Did you reach out to a real estate agent and get excited to buy your first house...
…only to find out your credit had issues? Don’t be embarrassed; this happens to a lot of people. Don’t let a little oopsy-daisy spoil your dream. Keep reading for a few tips that will have you in a home within a year!
Here are a couple of tips you can use to improve your credit:
Tip #1: One Excellent Way to Establish Your Credit
You will need to get a credit card if you do not have one already. You should buy a new car if you haven’t already. Pay those debts for a minimum of six months. Your credit score will go up rapidly. On your credit cards, never let your balance go above 30% of your credit limit and always pay significantly more than the minimum payment. That is called paying better than good. So if your minimum payment is $30, pay $300 or just pay off the card. I suggest you apply at Capital One. They have good cards for folks with your needs.
As for the car. Car loans are easy to get. You can lease a car with Hyundai (Elantra) for as little as $129 per month. That is less than some folks cell phone bill and cars are handy even if it spends most of the time parked. Cars are a loan, so they improve your credit rapidly.
If you follow this advice, you could add two new credit lines to your profile. One revolving account, and one installment loan. The two of these credit lines will rapidly change your credit score. I hope this helps. 🙂
Tip #2: How to Handle a Charge-Off
Get ahold of the creditor that has possession of the charge-off. You can get this information from the lender that pulled your credit or order a credit report. Your lender might be more accurate, and they should offer you assistance. When you call the creditor, explain to them you had no idea this was on your credit until you went to purchase your first home. Then let them know you are willing to pay off the charge in full as long as they (FIRST) send you a letter of intention to completely remove the charge-off and all associated negative remarks from your credit. They might give you a little push back, but at the end of the day they want your money.
Do not listen to any threats. Collection agencies are liars and will say anything they can to get you to pay. I’m not saying this will happen to you, but I’ve heard of it happening. Just disregard any threat and restate your intentions and what you’re ready to do.
Here’s a script for what you can say to the creditor: “I will pay you in full, but first I need a letter from your company on letter head stating your intention to clear my credit of all derogatory remarks associated with this charge off and your company. Once I receive that letter via email or mail, I will call you back and pay off the debt.”