Monday, December 1, 2014

How to Repair Your Credit Score

Need a better credit score? Midwest Equity Mortgage, LLC will walk you through some pertinent steps. Fact: Poor credit history and a bad credit score can have a serious impact of your life. No one wants bad credit. Sometimes mistakes happen. Sometimes factors like medical bills, job loss and tragedy influence our financial profile in ways we never could have predicted. Bad credit can happen to anyone.

But now what? If you’re wondering how to repair your credit score, you are not alone. The widespread decline in credit scores has been one of the side effects of the recession but this doesn’t mean that you can’t pro-actively take the steps to start repairing your credit.

Factors that Damage Credit

First let’s clarify what can lower your credit score and damage your credit profile.
  • Excessive Debt: If your credit cards are maxed and you have several loans, your debt profile is probably contributing to your low score
  • Late Payments: The credit bureaus note any 30, 60, 90 & 120 day payment lates. It is essential that you pay your bills on time.
  • Dormant Credit: A dormant credit card is an account that has infrequent or no use. In some cases, if an account has no activity for a period of time, issuers may close the account which revokes future charging privileges. Dormant accounts may not have additional debt but they also don’t help your credit score.
  • Collections: If you fail to make a payment or pay off your account – the creditor may send your account to collections. This severely affects your score. Make sure to work closely with your mortgage or credit professional regarding paying off collections. Note: Collections on federal loans such as student loans will prevent you from getting financing from most (if not all) lenders.
Save time and money with a SMARTER way to shop for your next home with our Home Shopper Worksheet. Get your copy here »

Get Familiar with Your Credit History

It’s time to take charge of your credit profile and the first step to doing this is by getting familiar with your credit profile. You are entitled to a free copy of your credit report from the following credit bureaus:
  • Experian
  • TransUnion
  • Equifax
Please note that many of the advertised credit reporting companies will charge you fees. The law entitles you to a free credit report so use a site like annualcreditreport.com. You will notice that you the actual credit score is not included in the report. This is because credit scores differ between different kinds of financing. For example: a credit score for an auto loan might differ from a mortgage loan. The score is not really what’s important here. Review your credit report for any errors and misinformation. It is your job to ensure your credit report is correct.

Start Establishing & Using Your Credit Wisely

If you don’t have any or enough credit – it’s time to get some. Apply for a secured credit card (usually requires a deposit) that reports to the credit bureaus mentioned above. Don’t apply for too many cards at once as this can harm your score but make sure you are managing at least 3 cards.

Once you have your credit cards or with the cards you currently have – start using them wisely. You should use your card regularly and pay off all or most of your bill every month to start showing that you can effectively manage your finances.

Key Take Away

We began this article with a harsh fact and now we’re going to end on another one: Repairing your credit takes time and discipline. Is it worth it? YES! Negative history will not go away overnight but you can do it and when you see that shining credit score at the end of the road, you’ll know just how powerful it really is. Good Luck!

If you have a mortgage AND a car loan, student loan or credit card debt - you can reduce your monthly costs with a SmartREFi™

Photo credit: Pixabay Royalty Free

Midwest Equity Mortgage, LLC

855-767-3434 | MidwestEquity.com
Now more than ever, you need to work with someone you can trust. Ask us about our A+ rating from the Better Business Bureau and our incredible complaint-free record and you will know: you have found your lender! Why are you still waiting for the “big bank” to call you back? Get in touch with someone who cares-TODAY!
More Posts
All Posts »
Latest Videos

Contact Us - 4 Ways to Get Started

Apply Online

Apply Online »

Privacy Secured. No Obligation.
No SSN# Required.
Call us toll-free

Call 855-767-3434

Call us toll-free and speak
to a live representative.
Email us

Email Us »

Email apps@midwestequity.com or directly to your loan specialist.
Find an Office

Find an Office »

We have 9 office locations across the United States.
  • Midwest Equity Mortgage, LLC In Oak Brook BBB Business Review
  • Mortgage Bankers Association
  • NMLS Consumer Access
  • Inc 5000 award
  • Equal Housing Opportunity
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Google Plus+
  • Follow us on YouTube
  • Follow us on LinkedIn
  • Follow us on Blogger
Proud Supporter Of
Pat Tillman Foundation