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Boosting Your Credit Score - The Hard Road

 

 

So it’s time to buy your first home. You’ve made it this far. A family is imminent and that backyard of your dreams is so close you can just smell the barbecue. You’ve hit the home stretch only to realize that your credit score is not high enough.

 

This shouldn’t be the crusher of dreams. There are ways to raise your credit and with credit repair companies out there, it may happen almost instantly, with no paper work required by you. Other ways may take you several years. Here are some tips to initiate this process efficiently. 

 

For starters, here is some data that will determine the tiers of credit scores:

 

Perfect credit score: 850

Excellent score: 760-849

Good credit score: 700 to 759

Fair score: 650 to 699

Low score: 649 and below

 

Of course the score required is different according to where you are but the general consensus is that lenders will seek out a score of 660 or higher before they will approve a mortgage. If you’re not quite there yet, here are some game plans:

 

Fix the errors:

This is a quick way to get the ball moving. For example, if there is a credit card that doesn’t belong to you showing up, you can clean this up in a matter of two months. You must first get a copy of your free credit reports from TransUnion, Equifax, and Experian (the three major credit bureaus). You can do this for free.

 

Build a credit history:

It’s not the end of the world if you have low credit because in the end, low credit does not equal bad credit. You may be required to open a credit account, like a credit card and make regular payments on it and the easiest way to do this is by selecting a credit card with no annual fee. This will put you in good standings and start raising your credit. 

 

Handle delinquent accounts:

Now is the time to handle all of the accounts that are in collections. This can settle your score in a timely manner. You’ll see a positive spike in your score once these corrections have been made. 

 

“Make sure you don’t re-age these accounts, because they’re going to drop off soon,” says Nathan Danus, CDMP and director of housing and community development at DebtHelper in West Palm Beach, FL. Negative information typically “falls off” your credit report after seven years, so if you're close, it’s best to just wait it out.

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