Credit Improvement vs. Credit Repair – PART I

Credit improvement verses credit repair for the most part, in a month or two, can make a huge difference in your credit score, but remember it is not always as easy as it looks and its best to get the opinion of someone knowledgeable in the business of credit or credit improvement.

Think of it as something like your high school report card, or earlier if you can remember that far back. Maybe you’re an A student… you get your bills and pay them on time.  Then, this article may not be for you.  But, the average person is the “C”, “D” and “F” student. More prevalent are the ones that make late payments, receive collections calls, have outstanding medical or phone bills or the unpaid cable or satellite dish bill from your last move, etc, etc. 

In today’s world most decisions to extend credit are determined by credit score.  Negative items from the past can bring your credit score down to a level where you are being charged higher interest rates or are being denied for credit cards, car loans or a mortgage to purchase a new home. It is suggested to leave the old items alone with exception to the new FHA guidelines that we can review with you later one on one. Paying an old collection makes it a new paid collection. It’s still a negative item and although it’s paid, it is now “renewed”. The answer is to obtain new positive information on your credit report, showing on time payments, the “A’s'” needed to bring the score up.

Credit score is an “average” of sorts, weighting new positive information against the old negative information (and getting older, counting less, hence the suggestion to leave it alone).

This is a bit of an over simplification as scoring also weights the number of accounts, the depth or age of your credit history, and the diversity of credit account types of Mortgage, Installment and Revolving debt.

Call today for the minor cost of the credit report (or supply yours).  One of our credit counselors will help you better understand the process and direct you to the most affordable route specific to your needs, budget and situation.  Start the process now.  Improve your credit and make your home purchase possible- Kara Holleran 239-246-6000.

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Posted on April 16, 2012, in Finance and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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