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Repairing Damaged Credit To Buy Your Dream Home

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When life gets tough, it can be easy to fall behind on your debt payments. Unfortunately, as your debts stars to pile up, your credit may be damaged. Bad credit can affect almost every aspect of your life. You may find difficulty with opening a checking account, obtaining a credit card or car loan, buying a dream home and even finding gainful employment can be challenging.

Repairing Damaged Credit To Buy Your Dream Home

The most common causes of bad credit are unemployment and unpaid medical bills.

With damaged credit, it may become difficult to get back on track- as credit limits are lowered and interest rates are raised. 

Buying a home with bad credit can seem like a distant fantasy and an impossible dream. Many have people have walked this road and many more will walk this road in the future. Knowing how to navigate around this situation and knowing how to repair credit can be extremely beneficial.

Lease it. Love it? Buy it!

VantageScore vs. FICO Score

The VantageScore and FICO Score are the most common factors lenders use to evaluate credit. Credit scores can range anywhere from 300-850, with the a higher score meaning more credit worthiness.

Your payment history is significantly weighted in calculating a credit score. Both consistent and timely payments are critical in achieving and maintaining a good credit score.

Your credit utilization ratio- the amount of revolving credit you’re currently using, is also very important. A common guideline is not to utilize more than 30% of each credit line. You may find that having different lines of credit make it easier to keep your balances at or below 30% of the credit limit.

Credit utilization is calculated by dividing the balance by credit limit for each card and for all cards together.

Get a Free Credit Report

A good place to start is with getting a copy of your credit report. There are three nationwide credit reporting companies. These include:

  • Equifax
  • Experian
  • Transunion

You are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies.

You can contact these companies to request a copy by

  • Go online to Annual Credit Report (The only authorized website for free credit reports.)
  • Call 1-877-322-8228
  • Mail a request to: Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281

FYI- You will be required to provide your name, address, social security number, and date of birth to verify your identity.

Reviewing Your Credit Report

First- be wary of any impostor websites and be sure to type the web address exactly or use this link- Annual Credit Report.

Once you have a copy of your credit report, it is important to carefully review to properly interpret the data.

You will find five major categories on your credit report

  1. Personal information
  2. Open accounts (paid monthly)
  3. Accounts that have been reported as in default
  4. Public records
  5. Inquiries

Keep in mind that the credit reporting companies report information given to them by your creditors. This information is received when you fill you out any credit applications. (Hence the importance of always completing applications accurately and legibly.)

You may find different spellings of your name, address (both present and past), as well as employment.

Most items will be on your credit report for seven years, though items such as bankruptcies and tax liens can last up to ten.

After a careful review, verify that all of the data listed is accurate. Report inaccurate information by disputing inaccurate or incomplete information. Again, it is imperative that you report inaccurate and incomplete information on your credit report.

Many people do not realize the power of disputing items listed in your credit history. 

Most of your credit repair can be done by utilizing this with this simple practice. Know your rights. A great resource is the Fair Credit Reporting Act (FCRA). The FCRA and other great credit resources can be found- here.

Credit Repair Facts

Hiring a credit repair company can be tempting. Be wary! There are many scams that pretend to help but are in fact simply trying to steal your information. Considering simply saving the fee for this service.

Everything that credit report companies can do, you can also do.

If proper steps are taken, one can very easily repair your own credit in a fairly short amount of time, at little to no cost.

Keep in mind, delinquent accounts can be negotiated. Tax refunds are a great source to rid yourself of old debts.

Addressing delinquent accounts is paramount. Many people do not realize that one or two delinquent accounts can be the only thing holding them back from owning your own home.

Contact past creditors of delinquent accounts to see if they are willing to negotiate for a discount. For example- Many creditors with a delinquent balance of $600, may happily accept a total lump sum of $400 (or less), rather than waiting for years of payments to receive the full amount.

Understanding how credit works and cleaning up any errors on your credit report is half the battle to winning your financial freedom. After that, it is simply a matter of building up and maintaining your credit scores.

A Simple Credit Building Strategy

Start with one simple line of credit. Secured credit cards or low limit, high interest rate credit cards are a good place to start. Instead of using a debit card for your daily life purchases, such as gas and food, use this card.

The most important aspect of this technique is making sure you pay off the entire balance at the end of each month. This way you avoid paying any interest.

This will allow you to begin establishing credit and will increase your scores. As you establish a positive credit history and your credit scores increase, you will become eligible for lower rate credit cards with higher limits.

Don’t forget- keep your credit utilization rate for each card at or below 30%.

The key here is consistency in making your payments on time. Do not live beyond your means and do not be tempted to use your cards to buy frivolous items.

Repairing negative credit, building new credit, and consistently maintaining your credit balances will yield positive results. You will find better terms, higher credit line, and possibly better employment. In no time at all, you will easily be the proud owner of your very own home.

