5 Of The 11 Worst Mistakes You Can Ever Make On Your Credit Report!
Your credit can either work for you or against you when buying a home. Knowing your clients’ credit score is vital in real estate so that you know where they stand with the whole process.
Relaying this information in your real estate blog content can help inform your future clients and help you stay current on today’s credit trends.
Check out our guest blogger, Corey Goldstein’s most recent article on the worst mistakes you can make on your credit report.
I’m interested in the reality of things. Don’t feed me half truths or incomplete information. if it’s great I want to know all about if, it’s not so great, I want to know that too…and I think you want the same thing.
I find it fascinating that the United States economy is based on a financial “scoring system” that no one can fully explain and somehow we’re all “ok with it”. Have we all gone crazy to allow outside third parties to have such an influence over our lives and we just go along with it?
Well today, I want to share a few things with you that your Loan Officer, FICO nor the Credit Bureau’s will ever disclose. I’m committed that you reclaim your power and own the most important financial tool you have, your credit.
Right off that bat…the items that really impact your credit scores are the ones that have been reported most recently. I’m talking about accounts that have late “markers” (meaning: 30, 60, 90 day late payments or collections listed on your report) within the past 24 months.
Older accounts have an impact too, although as time goes on, they have lesser impact and eventually they are meaningless (collection agencies never tell you this when they call you on old accounts…). Mortgage late payments are especially harmful and I would look back 24-30 months to resolve these. (I’m NOT saying to call you creditors!)
Other issues that negatively impact your credit scores are:
Paying a collection – Yes it is true.
If you pay a collection, expect your scores to drop on average 30-40 points. Why is this the case? Well, have you ever heard the term “name , rank and serial number?”. That’s all you ever want to provide a creditor. Unfortunately, people call their creditors all the time and they answer questions and provide information that HURTS them. In the meantime their creditor is gathering information to use against them. Paying creditors CONFIRMS derogatory information and this is what drops the score. You never want to confirm ANYTHING.
Reported late payments after a Bankruptcy.
How the bureaus rate late payments after BK, is equivalent to a person jumping off the edge of a boat with an anchor attached to their leg. The assumption here is that nothing was learned and you are being severely penalized.
High debt load versus the high credit limit.
Knowing what your limits are and keeping them at 30% or less of your high credit limit, can often raise a score. A credit card with a credit limit of $5000 and $4800 of debt against it = 96%. Debt/high credit ratio. With these percentages, it appears as though you are a far higher credit risk than you actually are. Either pay the card down, balance transfer to another card or raise the card limits by asking for a “rate review”.
You once used some Counseling Agency, like CCC.
These companies typically pay their clients bills late and as a result, you get higher fees and charges, plus late added payment markers reported to your report. From a credit perspective, it’s viewed as worse than Bankruptcy.
A Classic Mortgage Bank Tactic: More lates recorded by the creditor than are being reported.
This is a dangerous one!
Often times, creditors will stop reporting lates UNTIL you dispute something (send in a letter requesting removal based on some “fact”). These require finesse to resolve. Many ineffective credit repair companies (disputing companies) use this approach and often times this method does not work. In fact, the negative information is now considered VERIFIED and permanent.
For more helpful tips or any questions regarding your credit and how to repair it feel free to visit http://www.fixmyreport.com/