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Home Loans - Repair Your Credit Before You Buy
Before you take out a home loan or make any major purchase,
you should be aware that any prospective lender will want to take
a look at your credit report. Your credit report is a record of
all of your past financial dealings, and any loans, credit cards,
judgements, bankruptcies or other major financial transactions
are listed there. Along with your credit report will come your
credit score, which is a three digit number between 300 and 850
that represents a distillation of all of the above. That score
represents your entire financial life, and your ability to obtain
financing for any major purchase depends on having a good one.
What if you don't have a good record? Should you go to one of
those companies that promise to repair your credit? What you
should do is repair it yourself.
The idea of credit repair is a myth. There is no magic
solution to fixing problem credit, and any company that promises
to do so is only interested in your cash. Your credit report and
score are maintained by three separate credit bureaus that keep
pretty accurate accounts of all financial dealings done under
your Social Security number. There is no way to quickly "fix" a
faulty credit report. You can, however, fix it yourself and fix
it for free. It just takes time.
The way to repair your credit record is to start paying your
bills on time and paying off your debt. More than one third of
your credit score is determined by your past ability to pay bills
and to pay them on time. Start doing so now. It may take a year
or two, but steadily paying your bills without making any late
payments goes a long way towards repairing a credit score.
Another third of your score is determined by your ratio of debt
to available credit. If your credit cards are maxed out, you need
to pay off or pay down your balances. It's tough to obtain a loan
when you are already in debt to the gills.
Stop using your credit cards, if possible. Don't cancel them;
just stop using them, particularly if you have a balance to pay
off. You want to reduce your debt. Pay cash when you can. And
check your credit report for problems. You can obtain a copy for
free from the free credit report
Website.
Repairing your credit record takes time and discipline. There
is no quick solution other than paying your bills, paying them on
time, and waiting for the damage to heal. After that, you should
be in good shape to obtain your home or car of your dreams.
©Copyright 2005 by Retro Marketing.
Charles Essmeier is the owner of Retro Marketing, a firm
devoted to informational Websites, including End-Your-Debt.com, a
Website devoted to debt consolidation and credit
counseling information and HomeEquityHelp.net, a site devoted
to information on mortgages and home equity
loans.
MORE RESOURCES:
Clock ticks down on credit bureau class-action dealIndianapolis Star, United States - 53 minutes agoIn a class-action settlement, credit bureau TransUnion has agreed to provide free credit- monitoring services to millions of consumers to settle claims it ... |
MORE COLLEGE CREDITChicago Sun-Times, United States - 10 hours agoDespite the current nationwide credit crunch, the State of Illinois secured $100 million for the student loans by tapping a new source -- credit unions. ... |
Credit - Google News
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