PrivateMoney.me - Tips to Fix Your Own Credit

If you are considering the purchase or refinance of a new home, car or if you are applying for a private money or hard money loan for the purpose of investing in real estate you will definately want to take some time in boosting your credit scores and improving your credit history...especially in today's financial markets when the opportunity to qualify for a loan is limited.

Your credit scores are extremely important in qualifying for any type of loan and just by simply taking a little time you can quickly raise your scores potentially saving you $1000's in finance costs.

What most people don't realize is that you can easily increase your scores by 20, 30, 50 or even 100 points by simply carrying out a few tips that I've laid out below...

Your first step in fixing or establishing your credit is to find out your credit scores and to view history on all 3-bureaus...

PrivateMoney.me Recommends:

Once you've pulled your credit report and understand what you are looking at...only then will you be able to assess the situation and begin raising your scores.

When Viewing Your Report, Make Note of The Following Items:

If you find credit accounts that are not yours, have them removed from all 3 bureaus by submitting a "dispute resolution" form offered through most credit reporting agencies.

If you have accounts that are more than 30 days late, make sure this reporting is accurate...if not accurate, submit a dispute resolution and have these 30, 60, 90, or 120 day late entries corrected.

If you have "charge off" accounts that are more than 3 years old....do not do anything to correct them unless the balances are less than $100.00. If less than 3 years old and the cost to correct this is less than $500.00 through settlement agreement or reduced payoff...you may want to consider paying it off so long as the creditor agrees to remove the derogatory entry and set the balance owed to "zero" this may be something to consider. Be sure to get agreements in writing with creditors prior to making payoff arrangements. Creditors typically will agree to settlements of 20%-30% of the total amount owed.

Check account limits against the amount you borrowed for each of your creditors. If you are over your limit, pay it down as much as possible so that your amount owed does not exceed 1/3 to 1/2 of the allowable limit. If you have larger account i.e. 10k, 15k or 20k then this may not be an option, but if you have several 1k, 2k and 3k accounts and you have the ability to reduce the payoffs and or pay them down by 1/2 then your scores will improve. Also, you may want to consider contacting each of your creditors and asking them to increase your limits {but if approved do not use the credit card}. This option allows you extra points simply by rasing the limit over the amount you owe. The key is to not use the extra credit line extension and to work from that point to pay the account down further, you so your limit is at least 1/2 preferably 1/3 of the allowable limit.

If you have less than 3 credit lines and their balances are less than $500, you may want to consider opening secured and unsecured credit lines. We suggest qualifying for a 100% guaranteed visa card or possibly one of the following cards found here.

...by simply doing these few items, you can quickly increase your credit scores. We suggest that you keep all accounts open or if part of the negotiation for paying off the account is to close it at a much reduced payoff then you will most certainly need to reestablish new credit with several guaranteed approved credit cards.

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