How can I find out what my credit rating is?
“There are several ways to do this”. You can purchase a credit report from one of the three national credit reporting agencies: , and . They also offer extra services for a price, where you can get regular reports on your credit.
Better yet, you may be entitled to a free credit report every twelve months from each of these three agencies. To request your credit reports, visit www.annualcreditreport.com. At this site, you can learn how to get your free credit reports. You might also want to visit the Federal Trade Commission's web site for consumers at for information about free credit reports and for some good advice about your credit.”
Overcoming Credit Problems
• Determine precisely what the problems are. You will need to have a clear picture of your current credit status so that you know what to concentrate on. The quickest and easiest way to accomplish this is to run a credit check and begin to analyze it. We have made arrangements with to offer a free copy of your credit report as well as a trial offer of their CreditCheck monitoring service. Click here to get your free report.
• Start by getting the problems under control now. Do not incur any new debt. Do your best to begin to live within your means. This will be an advantage now, when you are applying for a loan, as well as later, when you will need to meet your monthly mortgage obligation.
• Make a a commitment to a program of saving. Even if you have had credit problems, there are options available for mortgages if you have down payment money available.( There is little or no hope if you have both credit problems and no cash)
• Concentrate on your needs in housing before your wants. Re–establishing your financial footing is not as difficult as it used to be, but it is impossible if you attempt to buy more house than makes sense. Be conservative!
• Concentrate on those lenders who specialize in working with those who have had credit problems. Spending time (and money) applying to lenders who do not work with credit blemishes will accomplish nothing. If you have a local source that you know will consider such loans, take advantage of them. Other sources, available online, such as LendingTree, which has a large network of lenders nationwide, including those who have experience in dealing with credit problems. Come and visit our lenders who will help you with your credit problems!
Straight Talk:
So by now, you should have your Tri–Merged credit report in front of you for each of the borrowers that will be buying a home. (If you do not have a copy of your credit report, we recommend you obtain your own copy before starting your home buying process!)
If you reviewed the You and Your Credit page, you should also understand how to read it and how to manage your credit..
Now, the big question is, how do you fix it the RIGHT WAY during the process of purchasing a home.
The most important rule – NEVER tell a collection agency you are preparing to buy a home. If you do, they will leverage this fact against the amount owed and become simply inflexible on settling for an amount less than you owe under the FALSE impression an underwriter will require you to pay the collection in full.
If you already have, and are now experiencing this inflexibility with no options, we suggest you inform the collector that satisfying the debt is NOT a requirement of an underwriter, but something you want to do to repair your credit for the future and start your home ownership with a clean credit slate. Advise them politely, this is there opportunity to be paid. Give them an amount you are prepared to settle for (make sure you’re ready to pay!), and give them a date two or three weeks into the future as your mythical "closing date" to settle by. Then sit back and wait.
You have absolutely nothing to lose at this point. Use this process only as a method of last resort!
MYTH: You must pay the full amount the collection agency wants you to pay!
FACT: Third party collection agencies pay pennies on the dollar to purchase your debt outright from the original creditor. Typically, you can and should settle any legitimate debt for at least 50% of the amount owed. If the debt is really large, you may wish to hire an attorney to review your state statutes with regards to third party collection activities. Some states, may not allow for a third party collection agency to charge more than THEY PAID for the debt plus interest and reasonable collection fees.
What is the right way to clean collection accounts and gain FICO® fast? (Remember – Work from a TRI MERGED credit report!)
TAX LIENS – BACK CHILD SUPPORT – JUDGMENTS
The easiest step begins with Tax Liens, Back Child Support and Judgments. Settling these account is almost universally required and will increase your credit score. No if, ands or buts about it.
In instances where the amounts are significant, establishing a repayment plan will allow you to qualify for an FHA, VA or Sub Prime loan, but will have no positive impact on your FICO® score.
REVOLVING – INSTALLMENT – MEDICAL – OTHER
For these account types, the most important date you can look at is the "Date Last Reported". If the last reported date is older than two years on a debt, settling this account may indeed have a negative initial impact on your : –
FICO® score and take 90 to 120 days or more to recover from. Don't settle this old of an account "pre contract" without first reviewing it with your Lender, Broker, Banker.
Revolving Charge Offs — Ignore duplicate listings from multiple collection agencies. Focus on the most current owner of the debt. If the date last reported is within the last two years, settle these accounts as cheaply as possible!
Installment Charge Offs — Ignore duplicate listings from multiple collection agencies. Focus on the most current owner of the debt. If the date last reported is within the last two years, settle these accounts as cheaply as possible!
Other Charge Offs — These include, cell phone, utilities, etc. You should again, Ignore duplicate listings from multiple collection agencies. Focus on the most current owner of the debt. If the date last reported is within the last two years, settle these accounts as cheaply as possible!
By the way, NEVER settle on government insured student loans. Pay these in full and if possible, attempt to reactivate the account or reestablish the loan as active under a payment plan.
Medical — While a conventional lender may require large medical collections to be paid, this at the underwriters discretion. Typically, you can expect to pay any medical collections when using conventional financing unless you have an accepted dispute on the debt
