Jargon Free Effective Credit Repair

by D. Irene from Upper Marlboro, Prince George, MD

Ask Kate Jargon Free Effective Credit Repair : Hi Kate, How do I increase my credit scores and get a mortgage? I am 70 years old, I don't want to live with family but I cannot afford to rent alone in Maryland. I have a job and Social Security Income. In 2007, I lost my job and my home sold just weeks before the foreclosure.



D. Irene continues... My credit report shows Paid as Agreed, but with 4 late mortgage payments.

Then in 2008, I had a chapter 7 bankruptcy. I've paid three collections, but only one has reported Paid in Full. So I am writing letters to the credit reporting agencies with paid receipts.

My credit scores are 607, 577, 589. Is there a chance for me to get a mortgage loan?

Kate Answers: Jargon Free Effective Credit Repair

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Dear D. Irene,

Here are 6 steps to getting a mortgage and buying a house in spite of having credit issues.

Read through this step-by-step and then return to follow the links to a wealth of information on Get Your Best Mortgage Rate.

Let's get going on your jargon free effective credit repair. Starting with a timeline, it looks like your writing arm will be developing larger muscles.

Step 1 - Begin by writing down your timeline.

Timeline: Before you go any further, dedicate some quiet time to document a timeline of events affecting your finances since 2007. Make it as long as you like. Add details and dates.

This will help document facts and occurrences that you might otherwise forget as you delve deeper into the credit repair. You can also use this for an explanation letter when you apply for mortgage pre-approval. More on this later.

Step 2 - Now it's time to gather financial documents.

Financial documents: Now open up your file cabinet. Pull out files related to your timeline, like your bankruptcy documents and discharge certificate. Include the paperwork from your foreclosure and letters you received about debts that turned into collections.

Did you include these in your timeline? Go back and double check that your timeline has the correct dates.

Step 3 - Next organize your mortgage paperwork.

Mortgage paperwork: Use my Mortgage Information Planner for a comprehensive list of paperwork you will need for mortgage pre-approval, beginning with paystubs, W2s, and bank statements.

Set aside your timeline, financial documents, and mortgage paperwork in a safe location. If you place them in a box, label it clearly so it doesn't get merged into storage with Christmas decorations.

Step 4 - Have you ordered credit reports lately?

Learn about credit: If you haven't ordered a credit report lately, go to my informational page on Equifax, Experian, and TransUnion where you will learn about credit reports and the three major credit reporting agencies.

Free credit report: You can order a free credit report. But in this case, getting your credit score is not free. You have to pay for it.

Free credit score: Or you can pay for a credit report that includes a free credit score. The choice is yours. There are pros and cons to each.

Go here to compare the 2 options and learn more about the three major credit reporting agencies.

Step 5 - Finally it's time for credit repair.

Assess the extent of your credit repair: Now you can decide how you want to remedy credit errors. Do you have the time and energy for do-it-yourself credit repair? Or would you prefer to pay a professional?

Be your own credit repair consultant: For help with improving your credit on a do-it-yourself basis, go to my informational article at Fixing Bad Credit Yourself.

Professional credit repair firm: If do-it-yourself credit repair feels overwhelming, don't throw up your hands in despair. Consider a reputable credit repair firm.

Once your credit report accurately reflects your true history, add it to the above documents. Update your paystubs and bank statements and contact a lender to get on the home buying path.

Step 6 - At last it's time to buy a home.

Mortgage pre-approval: With your ducks in a row, you can begin the mortgage process. Take these steps.
  1. Compare mortgage rates and lenders for the best results.

  2. Choose a Realtor as your greatest ally for buying a house.

  3. Eliminate stress with the mortgage pre-approval process.

One last thing. As you shop for homes, it's easy to forget which houses you liked best and for what reasons. I have a solution. It's called the Home Buying Scorecard. I think you'll like it! And did I mention it's free?

Good luck and best wishes,

Ask Kate

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Paying Medical Bill to Get Mortgage
by: Artie from Pennsylvania

Hello. I have a $9000 medical bill on my credit report and was wondering if I could still possibly obtain a mortgage?

Hi Artie, Kate here. If the bill has been turned over to a collection agency, it can complicate getting mortgage approval.

But it also depends on the reason for the bill going to collections, how old the entry is on your credit report, the strength of the rest of your credit, and the type of mortgage program.

When you shop for a mortgage lender, ask about FHA home loans. FHA financing is often more forgiving of credit issues than conventional lending.

All the best, Kate

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You can also ask Kate about your mortgage at How to Improve Your Credit Rating with Amazing Success.

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