Even before you start to look for your dream home, you are going to choose a lender and start the process of applying for a mortgage. There are several reasons that this should be your first step. Finding out what your lender will qualify you for - and comparing that with your comfort zone of mortgage payments - is always a good reality check. You probably aren't exactly sure what price range you should be targetting for your dream home so this will help you simplify your home search. The second reason is equally important. If your lender pulls your credit early in the process, it gives you time to improve your score in a purposeful system.
Once you know your credit score, your lender may have some suggestions such as paying off a particular card. Furthermore, if your credit score is low, it could be due to errors on your report. This is very common, and it can significantly lower your score and make it difficult or impossible to be approved for a credit card, car loan or mortgage. With sufficient lead time, you can dispute those errors and get your score up into a range sufficient to qualify for that dream home.
If your credit report contains inaccurate information, take the necessary steps to dispute it and have the mistakes corrected. A credit repair company may be helpful in some cases - if you pick a reputable one, but it might not be necessary. You may be able to do this on your own.
What a Credit Repair Company Can and Can’t Do
A credit repair company can help you dispute inaccurate information. You can do that on your own as well, but if your report contains multiple errors, or if you have been a victim of identity theft and criminals have opened several fraudulent accounts in your name, it might be too complicated and time-consuming to dispute all of the errors yourself. A credit repair company can write to the credit bureaus on your behalf to dispute the errors and provide the documentation that is needed to correct them.
In most cases, a credit bureau is required to investigate a dispute within 30 days of receiving the information. That can help you correct mistakes and repair your credit score quickly so you don’t have to put your financial goals on hold.
A credit repair company cannot remove negative information from your credit report if the information is accurate. Bankruptcies, liens and accounts in collection will stay on your credit report for several years, and there is nothing you or a credit repair company can do about it.
How to Find a Reputable Company
There are many legitimate credit repair companies that follow the law and respect consumers’ rights, but there are also a good number of scams. If a company promises to raise your credit score by a specific number of points, don’t believe it. If a company tells you to dispute correct information, don’t do it. It’s also illegal for a credit repair company to charge you before they complete any work on your behalf.
A reputable company should explain your rights and be clear about what they can and can’t do to help you. They should listen to why you want to dispute information and request documentation to support your position. They should not promise you instant results.
Your Lender Can Help You Clear Up Inaccuracies on Your Credit Score
If you are applying for a mortgage, your lender will pull your credit report and can review that with you. A helpful lender will give you suggestions about the steps you should take to dispute inaccuracies on your credit report. A good lender will be a great asset in your home buying process. Since it can take some time to clear up inaccuracies on your report, it is a good idea to start working with a lender well ahead of actually making an offer on your dream home. Most lenders can do everything that a credit repair company can do for you and it will not cost you anything, plus they should be reliable and reputable.
If your lender will not or cannot help you clear up inaccuracies on your credit report and give you advice on how to improve your score by taking other steps, then you probably are working with the wrong lender.
If you are thinking of buying a home in the DC metro or a home in Bethesda MD, feel free to give the Lise Howe Group a call at 240-401-5577 for some suggestions of great - and helpful - lenders who can guide you through the home buying process.