Overcoming Credit Issues? What is my credit score?

Okay, Lets talk about the poll I had up some time ago. Read previous post 12/2 Poll What is stopping you from buying a home.

Part One: Credit Issues

When was the last time you ran your credit?
Did you know that you are entitled to a free credit report for all 3 of the credit reporting companies once every 12 months. There might be some false items on your credit report that prevent you from having a good credit score or there might be fraudulent activity on your account that you don't know about because you haven't reviewed your report in a while.

You can request your free annual credit report by clicking here, which I want to add I have no affiliation to. You can also request your free annual credit by phone and it will be mailed to you from the credit reporting companies within 15 days. This report will not give you your credit score but it will give you an overview of what you need to pay. You should review the report before attempting to purchase a home to know what items need repairing.

If there are any items that were in collections and you paid it but it shows as open with a balance...YOU HAVE THE RIGHT TO DISPUTE YOU with the credit reporting company. Visit one of the three credit reporting companies; experian, transunion, or equifax to dispute the account. When you dispute it, the credit reporting companies will verify with the company and if it was indeed paid they will remove it off of your credit report, resulting in a better score.

To view your rights on credit reporting under the Fair Credit Reporting Act (FCRA) visit Federal Trade Commission website.

There are many companies to claim they can fix up your credit for a fee BE VERY CAUTIOUS. Most of the repair you can do yourself, if you have the proof that you did pay the account.

If and when you decide to buy a house and have negative items on your credit report the mortgage broker will tell you what you have to pay in order to get the mortgage. Mostly any medical collections you will have to pay in full and any judgements on your credit report. MAKE SURE YOU PAY WITH PERSONAL CHECK OR MONEY ORDER TO PROVIDE MORTGAGE BROKER WITH PROOF OF PAYMENT. (I have to stress that because I had an issue with a buyer who paid her medical collections with her credit card after I gave her specific instructions to pay by check and it became an issue because she settled less than the amounts on her report.) Some collection companies will send you a "Paid Off" letter but you NEED to request it.

Each mortgage broker is different and have different guidelines and will provide you with the guidance you need to help you fix your credit to obtain the mortgage. After you have paid whatever items necessary to satisfy mortgage brokers requirements they might order what is called as a "rapid rescore". Usually in order to have the items showed as paid on your credit report it will take months or even years. Rapid rescore is a way of improving your credit score quickly, by correcting items and then having your credit score "rapidly" corrected in a few days. There is a fee for that service from the credit reporting companies which most brokers would have the client pay upfront.

I can't stress enough how important it is to know what your credit score is and what you need to do to fix it. It will save you time and energy getting the legwork done before looking to buy your new home.

If you have any questions, please feel free to contact me!

Good Luck!