Credit Repair Blog 4: Prepare your credit report for a mortgage

When reading through my credit repair blogs, please keep in mind that if you have questions about your own situation that you are welcome to contact me. I'd be happy to take a look at your credit report and give you some one on one advice on how to improve your score and lendability.

I'm going to go a little out of order on topics and write about something that's been on my mind: How to prepare your credit report for a mortgage.

If buying or refinancing a home is in your near future (the next 12 mos.) you'll want to be sure your credit report is in top shape prior to making application with your loan officer.

First, read through my previous credit repair blogs titled Old vs. New Accounts; Installment vs. Revolving and Get to Know your Credit Report.

Consider all revolving accounts you have. Is each card at or below 20% of your available limit? If not, begin today paying down all the balances of your revolving accounts aka credit cards. For example, if you have a credit card with a $1000 limit you should reduce the balance below $200. Keep the balance at or below the 20% mark until your loan is complete. Do not underestimate this important step.

If you are not able to reduce your revolving accounts at least 60 days prior to making application, don't worry. If you have the funds now, pay the accounts now and my team will force a credit rescore in a matter of a few days using a process called "Rapid Rescore." You will need to pay down the balances and provide me with a letter from the creditor (or an updated statement) showing the new balance.

Do not under any circumstances open a new account. The inquiry will hurt you, albeit slightly, and any new accounts regardless of the balance will lower your credit score for the first couple months that it reports. If you need to open new accounts as part of your long term credit re-building plan, avoid doing this for the four or five months prior to making application.

As I mentioned earlier, remember you are not alone. I am here to help you with a plan that's unique for you if so needed. Just shoot me an email at shanem@legacyg.com or call me at 360-698-6471 anytime with questions.