In this current lending environment that banks are looking for ways to turn down borrowers, having a good credit score will give you a greater chance of buying your dream home. Lenders typically prefer Fico scores of at least 700, having a low score can hinder your loan application. Asides approval, bad credit can affect the terms you get for the mortgage. You may be charged higher interest rates or required to make higher cash down payments.
With that in mind, it is imperative to take vital steps to check your credit report and clean it up before applying for a mortgage, especially if you are a first time home buyer. It is important to note, however, that there are no quick fixes for a bad credit score, building a high score takes time. Here are a few steps you can take to boost your score.
Obtain and Review your Credit Report
To improve on your credit score, you have first to understand the factors hurting it. Get copies of your credit report from all three credit bureaus. The credit report would contain information on why your credit score is so low. It is essential to get the report from all three agencies as they may differ from one another. Most creditors don’t send their reports to all three bureaus, so your score from each may not be identical. You are entitled to a free copy of your credit report from all three bureaus. After obtaining the report, carefully check every single item on it. Ensure your details are accurate. Check the various transactions line by line. Check your delinquencies to ensure all items are correct. Highlight any item that is wrongly entered or any inaccuracy you find.
Gather Evidence and Make your Dispute
It’s not unusual for you to find errors and inaccurate entries on your credit report. The good news is that you can file a dispute to get the credit bureaus to remove such entries from your account.
You can file dispute online, by mail or phone. It’s however advisable to send your dispute via email so that you will have proof of your filing. Include your name and address while filing the dispute.
Your credit score is determined by five aspects of your credit history. While payment history takes 35%, outstanding debts take 30%, length of credit history takes 15%, the amount of new cards and type of cards you have used takes 10% each. So every item you remove from your report can boost your Fico score. You should, however, dispute only inaccurate information on your account. Disputing everything on the account may do more harm than good.
For you to boost your credit score to qualify for a loan to buy your desired property as a first time home buyer, you need to pay everything on time consistently. Delinquencies make up 35% of your overall score hence, its essential to avoid been late for any payment that reports to the credit bureaus. Try to pay up your past balances if you have several delinquencies.
Sign up with a Credit Repair Agency Disputing a bad credit report can be very tricky, and most times the only way to get your score high enough is to work with a renowned credit repair company. These agencies have the experience and expertise in financial and consumer laws, which puts them in a better positions to boost your credit score successfully. Credit Repair Solutions is a household name in the credit repair industry, we have helped several home buyers overturn their poor credit scores. We will identify disputable areas on your report and leverage on them to get your score high. Contact us today.