Fixing Your Credit To Buy A Home

Your credit score impacts your ability to buy a home. This isn’t anything new. Yet many people do not know where to start in order to get that FICO score where it needs to be (700 or above is optimal but you can buy with a 580). Below is a step-by-step guide for making some improvements.

Buyer Tips: Fixing Your Credit To Buy A HomeGet Copies of Your Credit Report

There are three bureaus that report your credit to mortgage lenders, and most lenders request reports from all three. So the first step in this process is to get a copy of your report from Trans-Union, Equifax, and Experian.

AnnualCreditReport.com is a good place to start as it is affiliated with the Federal Trade Commission and offers one free report per year from each of the bureaus. The process of getting the three reports is pretty straightforward. Once you are looking at your report, make sure you print it or save it because you will not be able to return to that screen for an entire calendar year. In addition, these reports do not feature an actual credit score, but they will give you a great idea of what your credit looks like. You may not need to know your actual score anyways, so these reports are a good start.

Know What You are Reading

Each bureau’s report will look slightly different, but it’s basically a theme and variations. They will show all your credit inquiries, all the accounts you currently have open and have had open in the past, the amount of debt you are responsible per account, and all your payment history. Pay special attention to each creditor, especially if you have a common name. If there is something that does not belong to you, make a note of it.

Call Negative Creditors

The reports will show late payments or other delinquencies. In light of this, the best thing to do is call any creditors reporting negative information and ask them to remove it. This does not have to be a confrontational call, so speak in a conversational tone and calmly make your request.

You can ask again if they decline, and ultimately, you may want to speak to a supervisor. Make a note of the date, time, name of the person you spoke to, and what they said. Oftentimes, your call will result in the creditor removing the negative information, so that’s great!

Get It In Writing

Once they have agreed to remove the negative information, make sure you ask for a written confirmation that this is being done. This is important for two reasons. First, you now have their word that they are willing to remove it, so you can appeal directly to the credit bureau if it doesn’t happen or you need more help in the future. Second, if you are planning on applying for a mortgage in the near term, your report may not be updated in time and this letter will clarify that the negative information has been remedied.

If there is a charge off or collection account that shows up as unpaid in your report, make sure you call prior to making any payments. Sending a check and hoping it all gets resolved is a longshot.

Call the creditor and explain that you have the ability to pay the amount in question, but explain why it should not be on your credit report in the first place. Request that they provide a letter confirming their deleting of the account from the credit bureaus if you pay it in full. As before, make a note of your conversation, date, time, and whom you spoke with.

Filing a Dispute

If something is blatantly wrong on your report and the creditor will not remove it, it then becomes time to file a dispute with the credit bureau. Go on-line to each agency and they will instruct you as to their policy for going about this.

About The Author: Kimberley Kelly is an experienced Palm Springs short sale expert helping home buyers and sellers in La Quinta California . If you’re interested in learning more about Kim, please visit her Palm Desert real estate for sale blog.

About Anita Clark Realtor

Anita Clark has written 876 posts on this blog.

Anita is a residential Real Estate Agent in Warner Robins Georgia, with Coldwell Banker SSK Realtors (478) 953-8595, aiding buyers and sellers with all their real estate questions on her Warner Robins blog.