Credit Repair Tips

Before you can even consider purchasing a home, you have to make sure your credit score is in good standing. What do you do when it's not? Countless factors that play into calculating a score, so it's vital to understand the elements and ways to boost it.

In this video, Andrew the "credit ninja" joined Dan and Ryan to talk credit tips and tricks! 

Often times, people will start the process with a free online credit report. However, the scores from these websites tend to differ greatly from what a mortgage office might pull up. The common misconception is that there is different information coming from these sources. In reality, the information is largely the same! The biggest difference lies within the algorithm used to create the credit score. As Andrew explained, the algorithms change according to the risk factors. “A $10,000 credit card is much less risk than a $100,000-$300,000 mortgage loan,” he told us.

Another reason for differing scores has to do with honesty about credit. “People are more likely to talk about their sex life than their credit score,” Andrew said with a laugh. Knowing this, these free credit report companies will inflate your score to get you to talk about it more. You might be more vocal about having a high score than you would with a low one. Additionally, a high score would allow you to apply for a credit card. These companies boost the credit score to increase their chances of the clients applying for debt or missing payments, which gives them monthly payments. 


“They don’t worry about the importance of paying on time.”


Andrew went on to talk about boosting credit scores. Missed payments are actually one of the biggest contributors to a lower score! “It’s not as obvious as you would think,” Andrew told us. Andrew once did business with an agent that missed a payment four years prior that cost him 42 points! Unfortunately, missed payments will stay on your credit record for a full seven years. One option for fixing this issue would be to close the active credit card with the late payment. However, this would wipe your entire credit history, meaning you have to start over to build up credit. For this reason, Andrew and Dan do not recommend this method. The best course of action is to ensure every payment is made on time. “[People] don’t worry about the importance of paying on time,” Dan added. 

Even if you don’t know what your credit situation is, people like Dan and Andrew can help levitate the issues. As Andrew said, it takes one bite at a time to eat an elephant. The best place to start is with one of our experienced professionals. For a better understanding of credit and ways to boost your score, call Motto Mortgage Advisors today!