So many people are looking into credit repair after foreclosures, bankruptcies, divorces, medical bills…. You name it! With tough times being seen by many of our neighbors right now, odds are that if not you then someone very close to you needs credit repair.
Why would you do it? Everything we need that has to be financed (house, car, credit, home depot cards…) is paid back with interest. You want to make sure you have the highest score possible so you get the lowest rate possible. If you were getting ready to buy a house and through getting pre-approved were told your score needed improvement, or tried to buy a car and were told your score is too low. Maybe you took a new credit card and didn’t understand why your rate was 14.99% for new purchases. This is when people start thinking of credit repair, or after a major life event like bankruptcy, divorce, major medical events and bills.
What to look out for? Many credit repair companies have popped up. I see them everywhere and am contacted by them weekly being in the industry and knowing I come across clients who need higher scores on a regular basis. Things to look out for when interviewing the credit repair company are:
1) Do they abide by the Credit Repair Organizations Act? This is a consumer credit protection act by the federal trade committee put out to protect us as consumers from unsavory people who try to steal our money and make false promises of credit repair.
2) Do you actually see results? Many things that need to be corrected on your credit report can be done so on your own with the advice of an experienced mortgage consultant. Recently, a client of ours now under contract to buy a house completed credit repair through their own actions and my advice and had their scores jump 100 points in 4 months and paid nothing but a few stamps and couple hours of their own time.
It is distinctively prohibited by the Credit Repair Organizations Act for these companies to make statements, advise, any misleading or untrue information to you. They also can’t “charge or receive any money or valuable consideration for the performance of any service which the credit repair organization has agreed to preform for any consumer before such service is provided” according to the Federal Trade Commission. There also must be a written contract as well.
My advice~ Do your homework! When applying for a mortgage if you are told your scores are too low, make sure you are working with someone who will tell you what to do and track your progress to make sure you can buy someday. Take accountability for your past actions. If you have things to repay to get your credit in order, do so. Make sure you are using your credit. Too many times I see what I call “cash and carry” people who prefer to not use their credit, usually after a bad experience. If that is you, open up a card or two. You don’t have to charge them to the max, but use them and keep your balances at under 30% of your limits. This is just one way to boost your score. You can also ask your creditors to boost your limits for a quick bump in scores.
If you need help with your scores and are looking to buy a home or need to refinance soon let me know~ We can put my advice to the test of that company that may mislead you, under deliver and over charge you.