CREDIT ISSUES - WHAT YOU NEED TO KNOW
Credit Repair Advice FAQ 🏡🔧
What if I'm not eligible for a mortgage at the bank? 🤔
If you are not eligible for a mortgage at the bank, I want to ensure you have the tools you need to get there. If you don't qualify for a mortgage to purchase your new home, I will help customize a plan just for you. With the right mentoring, we can usually get you prepared for the purchase of your new home within 12-24 months. I can also assist with getting a prepaid credit card and other products that will help rebuild your credit and save for a down payment simultaneously.
What if I don't qualify at the bank for a regular mortgage? 🏦
If you don't qualify for a regular mortgage at the bank, but you have enough equity or a sufficient down payment, we may have a lender for you. We can sometimes arrange an alternative solution. An alternative solution will help you out of a situation now, with the idea of arranging a short-term (1-2 years) mortgage. During that term, we'll provide you with the tools needed to rebuild your credit and get you where you need to be when the mortgage term is up, so we can secure a better mortgage for you.
What about second mortgages? 🏘️
Second mortgages can sometimes come with higher rates and fees, so I always look at these as a short-term solution. The goal is to work together to rebuild your credit during this period.
How can you help me rebuild my credit? 💳💡
I have successfully partnered with some companies that can effectively help you rebuild your credit. They have programs to help you obtain a credit card and an investment loan, aiding in your credit repair journey.
Do's and Don'ts of Credit Repair ✅🚫
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Do have active trades: Mortgage lenders like to see that you have 2 active trades on your credit bureau report, ideally for a period of 2 years. If one is less than this, we can still work with it. If you only have 1 currently, I recommend applying for another one right away. Capital One is a good option, even if you already have one. Even a secured card would be sufficient.
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Do increase credit limits: Try to get your available credit limits to at least $2,000. Wait for a period, like 6 months, before asking for an increase to avoid unwanted credit inquiries that could impact your credit score.
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Don't exceed credit limits: Never let your cards go over the credit limit. This negatively impacts your credit score.
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Do maintain a low balance: When ready to apply for a mortgage, keep your balance-to-credit limit ratio no higher than 30%. Ensure this is taken care of 1 to 2 months prior to applying, as it takes time to reflect on the credit report.
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Don't allow multiple inquiries: Multiple inquiries into your credit report can lead lenders to believe you might be a “credit seeker” and impact your credit score.
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Do consult before major purchases: For major purchase decisions, contact me first. I can advise how new loans might impact your ability to qualify for a home.
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Do get your credit report: Contact Equifax to request a free copy of your credit report. This may uncover issues or incorrect reports to fix before purchasing a home.
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Equifax Free Report
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Equifax Online Dispute
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Do settle judgements or collections: It is important to settle any judgments or collections before applying for a mortgage, as lenders require these to be settled first.
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Do pay disputed accounts: If you have disputes with creditors, pay the accounts first, then dispute them to avoid negative reports on your credit bureau.
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Do consult before debt consolidation: Before speaking to anyone about debt consolidation or money mentoring, reach out to me for advice on the services offered.
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Don't co-sign for credit: Co-signing for credit can cause issues, such as potential missed payments and having to qualify with the extra debt as if it were your own.
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Do re-establish credit post-bankruptcy: For consumer proposals and bankruptcies, the general rule is 2 years of re-established credit following completion. Do not apply for credit prior to the end of the proposal or bankruptcy. Ensure at least 2 trades with a limit of $2,000 and no missed payments post-bankruptcy or consumer proposal.
Additional information, check out my blog: