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Preparing Your Credit for a New Mortgage

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Preparing Your Credit for a New Mortgage

So you are ready to take the plunge and apply for a new mortgage loan this year? Great! Congratulations on making the decision to become a homeowner. With low interest rates, tax advantages, and a host of other benefits that come along with purchasing a home, you have about a million reasons to break free from the shackles of renting.

You can set yourself up for success during your entire home buying experience by knowing what to expect ahead of time. Most importantly, you should be sure that your credit is in tip top shape so that you can qualify for the most attractive rates and terms available on your new mortgage. Check out these 5 steps to help you get started.

1. Check Your Credit

There’s nothing worse than filing out a mortgage application only to find that some unwanted “surprises” have shown up on your credit reports. Unfortunately, this is a very common problem. However it doesn’t have to be since you can access your own credit scores and reports online 24/7. Plus, contrary to a popular credit myth, checking your own credit does NOT harm your credit scores whatsoever.

CLICK HERE for a list of great resources where you can access your 3-bureau credit reports and scores. Finding out exactly what is on your credit reports prior to your loan application should definitely be the first item on your “to do” list during the home buying process.

2. Dealing with Surprises

If your credit reports were all 3 squeaky clean when you checked them in step 1, then skip down to step 3. However, if you found errors or blemishes on your credit reports then you may have some work to do before applying for a mortgage.  Remember, you have the right to dispute inaccurate and unverifiable accounts with the credit bureaus. You can dispute accounts on your own, but you also have the right to work with a professional if you are too busy or feel overwhelmed by the process. CLICK HERE to schedule a no-obligation credit analysis to develop a professional plan to help you work toward cleaner credit reports.

3. Optimize Your Scores

Even if you have no errors or derogatory items on your credit reports (i.e. collection accounts, charge-offs, tax liens, judgments, etc.), it may still be possible for you to improve your credit scores. Take a long hard look at your credit card balances. Paying your credit cards down to $0 can potentially have a very BIG impact upon your scores. (CLICK HERE to read “The Perfect Credit Card Balance.”)

Can’t afford to pay off all of your credit cards? You still have options. Paying down even a few of your cards to zero might still be beneficial to your credit scores. Plus, you can always consider a debt consolidation loan to transform that score-lowering, revolving credit card debt into much more credit score friendly debt – an installment loan.

4. Avoid Mistakes!

When preparing to apply for a mortgage, you need to be a credit boy scout. You don’t want to make any credit mistakes which could result in lower credit scores and a loan denial. Some of the most common mistakes you will want to avoid include making late payments on existing accounts, charging up your credit card balances, opening new accounts (that new car loan needs to wait!), and having your credit reports pulled excessively by lenders.

5. Monitor Your Credit Reports and Scores

There is no better time to keep a close eye on your credit scores than while you are preparing to apply for a mortgage. However, with so many credit monitoring options available, it can be difficult to choose. Keep in mind that a credit monitoring service which allows you to keep an eye on just one credit bureau and one credit score is not going to be enough. After all, when you apply for your mortgage the lender is going to take a look at all 3 of your credit scores and all 3 of your credit reports – Equifax, Trans Union, and Experian. CLICK HERE for a list of several different 3-bureau, 3 score credit monitoring services to see which one is the best fit for you.

Buying a new home is an incredible and exciting experience. However, credit problems during the mortgage application process can often turn what could be a wonderful experience into a nightmare. Follow these 5 steps above and set yourself up for mortgage success. It can be tempting to take shortcuts, but putting in the work on your credit ahead of time will pay off every time.

michelle-black-credit-expert

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars on various credit and financial topics. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.

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7 New Year's Resolutions to Improve Your Credit

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7 New Year's Resolutions to Improve Your Credit

Whether or not you are a believer in New Year's resolutions it is a smart idea to take an honest look at your credit from time to time in order to see how it can be improved. Good credit can help you to save tons of money, get approved for the loans you need, and can even help you to land a better job. It is 100% worth your time, energy, effort, and money to work towards achieving and maintaining the best credit possible.

Here are 7 steps that every single person can take to make steps toward having better credit this year.

