How can you improve your credit score?

It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." (The exception to this is the "Rapid Rescore"...more on that below). But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible. 

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.

Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.

Rapid Rescore

Unlike credit restoration, which can take up to a month and cost $350 - $450, rapid rescoring may correct erroneous information or omissions on a credit report within 72 hours.  This rescoring could rescue a loan threatened by a borrower's low FICO score.

Rapid rescoring companies work directly with lenders and brokers, plus all three major credit bureaus.  The borrower provides written proof in the form of a letter from the creditor stating that the negative information on their credit report is erroneous.  The rescoring company forwards this proof to the credit bureaus.  If the bureaus concur that an error was made, the borrower's credit report will be updated is as little as 2 business days; although there is no guarantee this updating will automatically raise a FICO score the desired amount.

Credit restoration works to remove the entire negative history of the account, but can be both costly and time consuming.  Rapid rescoring neither deletes legitimately negative information from a borrower's credit report, nor settles items still in dispute with a creditor.  However, it can change the status of items like a collection account or charge-off to "paid", which satisfies the collection and may increase your FICO score a few points.

Please call me today for more information on how I can help improve your credit.