With the current credit crunch on mortgage applications right now, it is imperative that borrowers or applicants do as much as they can to improve their credit rating.
A poor credit score WILL stop you from getting into that home you want so badly.
So where do you start right? First things first, you don't know how to get there if you don't know where you're at! Apply for a mortgage or order your credit report on one of those "free" services that allows you to see your report.
Better yet, get your report directly from the 3 bureaus.
You are entitled to one free credit report every 12 months to check for inaccuracies due to identity theft or fraud, or if you are unemployed and plan on looking for a job within the next 60 days.
Both areas, by definition, are pretty flexible, so go get your report by filling out this form and sending it in.
Once you get the report back, inspect it.
Are there any late payments? Collections? Odds are you will find some inaccuracies on your report.
As a mortgage professional, almost every report I see has at least one disputable item.
That one item could make the difference between you purchasing your dream home or not.
11 points may not mean a lot to you right now, but that small difference could save you thousands of dollars in the long run.
You want the best deal possible don't you? Disputing items is easy! Disputing items quickly is almost impossible.
Expect 30-60 day turnaround times for the credit bureau to correct the information on your report.
This is exactly the reason you need to be doing this before you try to put a property under contract.
To dispute an item, you simply need to write a letter to one of the 3 bureaus and attach supporting documents.
The bureau will attempt to contact the company or firm who first reported the item you are disputing.
Those companies then have 30 days to respond to the credit bureau with their explanation and supporting documents.
Now pay attention to this next item.
Often times, as in mortgage lenders who are no longer in business or inexperienced debt collectors, these companies and firms do not formally respond.
It's crazy but it's true.
And if they do not respond, odds are that the item in dispute will be deleted from your credit report.
So that old phone bill that you never paid back in college, well maybe it won't haunt you forever.
Most collectors just want their money.
If the debt has been settled or paid off, what good does it do them to keep accurate data on you? They don't care about your credit score, not after they're paid at least.
I don't recommend trying to dispute items that you know are factual and accurate.
Although the strategy may work, it's better to focus on items that you can prove erroneous.
It is completely up to you how you use this information.