Insight Loans is the industry leader in Bruised Credit Mortgages going down to a 560 credit score. We have helped thousands of clients get a mortgage when they were recently turned down because of credit issues. As a result, we are experts in credit score strategies that work and stand the test of time. If the below strategies are followed, the credit scores will increase. How quickly they increase will be determined by what strategies were incorporated. Some take longer than others.
- Pay all bills on time. Do NOT incur 30 days late pays within the last 12 months. Late payments on a credit report will impact the credit score substantially for 12 months. If you have recent late pays, typically only time elapsing will increase the credit scores.
- Keep all credit card balances under 50% of their credit limit. Maxed out credit cards are the most common reason people have low credit scores. It is easily fixed by paying the credit card balances down and keeping them down below 50%. Paying them down and then charging them back up does NOT help.
- Maintain at least 3 active trade lines on your credit report. If you do not have at least 3 accounts that you pay on monthly – you are hurting your credit scores. Many people think having less credit is a good thing, but it actually isn’t if you have less than 3 accounts. The 3 accounts must be accounts that report to the credit bureaus so rent, car insurance and even cell phone bills won’t help. The best way to overcome this problem is to take out “Secured Credit Cards”. Secured credit cards have small credit limits ($200-400) and very high interest rates (+20%), but are very easy to get. Most Secured Credit Card companies won’t even run your credit report before issuing you one. We recommend charging 1 tank of gas and paying it off every month. Do not charge the card above 50% of the limit as #2 above mentions.
- Add yourself to a family members credit card as an “Authorized User”. This is only necessary if you don’t have much credit history. We do not recommend doing this unless you are struggling to create a credit history. Keep in mind, if the family member makes a late payment or maxes out the card, it will actually hurt your credit scores since it will be reporting on your credit.
- Limit inquiries from “Unsecured Creditors” such as credit card companies. If you go out and apply for several credit cards simultaneously your scores will drop. That is a sign that you are having financial difficulty. Generally speaking, this is NOT true for inquiries from “Secured Creditors” such as a mortgage or car loan.
- Pay off any outstanding Judgments or Tax Liens. Once it is paid, send a “Paid In Full” letter (from the court or tax man) to the 3 credit bureaus to ensure they update the account status to “paid”.
- Do NOT use a Credit Repair Company as they will “dispute” all of your accounts. Credit Repair companies artificially increase your credit scores by disputing all derogatory accounts. Once the account is disputed the account won’t count against your credit score. The problem is, you cannot have disputed accounts when getting a mortgage. This creates a major headache removing all the disputes.
- Do NOT blindly payoff derogatory accounts such as Collection Accounts or Charge Off Accounts. Believe it or not, most Collection Accounts and Charge Off accounts do NOT need to be paid. Sometimes paying the account off will decrease your credit scores because of the new activity on the derogatory account. This is especially true of old derogatory accounts that haven’t had any activity for years. Ask your Insight Loans Rep for analysis on what if anything should be paid.
- Do not co-sign for other people’s loans. If they make a late payment or max out the credit card it will negatively affect your credit score even though it wasn’t your fault.
For a no obligation consultation, call an Insight Loans Rep today at 877-850-LOAN or firstname.lastname@example.org. We will work with you until you are able to qualify for a mortgage. Insight Loans closes loans down to a 560 credit score with 10% down and 580 credit score with only 3.5% down.