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Need To Fix Your Credit Score?
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Hey guys. Jim Keaty here with Keaty Real Estate, and I’m super excited to introduce you to two of my friends from Rising Point Solutions, Carl and Allyson. When deciding to buy a house you want to come up with a strategic home buying strategy, and what you really need to be focusing on up front is what is your credit like
Not only what your credit is but where do you want to be to get the best rates? Carl and Allyson are here to help out with that. Tell us a little bit about your company and what you guys do.
Yeah. Rising Point Solutions. We’ve been in business for 15 years. We mainly work with builders, mortgage folks, realtors, and our goal is to help everybody who wants to be able to buy a home get into a home, and a lot of times it’s credit related. And so many people are afraid of what thier credit’s like, they’re afraid to even start the process. That’s why we’re here. There’s a light at the end of a tunnel. We want to help people get into a home.
Absolutely. And we’re talking to home buyers all the time, and you’re exactly right. Some people don’t even want to look at their credit because they think it’s bad, and a lot of time it’s really not as bad as they’re anticipating. What’s the first step when you want to find out … because we start planning months ahead of time before we’re going to start even looking at a house so we can see what price range we’re in. What do you guys suggest for the typical home buyer to start? When should they start looking at their credit?
I would say at least 90 to 120 days in advance. You want to see what’s on there. You want to have time to effect change if it needs it. Certainly if you know your credits bad and you’re going to need more work maybe even more time than that. But if you just … Because most people don’t really even know what their credit’s like. They haven’t looked at it in a while, or they’re afraid to rip the BAND-AID off and look at it. I’d say at least 90 to 120 days in advance. Get a copy of your credit report, review it for errors, make sure that everything’s the way it should be, and then think of seeing a mortgage partner or realtor and figure out if you’re ready. And if you’re not then that’s why we’re here. A
Allyson, at that point let’s say I do have some things that don’t look right on my credit report or maybe it five or six years ago. What can we do to improve our credit?
Sure. Your credit score, your credit profile is not just late pays, it’s where you stand with your balances right now. You can tweak things here and there. If you have enough credit open. It’s not just about how you paid your debt, it’s do you have enough debt open to generate a good score. Always starting there, seeing if you checked all the boxes, if you have enough credit open for sure.
Yeah. We take a holistic view of credit, and once we engage with somebody that needs help with their credit, Allyson’s going to sit down with them, go through their credit report top to bottom and talk about all the things that she just discussed. Are there errors that need to be fixed? Do you have enough open credit? Where are your balances? And if there’s some bad things that happened then we can help with that too. But you got to at least start down that path or nothing changes.
And then you start working with the consumer or the home buyer to fix their credit if there is things on there that might be old or that can be fixed. And how long that process take sometimes?
Well, on average probably about four to six months depending on what kind of challenges we have. You can do other things like pay your credit card balances down and open accounts and have significant change in about 60 to 90 days. If there are negative inaccurate information on your credit report, things that need to be addressed, then yeah you want to give yourself about four to six months minimum.
But it’s important to have an expert like you guys working on your credit because your credit report is so important. You don’t necessarily … Like you’ve told us and some of our clients don’t just get the balance to zero, leave a balance on your credit card, or don’t close that credit card because that can really effect your credit in a negative way. Is that right?
Yeah. Well, just think of credit like a game. It’s a big puzzle and you got to put all the pieces in the right places, and the way the credit scoring systems work with the bureaus is you got to have all these different boxes checked. And so you got to have enough credit, you got to be using your credit, your balances got to be in line, and just aligning everything the right way. And it’s not just about being qualified, it’s about having the very best credit possible so that you get the very best deal possible. Right?
Right. And I’m glad you brought that up because we want to make sure our clients not only can buy a house today, but when they go sell this house and buy another house they have the best credit so we can save them … you’re talking thousands and thousands of dollars. Maybe up to $15,000 to $30,000 over a life of a loan if you can get a lower interest rate. So it’s important not just to stop when you get a house, but to continue to work on your credit so five years down the road when you go to sell your house you really have excellent credit and you can then get the most for your money.
Right. And it’s not just in real estate. It’s auto insurance, home owner’s insurance, credit card rates, availability for everything, to help your family. I mean, it’s a lifestyle.
Cell phones too. They check credit for cell phones.
Everything nowadays. 50% of employers check credit. We’re in an era where you can buy a house with a very marginal credit score, but just because you can get a house doesn’t mean you have good credit. We want to help people get into a home, and then once they get into a home we want them to have better credit for that next transaction.
And it’s a free consultation with you guys, right?
Yeah. I review the credit report top to bottom. I give clients homework. I mean, if there’s something you can do on your end, definitely I’m going to give you that homework and then let you know expectations that I expect of what we can do.
And real quick, what is the minimum credit score that you’re seeing right now that home buyers are trying to get to that minimum score? If they’re coming off of a bad divorce where their credit was crashed because of the other partner or a bankruptcy, what are they trying to get to get into a house right now?
Well, every lender’s different and lots of different mortgage companies and banks have different guidelines. For government loans what we see most commonly is 580 to 600 to get into a mortgage. But as I mentioned before, that’s not great credit, and it’s probably not going to be the best interest rate, or the best loan program, but I’ll still encourage people to go ahead and move forward and go through that process and just try to get it as good as possible.
But we have people that come to us that are trying to do cash out refi’s and they need to be at a 680, or they’re trying to do a jumbo loan and they need to be at a 740. The target mark could be different for different people, but minimum probably you want to get up in that 600, 620 range to get a reasonable loan.
Good deal. Good deal. Well listen, I really appreciate you guys being here, and I know you all have a lot of other things to be doing, so thank you for taking your time out in your day to be here with us today.
Well, we love Lafayette, so awesome.
Awesome. Well I hope you guys get some good food while you’re here.
Thanks for coming.