Being in a business where credit is essential there are plenty of times when I have witness
Western New York homebuyer clients being denied the home of their dreams because of not so perfect credit. If you have credit that’s not so good what should you do about it?
Well isn’t that the million dollar question? Ever since I’ve been in the real estate business I've vowed to help ones who had lack of perfect credit and help them finally get the home of their dreams some day. With that being said I’ve done some research on how to restore your credit. Before I go any further let me say this! Don’t let anyone fool you into thinking you need to hire a professional to repair your credit. The truth is, there is nothing a credit repair company can do to improve your credit that you can’t do for yourself.
So, save yourself some money and the hassle of finding a reputable company and repair your credit yourself.
Its hard work to rebuild your credit rating, but it can be done. First you need to understand how credit works and then you need a plan.
What do the credit agencies say?
You need to know what the credit-reporting agencies are saying about you. For $8.50, you can order a copy of your credit report online from Equifax. You can also now get your credit score from Equifax and Fair, Isaac & Co. The credit score is a statistical tool designed to measure likelihood you’ll pay your bills.
You should consider ordering free reports from all three credit bureaus. You’re entitled to free credit reports from each of the three credit bureaus each year. You can also order your credit reports directly from the credit bureaus for a fee.
Why should you order all three credit reports? Some of your creditors and lenders might report only to one of the credit bureaus. And, since credit bureaus don’t typically share information, it’s possible to have different information on each of your reports. Ordering all three reports will give you a complete view of your credit history.
Make an extra copy of each report in case you need to dispute information.
What are the three credit bureaus?
Answer: The three credit bureaus are: Equifax, Experian, and TransUnion. The websites are
www.equifax.com, www.experian.com, and
www.transunion.com, respectively.
Once you receive your reports are sure to look over them very carefully for there may be wrong information
What you need to look for?
• Incorrect information, including accounts that aren’t yours, payments that have been incorrectly reported late, etc.
• Past due accounts that are late, charged off, or have been sent to collections.
• Maxed out accounts that are over the credit limit.
I’ve said this before but this grant repeating myself
Stay away from ‘repair’ clinics
what you don’t need is a credit-repair clinic. These so-called clinics offer to help you clean up your credit by using loopholes in the law that only they know about. They may also promise to remove negative information from your file or to get you a major credit card. These are false promises
Some repair clinics may even get you into legal trouble by encouraging you to distort the information in your credit file, or by helping you to initiate a new file with a new address and federal identification number.
There are no special tricks that these credit repair clinics know, experts say. You can clean up your credit report yourself.
Here are five steps to credit repair:
1. Lock your cards away.
Don't close your accounts yet. If your credit rating has been damaged, you may have trouble getting new cards. But stop using them. Your immediate goal is to repair your credit rating and to get out of debt.
2. Figure out where you stand.
No one likes to focus on budgets and net-worth statements. It's particularly painful if you suspect your income is less than your debt and that your net worth is in minus territory. Still, finding out the truth is a necessary first step, just like stepping on the scale before you begin to diet. It helps you measure your success.
You have a great deal of control over your budget and net worth. But much of your credit record is actually controlled by others -- your creditors and the reporting bureaus. Between 30% and 40% of these reports contain errors; I suggest clearing that up first.
I also suggest that you write to the credit bureau detailing the errors in your report and that you send your correspondence by certified mail with a return receipt requested as you work to clean up your credit report. That will provide you with a paper trail and help you remember when to follow up.
Be as succinct as possible. Don’t be angry or accusatory. Provide backup materials whenever you can. For instance, if you’ve paid off a bill and received a letter from the former creditor acknowledging that the debt is paid, send along a copy.
In your letter, identify problems such as:
"The credit file your company maintains on me states that my account at Macy's is overdue. In fact, I have closed my account at Macy's and paid off the balance. I am enclosing a letter from Macy's to support that."
Tell the bureau that you want to have the problem investigated as soon as possible. Ask to have a corrected report sent to anyone who has asked for the report during the past six months for credit purposes and during the past two years for employment purposes.
3. Devise a plan.
If you’re going to clear up your credit rating, you must begin paying your bills on time. That means you pay at least the minimum balance on each bill within 30 days. Determine whether you can do that.
4. Negotiate with creditors.
Nine out of 10 creditors will renegotiate terms with you if you’re having trouble paying bills. Good candidates are gasoline companies, utility companies, hospitals and doctors. Gasoline cards are usually not reported to credit bureaus until you’re 90 days late, and the others don't generally show up on credit reports unless the bills are sent to a collection agency. Write a letter to these creditors describing your problem and requesting a reduced payment schedule. Then stick to your new schedule.
5. Add pertinent information to your credit file.
Your credit report may be damaged as much by the information that is omitted as by the negative information that is found there. Creditors are not required to report information to a credit bureau. But you are entitled to add information that you feel will help your rating.
The law says you are allowed to write a letter of up to 100 words involving any credit dispute and that the agency must provide to any creditors who ask for information. That might include the details of loans that you paid on schedule, active accounts where you have a good record, salary increases at your job, and information about your mortgage, car loan or the settlements of disputed bills.
My last suggestion is that you write to the bureau, enclosing a copy of your credit report and the information that you would like added to the report. Also include information, such as account numbers, that will allow the credit bureau to verify it.
Negative information can be maintained on your report for seven years; bankruptcies for 10 years. But many creditors weigh new information more heavily.
“How much you pay is not as important as how often you pay It's important to establish a record of paying bills on time and to stick with it."
Also you may want to find out what your statutes of limitations are in your state. Question: Did you know in
New York State the statutes of limitations are 6 years?
In conclusion If your follow these credit rules you will be in your dream home before you know it.
Remember In real estate Every Home Needs A Key
Mark Key
RealtyUSA.com
716-603-8649
What To Do When Your Credit Isn’t The Best?
