Hello Heather - I'm sending you good thoughts for a prosperous day! ~HP
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Heather  Presha
Heather Presha
REALTOR®, Lic. #01493661
(323) 559-9081
PreshaProperties@gmail.com
KELLER WILLIAMS Inglewood
111 N. LaBrea Ave., 5th Floor
Inglewood, CA 90301
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Is This Your Situation: Need to Revamp Your Credit Before Buying a Home?

 

Credit reports and credit scores are a fact of life. Lenders use your scores to decide whether you’ll likely be able and willing to pay back a mortgage, whether to give you a credit card and how much you’ll pay in interest for most forms of credit.

Since credit reports and scores are so important, they’ve taken on a kind of mystical aura that's led to many misconceptions. How much do you really know about scores? Check out this list of common myths to find out. How many did you think were facts?

Myth: If you experience credit problems, your credit score will not improve for seven years. 
Fact: You can make a significant difference in your credit score by changing your ways and paying bills on time. That's because lenders place more significance on the most recent entries on your credit report rather than the old ones.

Myth: If you pay off your debts, the record of your bad debt will disappear.
Fact: Bad debts, charge-offs and late payments can remain on your credit report for up to seven years. That's why if there were extenuating circumstances to explain your trouble paying on time, you should send the credit bureaus a letter about your situation.

Myth: If you catch up on your late payments, they’ll be wiped off your credit report.
Fact: Your credit report must reflect that you caught up, but it will also show that you were late.

Myth: If you have a high credit score, one late payment won't hurt.
Fact: Unfortunately, this is a case of one bad apple spoiling the whole bunch. The first time you are delinquent, you can lower your score by as much as 100 points. The later the payment, the more it will hurt your score.

Myth: If you want to fix errors on your credit report, you have to pay for it.
Fact: There is no fee involved in correcting mistakes on a credit report. Contact the credit bureau that created the report and have them correct the mistakes.

Myth: If you check your credit report too many times, you'll be penalized.
Fact: People can check their credit report as many times as they want without hurting their credit rating. In fact, credit bureaus encourage you to keep a watchful eye on your credit report so you can spot any mistakes.

Myth: If you close as many credit cards as possible before applying for a loan, you stand a better chance of being accepted.
Fact: Having open credit cards doesn't hurt your credit score. If they are in good standing, they may even help your case. A credit card only hurts your chances when it's maxed out. Try to keep your use to no more than 25 percent to 30 percent of your total credit line.

Need help getting your credit in top shape before you start your home search? Contact me and I'll put you in touch with a lender who will pre-qualify you for a mortgage.

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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