Many of my clients come to me for assistance in helping them clean up damaged credit scores even though they already own a home. They know that improving their credit scores will save them money on many things such as car insurance, automotive loans, or any other type of loan. The goal is to secure the best interest rate available and save money… It’s that simple.
If a consumer had credit issues in the past but still managed to qualify for a home loan, most likely that borrower took on a loan with a higher interest rate because of the low credit scores. But if a borrower feels as though they’re stuck in a “sub-prime” loan, you shouldn’t give up the battle.
I advise all of my clients to follow our three basic rules to evaluate credit scores and initiate the clean-up process.
Step 1: Order Your Credit Reports and Scores
Order credit reports and scores from all three national credit bureaus, TransUnion, Equifax and Experian.
The borrower should pull their own reports so they don’t lose points for hard inquiries. The loan officer can pull reports when the borrower is ready to put their loan in process.
Step 2: Verify the Data Being Reported
It is the consumer’s responsibility to verify that the data being reported to credit bureaus is accurate. Some examples of what to look for are as follows:
- Misspelled names
- Wrong addresses
- Incorrect Social Security information
- Make sure you recognize all creditors being reported
- Make sure the negative items belong to you
- Look for signs of identity theft
- Check for unauthorized hard inquiries
- Make sure all credit card limits and balances are reported accurately
- Check the statute of limitations in your state and see if some derogatory items should be removed
- If you have made payments on an account that is not being reported to all three bureaus, call the bureaus and ask them to report the positive accounts that are missing
Step 3: Dispute Inaccuracies Immediately
- Send letters of dispute to the credit bureaus to have errors on your credit reports corrected.
- Send copies of the letters to creditors who are reporting the inaccurate information.
- By law, the credit bureaus have 30 days to investigate claims and make any appropriate updates.
My commitment is to help you become more educated about how the credit scoring process, which will ultimately make sure that you receive the very best value from every financial commitment that you make from this day forward.