There are many benefits to cleaning up damaged credit scores, even if you already own a home. By improving your credit score, you could save money on items such as car insurance, automobile loans, or any other type of loan. This is especially true when it comes to refinancing a home loan, because higher credit scores will always work in your favor. The goal is to secure the best interest rate available and save money. It's that simple.

If you've ever had credit issues in the past but still managed to qualify for a home loan, it's likely that you took on a loan with a higher interest rate because of your low credit scores. But if you feel as though you're stuck in a "sub-prime" loan, you shouldn't give up the battle.

Here are some basic rules you can follow to evaluate credit scores and initiate the cleanup process.

Step 1: Order Your Credit Reports & Scores.  The first step is to obtain a complete picture of your current credit situation by ordering your credit report and score for all three national credit bureaus, TransUnion, Equifax, and Experian. You should get your score from all three bureaus for two reasons.

• First, each bureau may have slightly different information about you depending on which companies have reported to them about your accounts.
  
• Second reason is many lenders, especially mortgage lenders, look at all three of your FICO scores to determine whether to grant credit–for everything from a car loan to a home loan to a credit card to a cell phone. 

• Do not have a creditor pull your reports because you will lose points for what is known as a "hard" inquiry.  

• Under the law, you are entitled to receive a free copy of your credit report from all three credit bureaus each year when you order it from Annual Credit Report Request Service. Note: You will have to pay an additional fee for the credit score from each bureau but your report is free.

Step 2: Verify the data being reported. - It is the consumer's responsibility to verify that the data being reported is accurate. Some examples of what to look for would be:

• Misspelled Names Wrong Addresses
• Incorrect Social Security Information
• Confirm that you recognize all the creditors being reported.
• Make sure that negative items actually belong to you.
• Look for signs of identity theft.
• Check for unauthorized hard inquiries.
• Make sure all credit card limits and balances are reported accurately.
• Check the statute of limitations in your state.
• If you have a positive account that is not being reported to all bureaus, call them up and ask them to report it.

Step 3: Dispute inaccurately reported information immediately.

• Errors on your report could be due to human error in data entry, or they could be the result of inaccurate information being reported from a creditor. There could even be unauthorized accounts set up in your name by an identity thief. If you find errors, you should correct them immediately by contacting your creditors or sending letters of dispute to the credit bureaus. By law, the credit bureaus have 30 days to investigate your claim and make any appropriate updates.
  
• Remember to only send letters to the bureau(s) that are reporting the inaccurate information. If you send letters to one of the three bureaus that is NOT reporting the inaccurate information, you run the risk of having the derogatory information added to that bureau report. Be sure to include proof of current address, proof of social security number, and send all correspondence via certified mail.
• The most common mistake is that consumers dispute everything on their report just because they disagree with it.  If you do so you may make your credit much worse because if you make an error and make reports to the wrong bureau it will only spread the bad credit.  Also if you have something like a late payment that has been verified multiple times by the bureaus and you continually dispute it that will not remove the item.  Instead the item will be tagged by the bureau as "Disputed by consumer".  When you apply for a mortgage you may be declined by having too many disputes on your credit report and you will be asked to apply at a later date when the disputes are resolved and your loan will be denied.
  

Step 4: Start improving what you can as soon as possible.

• Late payments and delinquent accounts will affect your score negatively, so take care of them. The sooner you do this, the better.  If you have a good relationship with your creditor, call them to see if they'll work with you on removing a late payment. They do this all the time.  If you have a late payment in the past year you may be denied a loan until one year has passed.
  
• If you have past due accounts, call your creditors to see if you can negotiate a better interest rate, lower payments, or make other arrangements to pay off your debt sooner. Also, when possible, don't carry high balances on your credit cards.
• If you carry more than 30% of your limit every month, this reflects negatively in your score.
• Don't charge what you can't pay off within 90 days, and don't max out your cards.
• If the credit challenges are too much
• If you feel that the credit challenges you are facing are too much, or if you don't have the time or stamina to do the homework necessary to get the ball rolling, then it's time to consider using a professional service to help you reach your goals.  Our office employs a staff of Credit Repair professionals that will work with you to achieve your goals.  Contact our office today if you are needing professional credit restoration services

In Conclusion
Your credit score is very important to your financial well-being. It can either open doors for you or lock them shut for several years. Your mortgage professional and CRC are working together to help you learn more about both the importance of the score as well as repairing, improving, and maintaining your credit score.

We can be reached at (832) 519-0695 or by email at loans@GoToEquityMortgage.com