How long does it take to improve your credit score? We're going to talk about
it right now! How long does it take to improve your credit score? If you're
thinking of buying a home in the next three, four, even seven years it's not too
early! I'm Susan Thetford with Parks Properties
and I'm here with my friend Brandon of Legacy Home Loans and we're going to
talk about the things that he sees daily in his work to help people improve their
credit score and get them in shape to buy a home. So Brandon, thank you!
So here's the first thing I want to ask...even if somebody's not
planning on buying a home this year, why do they even need to be concerned with
their credit score? Right, so for most mortgage programs, a credit score is
required and most of them have a minimum credit score that you need to meet in
order to qualify. FHA does have an option that you you can have a no score and you
can do non-traditional lines of credit, but we'll get into that one later; but,
it's a little bit more difficult to qualify and not as ideal as having a
score. So, for most mortgage programs like I said especially -conventional loans
which is probably your target loan program that you hope to hope to achieve-
you need at least a minimum credit score. So, it's not gonna ---we're Nashvillians
and it's not gonna make Dave Ramsey happy--- but truly, if you want to get the
optimal score and the optimal loan at the best rate, a credit value, a credit
record, is necessary. Loan underwriters require the credit history and credit score and
the higher your score is it helps on both.
If you put less than 20% down on conventional loans, it drastically helps
decrease your mortgage insurance the higher your score is. And, there are
differences in the credit rating companies- like what you would go for
credit rating to buy furniture is different than the home ratings, right?
Right, auto loans or credit karma the FICO scores that we get as mortgage
lenders across the board uses the same scoring model but Credit Karma and
other things of that nature use different scoring models so a lot of
times people come to me and they've seen their credit score
somewhere. Say it's in the high 700s and then when we pull it it's actually
possibly lower than that and not accurate from what they were expecting...
So it's better to have us pull it to verify that the FICO scores that we
see as lenders are you know what you are aware that you have and then what we're
gonna use for a loan- all the more reason to go ahead and start talking to someone
like you first to really know what the whole picture is like! So, let's assume
somebody knows, or they think they really might have some issues they really might
have some problems on their credit- should they go to a credit consolidation
company? Should they go to her somebody who is a credit professional or come to
somebody like you first who was in this business? I would suggest coming to
someone like me first because we deal with this everyday. A secure place every
day- there's no cost, there's really no downside to trying to get pre-approved
and having your credit checked by a lender because then we're able to see what
scores would be used by a lender obviously and then all of the debts and
monthly payments and your credit scores that come up when we pull the when we
pull the credit report and then possibly things that you're not even aware of that
are there -such as a medical collection or something like that -we can see
and then, and because we deal with it so much we can give you some advice and let
you make sure you're aware of what's there.
And help you through it. So, what are some of the common problems what are some of
the common issues that you see that most people may not be aware of? Right, the
most common thing that people aren't aware of are medical collections. So,
sometimes it will get reported and it may not even come up on Credit Karma and
I can't tell you how many times I see a medical collection for $20 and they
don't know that it's even there and it's bringing their score down 50, 60, 70
points! Wow ! And a lot of times you can, you know, pay that medical claim have
them remove it from your credit report and it'll go away and your score will
come right back up; so that's the most common thing I see that people aren't
aware of-- that's a big difference! So, it's really not even the amount of debt
that's not paid yet, it's it's just the fact that there isn't just because
there's a collection there, gee. That's a big factor and then I often see 30-day
late payments that are there that could have been a miscommunication from --
address change. Sometimes you can get those corrected as well.
Got it ,and you said something else if... you pay off something, what is to make
sure...? Right, so if you have a collection, just paying it doesn't necessarily help
your score right away. If you're going to pay it, I would take a step further
and you might have to go to a supervisor of the collection agency but if you're
going to pay that and make them agree that they're gonna completely remove
from the credit report also. and give you what's called a "letter of deletion" that
will that will prove that they're gonna take it off because once it's paid you
can still stay there with a zero balance and still show up. but , if you get them to
completely remove, it it's almost like it never happened and then your score goes
back to what it would have been without the collection. So they may well take a
payment in full or even a payment lesser payment but still get in writing from
them that once you make that payment they will also remove it. It's not just
no or low balance or no balance... you want them to remove it completely when
they go on so it's all kind of off the record. So our premise in this quote in
this video is how long does it take to improve the credit score ...and really
the answer is not what anybody ever wants to hear- it it's "case by case"
and sometimes it can be a longer timeframe than you hoped for, or somehow you'd be
very quick. I've seen the medical collections removed, and then your rating
comes up within a few days; but it is on a case by case basis. That's why it's
good to talk and plan ahead. You know say a year from buying so you can see what's
on the reporting. You have time to deal with it, time and knowing what you're
dealing with -and there's no" black and white" kind of answer to it. So what are
some, just give us three quick tips that you might have for someone who was
either wanting to make sure they have good credit or keeping it good? Right, so
one thing that most people aren't aware of is keeping low balances on credit
cards. So if you have a credit card that has say a $5,000 max and you're at $4500
that's going to bring your score down. some compared to if you have a pocket
some action you have a $1000 balance so just the simple fact of, let's
say your credit score's at 730 which is really good credit if you have the
ability to pay some of those cards down you can get that 730 up you know 20, 30,
40 points and when you have mortgage insurance, like I said, that can just save
you a lot of money on a monthly payment. just that little bit of what was a good
score can become a great score by lowering those balances right the other
thing is there's a lot of credit companies and tailors one for instance I
see certain credit reports that maybe somebody had a 30-day late payment and
they're one of the credit card companies that will a lot of times if you have a
good good clean history don't give you a one time forgiveness on that 30-day late
so it's always good to check with the creditor and you might have to call a
few different times I've talked to a few hundred people but it's worth it to see
if you can get that 30-day late forgiven and if they remove that I mean if it's a
recent 30 day late that can be 50 points on your credit that's really valuable
valuable phone calls absolutely valuable phone calls so the quick tips keep your
credit card balances is about 25 percent of the max use them don't have them at
zero balance and that one surprised me actually that one really surprised me
but they show a history of being able to maintain credit and low balances and
make your payments on time and all of that loops you're trying to show the
ability that you can have money but you don't spend it right and you spend it
wisely I Mexican that makes good sense well if someone has more questions for
you and and this is something that Brandon does on a daily basis and
helping people get ready to buy and as you say two years four years from now or
ready to buy in the next six months in starting always with a professional like
Brandon getting the loan but even way before that getting yourself in healthy
financial spent but to be able to get that loan is super important I'm gonna
put all of your information down in the in the cards but tell people here how I
can reach you yes Brandon Carter with legacy home loans and my email address
is Brandon at my lhl comm and my cell phone number is six one five three nine
zero six nine four two and don't be intimidated credit is what it is it
doesn't mean anything positive or negative we just got to work on until it
gets where it needs to be and we do it every day if you're an adult you got it
whether you like it or not it just goes with the territory right Thank You
Brandon this has been terrific and we're gonna do another one the next one we
need to talk about is that option that if you have no credit history you don't
want a credit history there are options to buying a home and we're gonna talk
about that through the FHA program but let us know if you'd like to know more
about that talk to you soon you warm up yes you can warn their chef here Brandon
thing
For more infomation >> Rob Laurie - Why is superannuation so important? - Duration: 2:26. 
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