Steps to Re-Build Credit

By
Services for Real Estate Pros with Crye-Leike, Realtors

Steps to Rebuild Credit and Get Ready for a Home MortgageNegative records remain on an individual's credit report fo 7-10 years. With a little work credit can be improved before these negative records expire.

Here are 5 steps to get started in the right direction:

  1. Survey Past Damage - Obtain a credit report online from all 3 bureaus to know where you credit stands. Contrary to what you may think, checking your own credit data does not damage credit scores. You can request free copies of your credit reports once per year through www.annualcreditreport.com.
     
  2. Check Dates of Expiration - Expiration dates of negative credit differ by law, depending on the type of credit. Paying off collections or the discharge of bankruptcies will not remove these records. Look up the exact dates to see when they are set to expire and check the dates on the credit report for accuracy.
     
  3. Dispute Any Errors - If inaccurate records that should have expired or fraudulent accounts are found, you have the right to dispute these errors. Send a letter to all three bureaus requesting a correction. Once received, each credit bureau has 30 days to investigate and determine whether or not to make the change requested.
     
  4. Begin Adding Positive Information - Open up a new credit card and use it responsibly to improve scores. Many banks have credit cards designed to help rebuild credit. Keep balances low (less than half the allowed limit) and always pay on time. Sign up for the online banking service option to keep a close watch on the new account.
     
  5. Monitor Progress - Look into a credit monitoring program that offers unlimited access to accounts and credit scores. Pick a program that offers alerts to help monitor identity theft and credit scores.

Information included as a Tip of the Week from 1st Trust Bank, a family of affiliated services with Crye-Leike, Realtors. 

Are you looking for more information to help you get ready financially to buy a house?

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Rainer
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Jacob Morales - Arizona Mortgage Planner
US Bank - Scottsdale, AZ
This is a great post Angie! I really appreciate when people take the time to let our community know what is important in fixing their credit and improving their situation. Thanks again.
Apr 23, 2007 04:39 AM #1
Anonymous
Larry "The Realtor Guy"
Angie, this is more of a personal question concerning myself. I have a high credit score yet and still I am being denied credit due to paid collections. My question I have do you know any retail stores, etc that gives store credit cards without much hassle. Thank you
Oct 11, 2007 04:13 AM #2
Rainer
3,674
Russ Higgins
Credit Justice Services - Memphis, TN
Credit Justice Services

Good information, Angie.  Adding a credit card - secured or unsecured will improve your score to the tune of about 40 points if you don't already have one.  Limits should ALWAYS be kept below 40% of credit limit.  As far as monitoring, believe it or not, freecreditreport.com does a pretty good job with this.  Their credit reports are a joke, but the monitoring isn't bad. 

Larry, try a local Mom 'n Pop appliance or stereo store that offers credit.  They are more likely to extend credit to someone on the verge of making a purchase. 

Oct 12, 2007 01:31 AM #3
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Rainer
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Angie Vandenbergh

A Crye-Leike Blogger
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