Bad Credit Home Loan

Fix your credit – Get approved for a loan!

In today’s world, credit scores are more important than ever. Without a good credit score, it’s virtually impossible to attain a house, car or anything that requires long-term repayment. The good news is, while a good credit score is crucial, a bad score can get fixed more quickly than you might think. Here are some good credit tips for shaping up your credit score as you prepare to purchase a house. Improve and Get Approved

The Big Picture

Before you can repair credit, you have to understand exactly what you’re repairing. For most people, this means fixing a spotty payment history and a high debt-to-credit-limit ratio. These two factors comprise 65 percent of your FICO score, with payment history being a slightly more important factor.

Credit Report Review

Your first step in the credit repair process is pulling your credit report and looking for errors. An estimated 80 percent of credit reports have errors, and a quarter of these errors can impact your ability to get a loan. It’s important to take note of any inaccurate information, particularly late payments that weren’t truly late. Disputing these errors and getting them removed will improve your credit score significantly.

Reducing Debt

When applying for a mortgage, the bank wants to assess your debt management skills. Carrying large credit card balances isn’t the way to show that you’re a responsible money manager. Get your balances as low as possible before beginning the mortgage application process. You’ll want to have card balances no higher than 30 percent of your credit limits.

Managing Inquiries

Every time you apply for credit, an inquiry is noted on your credit report. This normally isn’t a big deal, and counts for just 10 percent of your FICO score. That said, too many inquiries in a short period of time makes you look like you’re desperate for cash, and it might turn a bank off from lending to you. Make sure you have as few inquiries as possible as you prepare to buy a home.

Why Credit Scores Matter

You might be able to get a mortgage with a credit score of 660, but you won’t get as good a rate as someone with a score of 740. That difference could add up to thousands of dollars in finance charges over the life of the mortgage. It’s in your best interest to get your credit score in the best shape possible before you apply for a mortgage. The higher the score, the less you’ll end up paying for the house of your dreams. For additional information on how to repair your credit, please contact our office at 617-265-7900 or request a free consultation below.

Fix Medical Collections – Key Credit Blog

A medical tragedy is the single cause of bankruptcy in the united states. It can seem very overwhelming to try and repair your credit scores after this occurs. Over 60% of bankruptcies are due to medical debt. It can take time and patience to recover financially, but, it is possible.

How to fix medical collections

Many people wind up paying more for credit or being unable to get at loan because of erroneous medical billing. Many of our client will ask us; “How do I repair credit after medical debt”. There are some very simple and practical steps that can be taken. Have creditors verify all debts that show up on your report. And, check over any medical bills you receive to ensure that you haven’t been charged for services you did not receive. If you have declared bankruptcy, check to see if all debts that were discharged are removed from your report.

Make Payment Arrangements

If you have medical debts that have been sold to collection agencies, you may be able to settle. Collection agencies pay pennies on the dollar, and are often happy with less than the full bill amount. A credit repair company can negotiate on your behalf if you are not comfortable with the process.

Start Building New Credit

To balance any dings on your credit, start adding new, positive entries to your report through both revolving and installment loans. Each helps improve your credit health in different ways.

Apply for a new credit card and keeping a low utilization ratio is the tick! You may need to use a secured card at first. We recommend charging one recurring expense such as a utility bill or a health club membership, and paying it off in full each month. For the highest benefit, only about 10 to 30 percent of your available credit should be used at any time, since low utilization bumps up your score.

A new installment loan, such as a car payment, can also help build credit, as it will show a good record of payment on time. Car loans are a good option because they are short term and easy to refinance as your credit improves. They are also easier to get than other types of credit. Just make sure that you calculate both the cost of the loan and the cost of insurance when figuring out your monthly payments; most lenders will require that you carry a comprehensive insurance policy and coverage until the mortgage is paid off.

It May Soon Be Easier to Recover

The Medical Debt Responsibility Act has been working its way through Congress, and could be passed in the next session. The bill has a few requirements that will help improve the credit scores of people with medical debt. Patients would have 120 days to pay before a delinquent debt was reported. Positive transactions would be included in credit records. And, the bill requires that paid medical debt be removed from credit scores 45 days after payment, no matter how long it took for the bill to be paid. While the bill has not yet passed, VantageScore recently announced that paid medical debts would no longer be included in their scores.

For more information on how to repair credit after a medical debt has wreaked havoc on your report contact our team at 617-265-7900.