Beware of Credit Repair Services
The Issue With Credit Repair Companies
Most credit companies charge a fee and their “repair” methods don’t usually fix credit for mortgage qualification purposes. Often they just dispute collections or charge offs. They may be able to remove these negative items on ONE of the credit bureaus, however if they can’t remove it from all three bureaus it will still show up on a tri-merged credit report. In addition, some disputes are required to be removed for certain mortgage types. If a late payment, collection, or charge off truly was fraudulent or an error then working with a credit repair agency may be effective. If there is no argument on why the credit incident isn’t correctly reporting on your credit report, there is little that can be done.
Your Credit May Work As Is
Talk to a lender who can give you advice on your credit. Lenders are not looking to charge fees to fix your credit, they want you to be able to secure financing. A 580 FICO+ is eligible for FHA loans, and some programs may even accept lower scores. Sometimes it is better to leave your collections and charge-offs alone, letting them drop off and impact you less over time. Conventional loans do not require you to pay off collections owed in order to buy a new home.
Actual Credit Repair
Keep Credit Card Balances Low - If your balance is always below 50% of the available limit (30% is even better) this will can quickly bring your credit score up.
No New Lates - Put everything on auto-pay, but still check that payments are being made as if you were paying manually.
Don’t Open or Close Lines Of Credit - Keep your old cards open (at $0 balance) and don’t open new cards.
