All these numbers, all these accounts, and so many dates! Where did all this come from? What does it mean? These thoughts go through many people’s minds when looking at a credit report for the first time. No matter what bureau your report comes from (TransUnion, Equifax, or Experian), they will have a complete history of all debts and credits you have.
As the consumer, it is your job to find mistakes on your report. Let’s face it, the big credit bureaus don’t care what your report looks like – they just gather information. The main categories you are responsible for reviewing include disputes, history, outstanding debts, and your personal profile.
Start With a Clean Slate
It’s time to put on your detective cap, and start looking for errors in your report. If you see something you don’t recognize, start writing to the reporting agencies. It is up to you to tell them they have reported incorrectly, and you are not going to stand for it!
In a perfect world, your stern and direct letter would be enough to make that blemish disappear. Too bad it isn’t always that easy. It’s only the beginning!
If you don’t have the time or patience to deal with this mess, hire a professional. We are experts and can clear it away while saving you the headache. Our experts will stay on top of letters, phone calls, and other forms of contact.
After receiving news that your report is clear, start stacking it with positive accounts. If you don’t have a credit card, get one and pay it off every month. That will do wonders to boost your score!
More Numbers to Consider
The two items on your credit report that are most important in a home loan include inquiries and utilization.
Utilization is a tricky subject. You want to be sure you have a credit-to-debt ratio but not too much. This proves you can be trusted to pay the loaned money back. Your ratio should land between 40% and 60%. If it’s too high, pay off some debts. If it’s too low, open a new credit line or something that will boost the bottom number.
The ideal recommendation is to walk into a lender’s office with a perfect credit score. When that isn’t possible, make sure you have cleaned up any loose ends. Issues on your credit report could slow down the entire process – you want to avoid this.
You will also receive the best terms for a loan, and who doesn’t want that?
What to Take Away
Just because your credit score is less than perfect doesn’t mean getting a home loan is impossible. We recommend hiring a professional to help understand the changes needed to get on the path to clear credit.
Do you have experience in improving a bad credit score? Share your tips and tricks with us in the comments below. Start working to lower your number by getting in contact with one of our specialists.