1. Pay every bill on time.

The importance of paying your credit obligations on time, every time cannot be overstated. In FICO's credit scoring model a whopping 35% of a consumer's credit scores are assigned based upon factors included in the "Payment History" category of a consumer's credit reports. If late payments do occur you can bet the bank that they will have a very negative credit score impact.

2. Cut spending.

Overspending is perhaps the #1 cause of credit problems for most Americans. When consumers charge more than they can afford to pay off in any given month not only do they hurt their credit scores by doing so (yes, credit card debt can in fact lower credit scores even when payments are made on time), but they also set themselves up for financial problems and serious credit problems in the future. In fact, overspending can lead to late payments, collections, judgments, and even bankruptcy if the problem is left unchecked.  

3. Make a plan.

Failure to plan is the same as planning to fail. A well planned budget is a crucial step towards healthier credit. Smart consumers tell their money where to go instead of wondering where the money went after it has already been spent. CLICK HERE for a free copy of the HOPE4USA Basic Budgeting Worksheet to get started.

4. Establish credit.

Credit cards can be extremely useful tools in building or rebuilding better credit, as long as they are managed properly (on-time payments and never revolving a balance from month to month). Even consumers with credit issues can qualify for many secured credit cards. CLICK HERE for a list of credit cards to compare and see which ones might be a good fit for you.

5. Become familiar with your credit reports and scores.

Every consumer should be in the habit of checking all 3 of his credit reports often. The credit bureaus and your creditors are obligated by law to report accurate information on consumer credit reports. However, it is up to you and you alone to ensure that the information contained on your credit reports is actually correct.

You can access your 3 free credit reports each year at www.annualcreditreport.com (credit reports only, not scores). You can also access your credit scores for a fee or as part of a free trial offer from a credit monitoring service. CLICK HERE to compare credit monitoring services which may offer free or low cost credit scores as part of their introductory offer.

6. Correct errors.

Errors occur on credit reports all the time. In fact, in 2013 the Federal Trade Commission released a study which found over 40 million errors to be present on consumer credit reports. If you discover incorrect or suspicious information on your credit reports then you have the right to dispute that information according to the Fair Credit Reporting Act.

Disputes can be handled yourself or you also have the right to hire a professional credit expert like our HOPE4USA team to assist you. CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert to learn more about how our team can help you fight for the better credit you deserve. Fixing credit problems can certainly be a difficult job, but it is not a job that you have to do alone.

7. Establish goals.

The final tip is perhaps the first step that you should take as you set out on your journey toward better credit. Identify the reason why you want to achieve better credit. Do you desire to purchase a home for your family? Is your goal to have the strong credit you need to finance your education or the education of your children? Do you need better credit to start or build a business? Building better credit can be a long, hard journey (especially if you are working alone without professional help). Your "why" can help you to stay the course even if you feel frustrated or impatient at certain points within your journey. Your "why" is also the reason that all of your hard work will be worth it in the end. 

michelle-black-credit-expert

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.

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3 Reasons You Should Work with a Realtor When Buying or Selling a Home

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3 Reasons You Should Work with a Realtor When Buying or Selling a Home

It should come as no surprise that the majority of the clients we work with at HOPE4USA are working toward achieving better credit reports so that they can ultimately purchase a home. In truth, nothing gives our team of credit experts a greater sense of fulfillment than when one of our clients completes the HOPE Program and has credit reports ready to qualify for a mortgage. Talk about a great feeling!

As credit experts and credit restoration professionals we have a very unique perspective of the home buying process. We have seen homebuyers and sellers try to struggle through the complicated process of buying or selling on their own and, while it is not impossible for the savvy consumer to buy or sell without a Realtor, it is certainly a much more difficult and time consuming endeavor. In fact, for the average person making the decision to buy or sell without a Realtor is usually a recipe for disaster. Here are 3 reasons why working with a Realtor is almost certainly going to be in your best interest.

