How to Build Credit Credibility

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs, Uncategorized

Your credibility in the investing world is based upon your credit score. It does not matter if you have purchased one home or ten homes, if your credit score is lower than the threshold used to determine credit approval, you could be facing higher interest rates and even higher mortgage payments. The credit score you have today, does not have to be the one you have tomorrow. Building credit credibility requires a bit of time and a great home budget.

To start the process of rebuilding your credibility, you need to know what factors are lowering your credit score. A complete credit report with credit score is a great place to start. This report will tell you the negative reports that have been filed that are lowering your credit score and thus your loan credibility.

Once you know what factors are hurting you financially, you can make a list of the items you can change today and those that will take a bit more time to resolve. The most immediate changes that can be made include the repayment of current bills,  loans and credit cards. Paying your bills on time has a huge effect on the credit score, so even if you pay off every negative past due payment on the credit report, it may not have the same impact as paying your current bills on time would have.

Next, pay off the smaller bills one at a time. If there are silly bills on your credit report that are considered negative and continue to lower your credit score, pay those off. If the bills are larger, contact the companies and try to work out a smaller final payment or a payment plan. Once these bills start being reported as Paid On Time or Paid in Full, the credit score and your credibility will improve.

Time is the key to building credit credibility. The lender does not believe in quick fixes and neither does your credit score. Over time, with patience and attention to paying ALL of your bills on time, the credit score reported by all bureaus will rise and that will mean your actions are paying off. It will take one to two years to rebuild the credibility needed to secure the lowest home interest rates on your loan.

The lower the home interest rate, the less money you will have to repay. This is a huge factor in being able to afford the home you are currently living in and maintaining that credit credibility you have worked so hard to secure.