Start off the New Year with Credit Repair

By Dave McKean

Friday, January 11, 2019


It seems that we have a lot of people with credit issues and they just don't know what to do to fix their credit.  Well, it's not something that happens instantly as there is no quick fix for bad credit, but it can be fixed over time, but first, we have to look at the problem before we can find a solution.  Your credit is one of three very important legs (income and assets are the others).  Here are a few tips that you may find helpful:

  • Collections - These will appear on a credit report and some may appear to be reported 5 years ago or so and others look like they were reported a month or two ago.  The ones that are reported a month or two ago are hitting your credit pretty hard and they will likely hit your score again so you need to get rid of them!  That means, pay them, negotiate with them, get them deleted, but do not leave them there and hope they go away!  This is not a cold or the flu but a virus that will kill your credit!  If the collection is old (over a year) then you can let it go if it is a small amount, but if it is a large amount (over $2000.00) you will likely have to pay it when you buy something unless it is a medical collection.  A creditor can re-report a collection whenever they feel like it so if you inquire about it then be prepared for them to re-report it!  Amy collections you can pay and have deleted from your credit profile will help your score immediately! 
  • Judgments - Generally have to be paid when you buy anyways!  Pay it ASAP as it is better to have it paid sooner rather than later to get your credit score up!    
  • Charge Offs - These are a lot like collections.  It is just more delinquent and likely written off by the creditor.  The creditor still has the right to collect so again negotiate on this sooner rather than later unless it has not been reported in a long time and it is a small amount (Under $2000.00)
  • Late payments - These are also credit score killers.  You need to avoid any new late payments of 30 days or more.  Any recent 30-day late will hurt your credit score.  If you have a 550 credit score with no late payments in the past 12 months then you can get an FHA loan!  If you have one late payment, then you will likely have to get your score above 580 to get a loan.  Avoid more late payments of 30 days or more if you want to buy a home. 
  • Credit balances - The lower your balance is as a proportion to your limit, the better!  You have a $1500.00 balance on a $20,000.00 limit card, then great!  You have a $1500.00 balance on a $2000.00 limit card then that will hurt you.  You can ask for a higher limit on your credit card?  Also, the highest credit scores I see are ones with maybe $20,000.00 - $30,000.00 in credit card limits.  People with $150,000.00 in credit card limits are a higher risk to go on a drug binge, charge up everything and file Bankruptcy!  Well, not really, but there is more risk to the creditor with a higher balance. 
  • Bankruptcy - Every year it gets better and the Bankruptcy comes off your credit after 10 years. 
  • Foreclosure - Same as Bankruptcy, but if a foreclosure is the only derogatory item then your credit score can stay high through the foreclosure process.  Yes, I agree that is crazy!
  • Short Sale - Same as Foreclosure, but you can get a loan sooner! 
  • Disputed items - Disputing credit items does not usually work as we would generally ask for the dispute to be removed and removing a dispute usually drops a credit score.  The reason for that is because a credit score is not looking at a disputed item on the credit report and when the disputed account comes back, it gives us that bad virus again and messes up a credit score. 
So the moral to the story is, clean up your old payments, and don't be late on anything new.  A credit report has no idea how much money you make or what you have in the bank!  It does not care if you are related to the President or if you have the same blood type as a great athlete.  It looks at your credit and your credit only and it comes up with a number that way!  You can also try credit repair to remove things, but that takes time and costs money!  The above way does the same, but you need to keep paying your bills on time. 
Categories: Mortgage Related News