Before you apply for a mortgage to buy that dream house you’ve got your eye on, you have to make sure your credit score is up to par. “But, my credit is perfect! I never make late payments, I’ve never had any credit issues and I make plenty of money. I have no need to check my credit score and fix anything,” you’re thinking with a slightly holier-than-thou feeling (been there, done that, totally get it). Unfortunately, you do have to do that regardless how amazing your credit score is and how responsible you are with your credit.
People make mistakes. I was, earlier this year, reported deceased by one of the three major credit bureaus. I’m not; at least to my knowledge. We are all imperfect and we all make some serious mistakes, which is precisely why we have to be very careful with our credit. We might not do anything wrong or make any mistakes with it, but the people reporting our credit information and the people recording it might make a mistake. Those mistakes might mean the difference between buying that new home and being denied credit because of mistakes reported.
You do need to check your credit report prior to applying for a mortgage. It’s not an option; but it’s not that easy. Fortunately, you can even fix your credit score pretty quickly if you have some time and want to see your score increase in relatively little time. Here’s how to do that without actually putting forth much effort.
Dispute any mistakes
First and foremost, if there are mistakes on your report, you have to dispute them. Gather the evidence and the information you have, provide it to the credit bureau and wait for things to be fixed. There might be a few more things you have to do within this process, but it’s not something that’s entirely too much work and it’s usually resolved inside of 30 days.
Ask for goodwill
Did you know that some credit card issuers will issue you a goodwill adjustment? Let’s say that you have a late payment from three years ago that you just made a mistake with. You thought you mailed that payment and you found it six weeks afterward in the bottom of that handbag you traded out for a new one in a rush and missed grabbing that envelope. Now it’s been a while, you’ve never made any other late payments and you’ve been a stellar customer. Why not call the company and ask them if they will make a goodwill adjustment for you since you’ve been able to maintain a good standing with the company for so long? Many will do it if you simply ask and can prove that one mistake was really just an honest mistake and not a careless choice.
Check credit limits
Your one credit card might have a $20,000 limit on it and you might have $4,000 on that card. However, if the credit card company accidentally reported your limit to the credit bureaus as $10,000 by mistake, you’re now showing that you have more than 40% of your balance used up. Creditors want to see you keep your debt under 30% or so. It is according to your actually credit card limit, but card companies are notorious for accidentally reporting the incorrect limits to credit bureaus. Fortunately, this fix is a quick one that takes virtually no time at all to correct.
Dispute old accounts
Mistakes are one thing, but old accounts are another. It’s been eight years since the economy crashed in 2008. Negative credit items should have fallen off your credit report after 7 years. This means if you were one of the people effected by the economy and you let go your credit cards and other bills back in 2008, they should have fallen off your report by now. You should have no problem with those items. However, some might still be there.
Go ahead and ask the credit bureaus to get them off your account. Additionally, do yourself an even bigger favor and dispute some of the old negatives that are a few years old, too. Let’s say you have a charge-off with a credit card company that’s 5 years old. Dispute it. Chances are since it’s so old that the collection agency that has the collection account in their records will not bother to dispute it or even bother with it. If you have an account that has changed companies over the years, there’s a good chance that records have been lost, misplaced or even destroyed over time. They cannot dispute your dispute, and you can have those negative items removed from your credit report within 30 days if the collection agencies are not able to properly dispute those items in a timely manner.
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