Credit Repair and its Importance.

Credit Repair has always been out there. During the Mortgage Boom its importance was decreased because there were so many programs that allowed people with past credit problems to get into homes. Since all of these programs went bye bye, it is starting to creep back into the picture. On top of this the programs that remain are continuing to evolve. Recently a new wave of changes came down the pipe and 620 is the new standard minimum score. With this we are now taking apps every single day the fall just below this threshold. Just last month they could qualify, but no longer. With this being the case, all loan officers have to step up their game and their services. Let me state this first, we are NOT credit repair specialists. We just simply deal with credit on a daily basis to know how to help in certain instances. For those of you that fall just below the 620 minimum, there is hope. We can run a credit program that will evaluate your score and detail a plan to raise your score. We only do this if we feel there is a realistic chance of helping you get above the 620 mark. Many times we find there is nothing that can be done. However, there has been numerous times where it does work. We can sometimes find that a borrower needs to address a couple accounts, provide us proof of the action, and then we can submit this documentation to re-score your credit report. This process is fast and it works. This is just one more way we are here to help. For those situations that are more severe and messy I recommend you check around and find a good credit repair company to do the work for you. This can be expensive, but it is worth it since it is so tough to clean up messy credit reports. We do not have the time or resources to tackle such projects, but we can help on more minor issues and put you in a better position to purchase a home!

If you are one of the many people that need to rebuild your credit let me just mention a couple quick tips you can try. When your score is low it is very tough to walk into a bank and ask for a loan to help rebuild your credit. During these tough times they may just laugh at you. Don’t get discouraged. Take a proactive approach and propose something to them.

Tip #1:
Ask the bank if they will allow you to take $500 and purchase a CD at the bank and then take out a $500 loan against that CD using it as collateral. Set it up for 1 year at $50 a month or so. Take the $500 loan proceeds and put it in the bank and use this money to make the monthly payment. What this does is give you an active account on your credit and as you pay it establishes positive pay history for you Once you pay it off, do it again.

Tip #2:
Contact a credit card company and do something similar to #1. Ask them if you can open a secured credit card. Send them $500 and they will put it into a savings account and issue you a credit card with a $500 limit. If you default, they just keep the money like they would on the CD. Take this card and make a few minor purchases on it. Say $100 or so (i.e. gas or meals). When you get your first bill pay a portion of the balance and continue this method. Never borrow more than 50% of the credit limit and of course always pay on time. You can’t use it and pay it off in full each time you get the bill or it will not work. Remember you are looking to establish payment history and you have to carry a balance month to month to do this.

I know you probably have a negative view of credit cards or debt for that matter, but you have to do something to re-establish your score. If you have zero debt, it is great in real life but your credit score will just sit where it is until some sort of activity is on your report. If you have any further questions, please do not hesitate to contact us.

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Flat Branch Mortgage