People who have a low credit score want to boost it so they have more financial options. From buying a home, a car or getting a credit card, having a good credit score will save you a lot in interest charges. Credit repair is one of the best kept secrets to help people boost their credit score high enough to qualify for a bad credit home loan with average or bad credit.

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Today’s advanced credit repair solutions are helping consumers raise their credit score so they qualify for great mortgage rate home loans.

There are credit repair companies that say they can help you to improve your credit score. Some of them are good and some are not so good.

If you are interested in hiring a credit repair company, do some research to find a company that has reasonable prices and is well rated from the Better Business Bureau.

But did you know that you can repair your credit on your own?

If you have some time and don’t mind paying attention to detail, you can boost your score yourself and secure home loans for all types of credit.

#1 Go Over Your Credit Reports

The major credit bureaus are TransUnion, Equifax and Experian. They must give you a free copy of your report each year. You just need to go to each site and request it.

You also can review your credit reports on Credit Karma, which is a frees service. Once you have copies of all your credit reports, you can review them to check for errors.

#2 Dispute Negative Marks

Back in the day, you needed to write letters to each credit bureau if you wanted to dispute errors. Credit Karma allows you to dispute errors online.

Be sure to focus on the negative marks that carry the most weight. The more serious ones are collection accounts and judgments. Many people have small collection accounts on their reports from health care companies.

If you are doing it online through Credit Karma, you can dispute the negative mark, and the creditor may agree to remove it.

#3 Dispute Incorrect Late Payment Marks

Mistakes do occur. Lenders may report a payment late even though it was paid on time. A credit card provider could fail to put in a payment correctly. These could be in accounts that are current or accounts that were closed.

Your payment history is another major factor that will weigh on your score, so work hard to clean up any errors.

#4 Decide If You Want to Play Some Credit Repair Company Games

One of the tricks that credit repair agencies like to do is to dispute information that you know is accurate. For example, say one of your accounts went into collection and you did not pay it. The collection company gave up. It remains on your report and is accurate. But you can still dispute it. If you do, the entry could be removed.

The reason is when you make a dispute with the credit bureau, it will ask the creditor to verify it. Some will but many collection agencies will not. If they ignore it, the agency must remove it from your credit report.

This means that smaller companies such as collection agencies and local lenders, often have smaller staffs and are less likely to respond to credit bureau inquiries. It’s a pain that they don’t need and they don’t make them any money. Major creditors, such as banks, credit card companies, auto finance companies and mortgage lenders almost always respond.

#5 Be Nice to Credit Companies

If you have not been able to remove a negative entry from your credit report, you can just call the credit card company or lender and ask if they can remove the negative mark. It will help you if you have been a good customer for many years.

#6 Boost Credit Limits

Credit card utilization affects your credit score a lot. If you have a balance of more than 50% on your cards, it will hurt your score. Obviously, you should work to pay down the balances as much as you can. But at the same time, you can ask the credit card company to increase your limit. If you are making on time payments, they may do it. For example, if you have several thousand on a Discover card and make payments on time for years, they may increase your limit by several thousand if you ask for it.

#7 Open Another Credit Card

You also can boost your credit card utilization by opening a new account. Just keep that card clear and do not use it, and your credit utilization will drop.

#8 Become Authorized User of Another Person’s Card

This is a neat trick that can boost your score. If you have a relative with a high credit score and high credit limit, you may add yourself as an authorized user. This can boost your score. Discover is particularly easy to add yourself as an authorized user.

#9 Leave Old Cards Open

Age of credit history matters for your score, so you should not close old, open credit lines.

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How the New Credit Report Changes Are Helping More Home Buyers Qualify for Mortgage Loans

Have you been trying to get into the home buying market but thought your credit score was holding you back? You could be in for good news: Recent changes in credit reporting may help more buyers get mortgage loans.

The changes in credit report reporting goes back to the end of 2017. The major credit bureaus – Equifax, TransUnion and Experian – agreed to change how they count collection accounts. Such accounts represent many types of debt: defaulted gym memberships, unpaid motor vehicle violation tickets, late rent and sometimes something as trivial as a forgotten, un-returned library book!

But the biggest contributor to these collection accounts definitely is unpaid medical bills, accounting for 52% of collections on credit reports last year. Also, about 23% are unpaid utility bills. Six percent of all the debts are in default and have been sold to 3rd party collection agencies. Approximately 40% of all consumers who have a credit report with the major credit bureaus have had an account in collections at some point.

Research shows that collection accounts were more common during the last recession. However, there has been a decline recently in the number of consumers with a collections account on their credit. In 2017, approximately 12% have such negative marks on their credit reports; it was 14% in 2013. Today, approximately 10% have collection accounts on their credit. The substantial drop is probably due to more collections being dropped from credit reports.

The National Consumer Assistance Plan or NCAP was initiated in 2017. It mandates a more detailed and accurate reporting of all collection accounts on credit reports. This includes ensuring they are marked ‘paid’ when they are paid in full. The law outlaws reporting debts that do not show an association with an agreement to pay or a contract. Also outlawed is reporting debts without enough information to link them to the person. There must be some sort of definitive information such as a name, address or SS#.

A major change that is going to allow more people to get a mortgage is the one that does not allow the reporting of a medical debt that is under 180 days old. Some of these debts have proven to be troublesome because some insurance organizations have slow pay practices. Many consumers have said they did not know their claims were not paid until the account was given to a collection agency.

For the 12-month period that concluded in June 2018, the number of consumers with an account in collections on their credit report dropped from 33 million to 25 million. The total number of accounts in collection on credit reports dropped from 66 million to 47 million. The total money due dropped to $11 billion.

Many of these consumers had low credit scores to start with, with 80% of them having FICO scores under 660. Nine percent did not have a credit score at all, with reports that were mostly collection accounts. These consumers also had a higher rate of delinquency on their other consumer debts than most people.

A recent study found that the effects of removing the collection accounts from their credit was usually small because of the consumers’ low credit scores. There was an increase on average of 11 points on the Equifax scale. But there were some people that had larger changes in credit score.

The study found that 18% of consumers affected saw their credit score jump by 30 points. This is a major increase that can be the difference between getting a home loan and not. Those who saw the biggest hike to their credit scores were often those with low credit scores initially. Those who had a 40% boost in their score had a score on average of 530 and ended with an average of 588. That is enough in some cases to qualify for a 3.5% down payment on an FHA loan.

For people who had subprime credit scores below 620, just 20% had a big enough increase to put them above that mark. These consumers also may have seen benefits from other credit reporting scores, such as removing tax liens and judgements.

However, experts point out that the changes that NCAP brought were a cleanup of credit reporting practices and not a purge of negative account information. Many borrowers with lower credit scores from collection accounts will see a benefit with this cleanup of credit reporting. Higher credit scores give consumers better access to home loans, car loans and credit cards. But it should be stressed that the effects of removing these negative items from some credit reports will be reduced if the consumer continues to pile up negative payment history.

As far as getting home loans go, many could benefit from this credit reporting change. FHA loans are especially easy to get with low credit scores but getting approved depends upon having a relatively clean credit history for the previous one or two years with no further negative items reported on the credit report.