Giving you more homeownership options.

We believe that even if a household is not ready to buy a home, they should have a way to move into a home of their choice, with a path to own that home if they would like. The dream of owning a home can be a reality with our Lease Purchase aka Rent To Own Homesprogram. Learn more.

Rent To Own Homes Program

This article is about: How to fix credit myself, how to fix credit fast to buy a house, fast credit repair for mortgage, can a Realtor help me fox my credit, repairing damage credit to buy your dream home in DC, repairing damage credit to buy your dream home in Maryland


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Buyer Tips Buyers Credit creditscore

How Lenders View FICO Scores

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Let’s take a look at FICO scores and how they’re calculated.

Your FICO score is a numerical representation of the odds that a consumer will default 90 days or more or a credit card or loan.

It’s really that simple.

The lender wants to know what the odds are that you’ll stop paying for 3 months or more.

Here’s the breakdown:

800+1485 to 1
720 -799659 to 1
680 – 719112 to 1
620 – 67947 to 1
Below 62015 to 1

Using the chart above, this mean that for every 47 consumers with with a 625 score that a lender lends money, on average 1 will default in 90 days.

That means for the lender to make money, they have to charge more interest to those with lower scores to offset the losses of the 1 who defaulted.

How your scores are calculated are based on 5 criteria:

  • Payment history (35%) – Do you pay your accounts on time?
  • Amounts owed (30%) – How much of your credit are you using out of your available credit?
  • Length of credit history (15%) – How old are your accounts? Generally, older his better.
  • Credit mix in use (10%) – What’s your ratio of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.
  • New credit (10%) – Opening several credit accounts in a short period of time represents a greater risk – especially for people who don’t have a long credit history.

Wait! Before you go signing up for just any old credit monitoring service, here’s what you should know.

All credit scores are not the same.

Lenders currently use FICO scores. You can get your FICO scores from myfico.com.


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Instagram: Accepting Applicants for our Renters 2 Homeowners Program

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Instagram: Accepting Applicants from First Time Home Buyers and current renters for our Renters 2 Homeowners Program. 
Requirements:
-2 year employment history (not necessarily the same job).
-Bad or NO Credit is ok, we will repair your credit score.
-Down Payment Assistance Programs available.
-Ready to make small sacrifices to change your life.
-NOT a Rent To Own program… If you’re tired of throwing your money away each month paying someone else’s mortgage, DM me for more information.  #credit #networth #creditrepair #800club #washingtondc #dmv #aimhigher #reallyhers #financialfreedom #creditscore

Accepting Applicants from First Time Home Buyers and current renters for our Renters 2 Homeowners Program.
Requirements:
-2 year employment history (not necessarily the same job).
-Bad or NO Credit is ok, we will repair your credit score.
-Down Payment Assistance Programs available.
-Ready to make small sacrifices to change your life.
-NOT a Rent To Own program… If you’re tired of throwing your money away each month paying someone else’s mortgage, DM me for more information.

#credit #networth #creditrepair #800club #washingtondc #dmv #aimhigher #reallyhers #financialfreedom #creditscore

Photo taken: Washington, District of Columbia

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Dana Ash-McGinty

Principal Broker | Realtor® | “The Real Estate Maven”

Dana Ash-McGinty is the Principal Broker of ASH | MCGINTY, a Washington, DC Real Estate Brokerage. This real estate maven has 15+ years experience in residential, commercial and land sales in addition to multi-state residential renovation, re-zoning, and condo conversion projects. A sought after real estate authority, she has been featured on CNN and in various real estate and financial publications. Dana is married to the highly esteemed Dr. Dana W. McGinty, a Washington, DC based internal medicine physician. They are often referred to as “The Danas”.

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Buyer Tips Credit

Checking Your Credit Scores

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We are all defined by many numbers.

Of course, there’s your social security number. Then your bank account number. Credit card numbers. Investment account numbers. Various entities have assigned you a number. Some people can even tell you their SAT scores but, have no idea what their FICO scores.

Your FICO score (developed by the Fair Issac Corporation) is a snapshot of your credit history and a measure of your creditworthiness, at least in the eyes of most lending institutions.

FICO scores are important because those with best scores get the best deals, by far, on the credit market. I would advise to not borrow money at all (aside from a mortgage), but if you must, at least borrow cheaply. Have a sterling credit score and comparison shopping fore credit are key.

There are three credit bureaus- Equifax, Experian and Transunion.

Every year you are entitled to one free report from each of the credit bureaus. To see your credit report, for to annualcreditreport.com.

The report is free. However, there is a small fee if you want your score.

Many leaders will use only one of the credit bureaus. Mortgage lenders will typically get all three scores and use the middle score for credit considerations.

If you want to see receive all three scores, go to myfico.com.


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