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.
- Check for accuracy - (Personal info, Social Security Numbers, Date of Birth, Full EXACT Name, Address)
- Check for rating
- Check to make sure ALL your credit accounts are being reported
- Check to see if late/missed payments are showing? If so, what is the true status of these accounts?
- 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 Lender, as 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 ...
* 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: