A lot of people who aspire to own their own home will let the fear of their credit score stop them from ever exploring what their actual score is and how to improve it. This is definitely the #1 reason to start the ball rolling…
As you night have guessed the odds are already stacked in your favor. Yep you guessed it, over 130 ways that your credit can be weakened as opposed to only 5 ways that your score can be improved.
Number one: Get a copy of your credit report, either from your local lender who you have started an application with or an online website. If you go online, to get the actual real report you will have to pay for it. Usually around 20 to 35 dollars. Once you have this then contact the creditors with balances due that you are delinquent and offer them 30 – 40% to settle the debt. Most will if they are convinced that they wont ever be able to recover any more. They would rather cut their losses than anything else. So when you settle and make your final payment, make sure to have them issue you a signed letter stating that you have satisfied the debt. Then you have this to send to the credit bureaus to update your credit record.
A lender will look at the above mentioned method in favor of using a debt counseling firm. The ability to solve your own credit issues without anybody having to help displays you as creditworthy. This speaks volumes to a lender and is normally the biggest factor that puts you “over the fence” in tough decision by the lender. The other issue to avoid is bankruptcy. This stays on your credit record for a period of 5 to 10 years. So you don’t want to wait that long.
So one effective method to redeem your credit status is to go get a secured credit card. Simply just put a deposit down with the bank that you are applying to for the card and the amount that you have in the account is the limit that is on your card. There is no risk to the bank and you get to build credit again.
We always encourage that you let your Realtor refer you to a local lender. They know the local banks that have the ability to get borrowers financed even without “perfect” credit.
So once the process of repairing your credit has began, it is crucial that you make your payments on time. Lenders who have extended a 2nd chance to somebody who has had credit issues in the past will not be so patient with you the second time around. You have now taken control of your finances…DON’T LOSE IT AGAIN! Make sure that you prove to be able to take charge of your credit future.
So when you have demonstrated a pristine record with no payments being late for a year or two. Then you might be able to refinance at rate better than the one you have now. It normally will depend on how much your credit score has improved.
To view more informationon Fairbanks Realty? Stop by Ray Brasier’s Site at FairbanksRealtors.com and watch video interviews on Fairbanks Realty
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