Copyright 2005 Frank Bruno
It’s never easy to talk about credit. Not with friends, not with
family, not online, and, most of all, not with myself. Yes, I
let a monthly payment go by here and there. I’ve maxed out my
share of credit cards. I’ve bought cars that I really couldn’t
afford. I ate out. A lot. At expensive restaurants. And I always
ordered the lobster. I always knew, in the back of my head, that
I was teetering on the brink of credit destruction. Yet I
couldn’t bring myself to admit that my credit was going
downhill. I continued applying for credit cards anyway. I didn’t
want to run them up, honestly. It just happened.
One day, reality gave me a swift kick in the rear. I grew weary
of renting, so I decided to pursue the proverbial American Dream
and purchase a home. I sort of knew that my credit was troubled,
but I kidded myself into thinking that it couldn’t be that bad.
I went to a mortgage company to finance my dream. When I got
there, I filled out an application, and they pulled my credit
report. I truly was not prepared for what the loan officer said
to me next. “I’m sorry, sir,” he said, “your application has
been declined.” I was absolutely stunned and numb. I could not
believe my ears. My dreams were decimated in mere seconds. I
left the office so dumbfounded that I didn’t even remember the
drive home. I got back to the apartment and I torched every
Homes For Sale magazine in the fireplace.
From that very moment, I resolved to clean up my act. Not
knowing much about credit, I had to swallow the last ounce of
pride I had and called up the loan officer I met with. They have
general guidelines for approving mortgage loans, he explained.
One of the major factors that go into an approval is your credit
score. Quite simply, the higher your credit scores, the better
your chances of being approved. What’s more, the higher your
score, the better the terms of your mortgage; that is, better
interest rates, better payments, and lower down payments to name
but a few. In my particular case, my score was low. Their
minimum requirement is a score of 620. My score was 604.
The only way that I could get an approval for a home loan, he
said, was to raise my credit scores. The good news, he said, was
that he could refer me to their sister company. They specialized
in approving mortgages for people with challenged credit. In
fact, they have been known to approve loans for people with
scores as low as 500!
With a glimmer of hope, I contacted the company he spoke of,
known as a “subprime lender.” Sure enough, they had good news
for me. “We received your application from our sister company,
and I’m happy to tell you that we are able to approve you for a
mortgage!” Something didn’t feel quite right, though, so I asked
about the terms of the mortgage he approved. It turned out that
their loan was going to cost me a whopping $7896.00 in
additional interest for the first year, which amounted to
roughly an extra $666.00 per month! That was about twice what I
used to pay on my car. Think about that…because my scores were
so low, I had to pay the equivalent of two car payments in order
to purchase a house. Heck, I could’ve bought a Mercedes with
that kind of money, although I probably wouldn’t have been
approved for a car loan anyway. Not only would the extra
interest have a disastrous impact on my bank account, it would
price me completely out of my dream home – a terrifying thought
indeed.
While I celebrated the approval, I shuddered at the terms. I
begrudgingly went forward with the lending process. Although I
loathed that extra interest, I hated the thought of not owning a
home even more. In the meantime, I resolved to find another way.
Either I could sign their loan and pay almost $8000 extra just
in interest, or I could try again with the first company after
raising my score. To me, the choice was clear. At the time,
there wasn’t much I could afford anyway, let alone two cars’
worth of payments. I resolved not to pay any more than was
absolutely necessary to purchase the house. I had to repair my
credit! With no money in the bank and no room on my credit
cards, I simply could not fathom spending $400-$500 on a credit
repair agency. My creativity had to exceed my financial means
for me to get the results I needed.
I was able to obtain a “tri-merge” credit report and found my
aggregate scores were 604, 576, and 606. A tri-merge refers to a
single credit report that contains information, including
scores, from the three major credit reporting bureaus; namely,
Experian (formerly TRW), Equifax, and TransUnion. Each has a
unique formula for scoring your credit. Many mortgage companies
will use a tri-merge report to determine whether your
creditworthiness deserves an approval. Depending on the mortgage
company, they will consider one of your three scores and go from
there. In my case, the loan officer advised that I needed to get
one of the numbers up to at least 620.
Throughout the course of my research, I found a lot of resources
that explained the credit repair process. One of the most common
methods is to write letters to the credit bureaus, disputing the
erroneous information on my credit report that caused my scores
to decline. In fact, the credit bureaus themselves explain this
process. Basically, you scour your report and locate invalid
entries, such as an incorrect credit limit, or even an entry
that’s not yours. Then, you write a letter to the credit bureau
explaining that the information is wrong and ask for it to be
removed. If they manage to confirm that the entries are correct,
then it stays on the report. If they can’t confirm it, off it
goes. Make no mistake; this technique is quite effective if done
correctly. The problem is credit bureaus, by law, have thirty
days to investigate the information. That doesn’t even include
the time it takes to mail my dispute, and for them to mail an
answer back letting me know what happened. At best, it would
take about 40 days before I knew anything. I simply could not
wait that long. Plus, there was no guarantee that they would
remove the information anyway.
Undaunted, I continued my quest to boost my credit scores
quickly and inexpensively. Time was running out, however. The
closing for the subprime mortgage was only days away. My
persistence was rewarded when I managed to discover little-known
methods that I utilized to increase my score. As a matter of
fact, my Equifax score went from 604 to 644 in only 24 hours!
Like a thermometer next to a blue-hot flame, my score shot up 40
points, literally, overnight. I went back to my loan officer,
and he was flabbergasted. Never had he seen anyone raise their
credit scores so quickly and dramatically. He put my application
back through. Miraculously, I was approved!
I saved myself hundreds of dollars a month, and thousands of
dollars a year by being able to Raise My Credit Scores. The best
part is that, because of the techniques I used, it only took a
matter of days and not months like the credit bureaus would have
you believe. There’s an adage that says “Cash is king.” These
days, it’s more accurate to say that “Credit is king.” Your
credit scores have so much impact on your life that it would be
catastrophic to take them lightly. By raising your credit score,
you can experience the same kinds of savings that I achieved.
You’ll be able to better afford that dream home or dream car,
and you’ll realize the benefits for years and years to come.
Frank Bruno
http://www.articlesbase.com/finance-articles/how-i-raised-my-credit-score-40-points-in-24hrs-and-saved-658-3186.html
http://www.highrisecreditconsulting.com
http://www.AttractiveCredit.com or call 800-605-9085 for FREE consultation.
