Rebuild Credit

Get a copy of your credit report by requesting it at Free Annual Credit Report. 

• You can get one free annual credit report from Transunion, Experian, and Equifax once a year at no charge.
• If you are applying for a mortgage and your loan officer ran credit, you can request a consumer copy of your tri-merger credit report.
• Review your credit tradelines and see if there are any errors.

Rebuild Credit By Disputing Errors on Credit Reports

You can dispute any legitimate errors that you can prove it is not yours.

• Do not go on a rampage by disputing all negative derogatory credit tradelines that are reporting correctly.
• Credit repair companies normally dispute any derogatory credit tradelines whether they are reporting correctly or not.
• Disputing correct information will lead to potential disaster if you are applying for a mortgage.
• You cannot have credit disputes during the mortgage process.
• There are exemptions on credit disputes which we will talk about in a different blog about credit disputes during the mortgage process.
• Credit disputes on legitimate errors can be removed if you have documentation.
• Do not hire a credit repair company.
• Hiring a credit repair company can backfire on you if you are planning on applying for a mortgage.

Rebuild Credit By Making On-Time Payments

Make on-time payments religiously.

• Many consumers get late payments on their credit reports because they forget to make the minimum amount due.
• Whether the minimum payment is $5 dollars or $500 dollars, a thirty-day late payment is a thirty-day late payment and it will report to credit bureaus.
• One 30-day late payment will plummet your credit scores.
• Late payments and other derogatory credit tradelines will report on the credit bureaus for 7 years from the date of last activity.
• If you have high balances on your credit cards, this will hurt your credit scores.
• By paying down your credit card balances down to a 10% or lower credit utilization ratio will increase your scores dramatically.

Rebuild Credit By Being Added As Authorized User on Credit Card

Adding yourself to an authorized user credit card is one way of boosting your credit scores.

• The maximum effect for adding yourself as an authorized user is to add yourself to a user with the same last name at the same address.
• The second maximum effect is to have the same last name but different addresses between the main user and the authorizer.
• It still works but the increase in credit scores is not the same as if both the main user and authorized user lived at the same address.
• Having an authorized user with a different address and different last name does increase credit scores but to a nominal increase.
• It is not like having the main user and authorized user with the same last name at the same address.
• The credit bureaus and FICO scoring formula is getting smarter and smarter as technology advances.

Rapid Rescore For Fast Credit Update on Credit Reports

Once you have paid down your credit card balances, collections, charged-off accounts, judgment, or other derogatory credit tradelines, it takes over 30 to 60 days to get the results updated on the three credit bureaus. If you are in the home buying process and need to qualify and get pre-approved fast, your loan officer can do a rapid rescore for a mortgage.

How Does The Rapid Rescore Process For Mortgage Work

A rapid rescore is when the loan officer gathers documentation and receipt of your payment to creditors and gets the updated information reported to the credit bureaus in a matter of three to five business days. Rapid rescore normally costs $30 dollars per creditor update per credit bureau. Therefore, it costs around $100 per creditor update to all three credit bureaus. Rapid rescore for a mortgage can run quite costly. Borrowers are not allowed to pay for rapid rescores. The mortgage lender covers all costs for rapid rescores for a mortgage.

Rebuild Credit With Secured Credit Card

Secured credit cards are the easiest and fastest way to rebuild credit to qualify for a mortgage. Again, getting a secured credit card does take a few weeks. To report on the credit bureaus takes another 30 to 45 days. Utilizing secured credit cards to rebuild credit does take time. The sooner you get started, the quicker you rebuild credit. The recommended number of credit cards is three to five secured credit cards with at least a $500 credit card limit for maximum effect. Each secured credit card can boost a person’s credit score by 30 to 50 points. Secured credit cards is the best tool in preparing for a mortgage with bad credit.