17, 2017 10:49 AM #34
Rainmaker
282,484
John Wiley
Jones & Co. Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

Get Rich Quick and Quick Credit Repair are great enticements but do not lead to what is promised.

Great tips that will get the job done.

May 17, 2017 10:56 AM #35
Rainer
5,568
Jeanette Acevedo
Wagner Credit Repair - Brandon, FL
Get the credit you deserve!

OMG!  I had to get on here and comment on this!  I have been providing credit education and repair since 2009 and there is no magic fix, no fairy dust, no instant results.

Now, when a consumer makes the right moves and removes inaccurate or outdated information on their credit reports the scores can climb rather quickly.  I have seen this happen.  However consumers that don't even understand the why, underwriting guidelines or what it all means have the most to gain from learning.  They can spend time on google like you did and get both fact and fiction.  Or they can meet someone who can accurately educate them.  Education is key.  I am a credit nerd...I can't help it.  

Let me add a bit to your post:

One late payment can drop a consumers score as much as 65 points so yes, pay those bills on time.

You can carry approximately 10% - 30% on your revolving debt.  Depending on your overall debt load 10% might be the sweet spot for you to drive your score up.  For someone else 30% might be sweet.  Play with the balance and compare how it affects your score.

Length of credit history is important.  Don't close accounts and be prepared for when you pay off your car note that your score may drop by as much as 30 points.

Finally, there will be a difference in the score a lender sees and the score a consumer sees.  The consumer will see a higher score - anywhere from 30-40 points than what the lender sees.  This is due to risk of loss.  So consumers should try to build their scores upwards of 30-40 points than what their lender needs.

Oh, there is so much more....but I had to get that out, lol.

Finally, if you are in Gene Mundt's area call him for financing!

May 17, 2017 02:01 PM #36
Rainmaker
128,849
Peter Lavelle REALTOR®, GRI SRES, ABR
Home Solutions Realty Group, LLC - Philadelphia, PA
SOLD@100%Market Value,or I Pay You the Difference

Great read. How things certainly have changed...and also another eye opener for me.

May 17, 2017 04:37 PM #37
Rainmaker
260,362
Dan Derito
Success! Real Estate - Brockton, MA

Thanks for sharing your expertise on credit repair Gene.  It takes a while, and some bad credit behavior to get into a mess.  It will take a while to get it going the other way.  No one mentioned the elephant in the room---student loan debt.

May 17, 2017 04:57 PM #38
Rainer
3,140
LaMont Andrews 480.821.9108
www.CreditDisputePros.com - Chandler, AZ
We help you close a LOT more deals every year...

Dan, how do you eat an elephant sir? One bite at a time!!! While student loan debt is and continues to be a major issue especially with millenials today. My experience has been to show it as under control and well managed. I suggest to our clients that the first thing they need to do is an income based consolidation to get all of it consolidated with the smallest possible payment and to insure they are on the correct "forgiveness path," 10 year or 25 year. Additionally, the new lender has the option of removing any and all previous derogatory reporting after six months of on time payments.  Typically the new consolidated/reduced lower payment will help lower their DTI... If you need any additional information or referrals, let me know sir...

May 17, 2017 07:20 PM #39
Ambassador
2,596,953
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

so funny, my score is good and I monitor it several ways regularly, but you did remind my I laid a medical bill aside last week and I need to mail a check tomorrow

May 17, 2017 07:21 PM #40
Rainmaker
4,234,233
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Congratulations on your feature recognition. This is excellent advice to share.

May 18, 2017 05:42 AM #41
Rainmaker
1,288,845
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Area Real Estate

Great info & it's not as easy as just clicking on credit repair in Google. I don't think that people realize how much it actually costs them extra.

May 18, 2017 12:45 PM #42
Rainer
3,140
LaMont Andrews 480.821.9108
www.CreditDisputePros.com - Chandler, AZ
We help you close a LOT more deals every year...

Very true Lyn, it's very sad that they don't teach credit as part of finance in schools so 90% of the populace come out into the real world without a clue about credit nor the impact it will have on their lives in the future...

May 18, 2017 01:20 PM #43
Rainer
418,894
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

So, Jeanette Acevedo, #36, stated that lenders undercut the consumer's credit score by up to 40 points, so, if a lender posts a credit score of 680 to qualify for a certain rate and the consumer score is 680 from the credit bureaus, will the rate be increased? If not, why is that information important to consumers? If so, wouldn't that be a HUD violation and possible litigation by consumers? 

May 19, 2017 12:53 AM #44
Rainmaker
2,543,464
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce - Short Sale

TEN Stars Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ....quick fixes rarely "fix" anything !

May 19, 2017 03:10 AM #45
Rainmaker
836,809
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent information as usual Gene!  It's so important for anyone looking to purchase a house, a car, or anything major to understand their credit and how to improve it.  Saving money with higher scores is highly underrated!  Great job!

May 19, 2017 03:53 PM #46
Rainmaker
3,201,156
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene

Your post is a must read for real estate professionals . . .  . Great information.

Good luck and success.

Lou Ludwig

May 19, 2017 07:31 PM #47
Rainmaker
3,201,156
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene

Congratulations on a gold star feature for an informative post.

Good luck and success.

Lou Ludwig

May 19, 2017 07:33 PM #48
Rainmaker
913,756
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

Gene, your advice is spot on.  Those with a bankruptcy looming or in the works should take heed and not fall for any quick fix credit repair.  It just won't happen. 

May 20, 2017 10:43 AM #49
Rainmaker
1,351,605
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Gene -  I monitor mine and it is always good but I want to get the one loan off that I co signed for my daughters education.

May 25, 2017 07:50 AM #50
Rainmaker
1,393,703
Sandy Padula and Norm Padula, JD, GRI NMLS#1483386
Realty One Group - Carlsbad, CA
Presence, Persistence & Perseverance

This is very sound advice you posted here and I hope all AR Members spend a few moments reading it. Thank you and Happy Independence Day!

Jul 04, 2017 05:47 AM #51
Rainmaker
434,391
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Many potential home buyers are 3 to 6 months away from repairing their credit and qualifying for a home. However, time isn't the only factor. They must follow the advice of Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi to accelerate their credit repair and to avoid making simple mistakes that can cause big credit score setbacks.

Aug 05, 2017 03:15 PM #52
Rainmaker
1,196,135
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

Many times people just forget that they missed the payment, or closed a card, or were late with a payment....credit history reflects all of that for too many years. 

Aug 23, 2017 02:31 PM #53
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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