This post contains affiliate links
Why Your Efforts to Improve Your Credit Score Aren’t Working and What to Do About It
Your credit score is one of the key factors that lenders look at when you apply for a mortgage loan or any other type of credit. If you are someone with a credit score below 600 you have probably had lenders deny you and your attempts at credit repair have been unsuccessful.
If you have issues with your credit you will not be able to qualify for a mortgage or get credit cards, and you might even be refused a bank account if you owe on any previous accounts. Many people struggle with maintaining a good credit score. That is because it fluctuates and you might barely qualify for a loan one month and suddenly be denied because your score dropped below the minimum requirement.
What can you do about this? How can you raise your credit score so you stop having these issues? The first thing you have to know in order to successfully do credit repair yourself is to know what is on your credit report. The first thing you need to do is take a look at your credit report and see what the lenders see when they pull your credit. Are there old inquiries, delinquent accounts, or charge-offs that may be causing lenders to see you as a credit risk?
If you dispute anything, make sure it is an error. Disputing items on your credit report will not always make them go away. You could dispute something that was close to expiring and now you have just made it “active” again and restarted the clock ticking.
Things that affect your credit score include:
- Late or missed payments
Start building credit. Your score won’t improve just because you let it sit for 7 years. The only way a lender can get an accurate view of your ability to pay bills is if you are actually paying bills. They want to see how long you’ve had these accounts and your payment history.
So now that you know what affects your credit score and that you need to build credit to improve your score, and this is how you do it:
- Self Lender is a great program to use if you are not able to qualify for any type of loan. In this program, you open a CD (certificate of deposit) for the minimum amount which is $500 and you can opt to pay $25 per month for 2 years. At the end of those 2 years, you’ll get that $500 plus any interest that was paid into it. Plus, it shows on your credit report as an installment loan which helps you build up your credit.
- The second thing that you want to do is to get a credit builder card. It is a secured card that helps you build credit because you have to make a deposit ($200) and then use it responsibly like you would any other type of credit card…make on-time payments, stay below your limit, and don’t use it for cash withdrawals.
- Apply for a $1,500 line of credit through Hutton Chase. It is a guaranteed approval and you won’t be turned down. This company is similar to Fingerhut if you have ever gone through them. Just like Fingerhut you purchase products from their online store. You have to be 18 years of age, have a valid credit or debit card (checking account), and be able to pay $25 a month. Standard requirements and you have two options, you can pay $210 or start with as little as $60.
So, you can begin to improve your credit score for less than $300 out-of-pocket. The Self Lender and credit builder card reports to the credit bureau within the first 30 days so you will be on your way to a higher credit score which will help a lot when it comes to applying for FHA loans for the first time home buyer program. You will have a much better chance of qualifying if you have some positive credit history to show a prospective lender.
If you need help with fixing your credit check out http://www.paytoncreditservices.com/learn-more. We specialize in helping credit challenged individuals become mortgage ready.