when economies are experiencing difficulties and losses due to default are no longer acceptable. No matter what your credit situation may be knowing where you stand soon rather than later will save you money and time. You will find tips for getting your credit in to shape. 1. Get a copy of your credit reports. You need to know what's going on now so you can start planning a strategy for repair. Free credit reports are available to you at www.annualcreditreport.com. This website is the official site you can get your free report from all three credit bureaus yearly. You have to pay to access your scores. 2. Dispute any mistakes on your credit report. You can do this online at www.annualcreditreport.com. Common mistakes you might find are old accounts you paid off that still show up as owing a balance, a family member's credit getting mixed up with yours, and double reports for one line of credit. Receipts or letters from these creditors will help you out tremendously in getting these items removed. When disputing the items you must dispute the item with the credit bureau. Calling the company that put it there will not accomplish anything. The credit bureau will request proof of the debt with the reporting company and if there is no response after 30 days the item will be removed. 3. Pay off judgments. Judgments are different from collections. If you have a court order to pay money, this problem will not go away for up to 20 years in Texas. Consider paying off new collections less than one year old. These collections are still hurting your score, and paying them off often improves your score. Get up to date on child support and have it automatically drafted from your paycheck or bank account. Get up to date on Federal student loans you owe. Your first chance of getting a loan may be FHA which is a loan backed by the Federal Government. If you owe money to the IRS for back taxes, work out a payment plan with automatic draft. All of these items listed are very big red flags that will stop you from getting a loan. You must deal with them. The amount you owe makes up 30% of your score. 4. Pay your bills on time. This makes up 35% of your credit score. 5. Do not cancel accounts. Many people make the mistake of canceling credit cards thinking it will make their score go up. Closing the accounts makes your credit history appear shorter or "younger" than it actually is. Your length of credit history makes up 15% of your score. 6.If you have little or no credit, opening a few lines of credit now is important for establishing your history. A personal loan, store card and a credit card is a good place to start. You may have to make a deposit with a bank to obtain a personal loan or secure credit card. The types of credit you have makes up 10% of your score. 7. After you have a good mix of credit lines avoid opening new credit lines. Applying for multiple store cards when pressured at the register will only bring your score down. New lines of credit in the past 6 months makes you look desperate for credit. This makes up 10% of your score. 8. Open a savings account. At the very least start making small deposits. Having a history of savings will signal responsibility to lenders and make it easier to obtain new credit later on. 9. Consider joining free credit watch programs from your bank or credit card companies. They can alert you to any changes in your credit and help you avoid loosing valuable points. 10. Do not be afraid to ask for help. If you are considering getting outside help, check with the Federal Trade Commission at www.ftc. gov. They can help you spot reputable credit repair companies that will help you repair or improve your credit for a fee. Further credit repair tips and programs for helping you budget extra money will be discussed at my free monthly home buyers class. Call (210) 260-6617 or e-mail at k.perk@sahomelocator.com for time and directions. |
124 Sherwood Dr San Antonio, TX 78201 Phone: 210-260-6617 E-Mail: k.perk@sahomelocator.com
16902 San Pedro, San Antonio TX, 78232 k.perk@sahomelocator.com