1. DIY Vs Professional Help

Sometimes it truly pays to hire a professional. Of course you have the right to buy or sell a home on your own, but if you are being honest with yourself then you know that you really should not expect the results to be the same. For example, it is also your right to cut your own hair, pull your own teeth, fix your own credit, or repair your own car. However, unless you have extensive training in the aforementioned areas then your hair, teeth, credit, and car would all likely be in much better shape if you left them in expert hands instead. The concept of working with a Realtor is no different.

Experienced Realtors are involved in home buying/selling transactions hundreds of times throughout their careers. Even if you have purchased or sold a few homes on your own in the past you still do not have the same level of experience that even a new Realtor would have. Having an expert working on your behalf pays.

2. Someone In YOUR Corner

Whether you are selling a home, buying an existing home, or building a new home it can be extremely beneficial to have someone in your corner during the process. If you are selling a home your Realtor will work to ensure that you get the top possible dollar for your property. (After all, the more you make the more commission your Realtor earns so there is a big monetary motivation for your seller's agent to do a great job for you.) If you are purchasing a new or existing home your Realtor can help to make sure that you get the most house possible for your money. Plus, as a buyer, having a Realtor is a practically a no-brainer due to the fact that your Realtor's commission is being paid by the seller of the home in the majority of cases.

3. The Contract

Whether you are selling a home our purchasing a home the real estate contract can be a tricky proposition to navigate without professional assistance. Contracts can serve the purpose of protecting buyers and sellers alike - allowing either party to walk away from the offer if certain conditions are not met. In extreme circumstances failure to properly draw up a real estate contract could even leave you vulnerable to a lawsuit.

How It All Boils Down

Even if you are a self sufficient, internet savvy, and extremely bright individual having a qualified professional represent you during the home buying or selling process can still be very valuable. Unless you have the time to become a real estate professional yourself (a very tall order to try to squeeze into an already busy life) then it is probably best to hire someone to represent you. Buying or selling a home can be an emotional and complicated ordeal not to mention that it will probably be among the most expensive financial transactions you make over the course of your lifetime. Having a reputable and experienced real estate professional in your corner is simply a smart decision.

michelle-black-hope4usa-credit-expert

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here. ​

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Your Business Has Credit Scores Too!

Most people have a basic understanding that they have 3 major credit scores and that these credit scores determine whether or not they will be able to qualify for financing when they need it. However, did you know that your business has credit scores too? Many business owners do not realize this fact, unless they have tried to apply for a business loan in the past. Just like you, as an individual, have 3 major credit scores, your business has 3 major credit scores as well. Your business scores are calculated very differently than personal scores and are calculated by different reporting agencies as well: Dun and Bradstreet, Experian Business, and Equifax Business. Dun and Bradstreet is the largest major business credit reporting agency. Dun and Bradstreet is commonly known as D&B and is a publicly traded company headquartered in Short Hills, New Jersey. D&B provides information on businesses and corporations to be used by lenders in credit decisions. Currently, D&B holds over 200 million business records on file.

The roots of Dun and Bradstreet date all the way back to 1841 with the foundation of the Mercantile Agency in New York. The Mercantile Agency joined with R.G. Dun & Company in 1933. Upon merging companies the Mercantile Agency became known as Dun and Bradstreet. It was 1962, however, before D&B created the DUNS number - the worldwide method of identifying businesses.

There are many products and services which Dun and Bradstreet currently offer to both consumers and to businesses. Some of the most popular available are D&B's risk management products such as the Business Information Report, the Comprehensive Report, and the DNBi platform. All 3 of these products provide access to current and historical business information - information which is primarily used by lenders and financial institutions to assist in making credit decisions.

D&B also offers sales and marketing products such as the DUNS Market Identifier database, Optimizer, and D&B Profession Contacts. All of the aforementioned products provide sales and marketing professional with business data for both prospecting and CRM activity. Just as Equifax, Trans Union, and Experian are leaders in the consumer credit arenas (for individual credit reports), Dun and Bradstreet is the undisputed leader in the sale of business credit data.

If you would like to learn more about how you can establish a profile with Dun and Bradstreet, obtain a DUNS number, and get approved for $50,000+ in business credit this year with no personal guarantee, please give us a call at 704.499.9696. A HOPE Business Funding expert will be happy to speak with you and to answer any questions you may have!

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