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Credit Boost and Repair
I have tried very hard in rebuilding my credit and boosting my credit scores since I had to file bankruptcy in November 2019. I had no choice but to file Chapter 7 Bankruptcy because the judgment creditors from my loss from the 2008 financial crisis were renewing the judgments. I was discharged of the Chapter 7 Bankruptcy in April 2020. The minute I got discharged I started opening Secured credit cards, credit rebuilder accounts, and purchased a newer SUV one year after my Chapter 7 Bankruptcy. I got my credit scores up to 700 in less than one year after my discharge of the bankruptcy. I am now able to get u Secured credit cards and personal loans. In this thread I will share how I have rebuilt my credit and increased my credit scores. I will outline line item per line litem and detail how maxed out credit cards can plummet your credit scores.
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2 Replies
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How do I go about rebuilding my credit and increasing my credit score to qualify and get pre-approved for a mortgage at the lowest possible mortgage rates? Can you please give me specific details on the steps of rebuilding my credit and boosting my credit scores.
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It’s important to rebuild your credit and increase your credit score so that you can qualify for a mortgage at the lowest possible rates. Here are some steps to take:
Review Your Credit Reports And Scores
Get Your Credit Reports: Order free credit reports from all three major credit bureaus (Experian, TransUnion, and Equifax) at AnnualCreditReport.com.
Look For Mistakes: Ensure that there are no errors on your credit report by checking for inaccurate personal information, accounts that don’t belong to you, or inaccurate account statuses.
Dispute Errors: If any mistakes are found, dispute them with the credit bureau(s). Include supporting documentation along with your claim. Generally, the bureau has 30 days to investigate and respond.
Pay Bills On Time
Payment History: Payment history is responsible for 35% of your credit score. Pay all bills like loans, utilities, and credit cards on time. Use reminders or automatic payments if necessary to stay current.
Catch Up On Late Payments: Bring any accounts that have fallen behind up-to-date as quickly as possible. The longer an account is paid on time after being late, the better it looks on a credit report.
Lower Your Debt
Credit Utilization Ratio: This ratio (how much of your available credit is being used) accounts for 30% of your score. Try to keep this number below 30%. Paying off balances could give scores a huge lift.
Pay Off High-Interest Debts First: Prioritize paying down high-interest debts before lower-interest ones; it’s called the debt avalanche method which saves money in interest paid over time too.
Avoid New Credit Applications
Hard Inquiries: Each time someone applies for new credit it results in a hard inquiry which can temporarily ding their FICO Score. Hold off on applying until yours improves.
Maintain Current Accounts: Even if they’re only used occasionally, keep existing lines open because closing them would shrink total credit limits which hurts utilization ratios.
Broaden Your Credit Mix
Types of Credit: Such as credit cards, installment loans, mortgages. Having a mix can boost scores; however, only take on what you need and know you can handle responsibly.
Monitor Your Credit Frequently
Use Credit Monitoring Services: There are many free options through banks or credit card companies that will watch for changes to your score/report automatically.
Track Progress: Keep tabs on how things are progressing with each bureau’s version of events so there aren’t any surprises down the road.
Consider Secured Cards Or Credit-Builder Loans
Secured Cards: If regular versions won’t approve someone then try secured ones where they’ll have to put up a deposit equaling their new limit typically.
Credit-Builder Loans: Some lenders offer these specifically for people trying to establish/re-establish credit. The money is held in an account while payments are made and once paid off it’s released to them.
Seek Professional Assistance When Necessary
Credit Counseling: Nonprofit organizations may provide guidance on setting up plans for bettering one’s FICO Score. Follow all steps mentioned here and you will soon be able to restore your credit so that you can qualify easily for a mortgage with good terms. It is not fast or easy but it works over time if done consistently