credit reports explained remove judgments

Credit Repair - From C To A Paper
By Dan Lewis

If you've ever applied for a home loan with less than stellarcredit, you know how much extra you have to pay. Even though itcan take some time, credit repair is definitely worth pursuing.

Credit Scores

When considering your application for a home loan, a financialinstitution looks at your credit and assigns it a score. In theindustry, these scores are loosely referred to as a type ofpaper. The best scores equate to "A" paper, while lower scoresare graded just like in school, to wit, "B", "C", "D" and "Oh,my god" paper. If you have "A" paper, you can expect to get thebest deal, while lower grades are known as sub-prime borrowers.

Credit Repair

Credit repair is important because even small movements in yourcredit score can move you from one score to the next. If youmove from B paper to A paper, you will save thousands of dollarsin lower interest rates. A credit score of roughly 680 isconsidered to be A paper. If you have a score of 670, creditrepair can bump you to 685 and save tens of thousands ofdollars. In short, you want to make the effort to repair yourcredit whenever possible. Don't just sit and suffer withsub-prime loans.

To repair credit, there are simple and not so simple steps thatcan be taken. Let's take a look at some.

Credit Card Debt Ratios

Believe it or not, you can improve your credit scores by simplymoving credit card balances around. A credit card with nobalance actually doesn't help you much if you have another cardthat is maxed out. If you shift the debt evenly among all creditcards, you credit score should increase. This has to do withsomething called your ratio of debt to available credit. It is aloophole

of sorts, so take advantage of it.

Closing Accounts

Don't! Many people will close credit card or other borrowingaccounts when they are done with them. This is a huge mistake.First, it hurts you because you've reduced the available creditportion of your debt to available credit ratio. Second, you losea record of your long-term credit payment history for theaccount. Lenders like to see these, so suck it up and keep theaccount open.

Inquiries

As strange as it sounds, inquiries on your credit report hurtyou. Try to eliminate these by challenging them through the FairCredit Reporting Act and limiting the credit applications youpursue. You can challenge inquiries by ordering copies of yourcredit reports and following the instructions on the report.Make sure to do this for all three credit reporting agencies -Equifax, Experian and Transunion.

Check Your Report

The big three credit agencies must report to Congress each year.Each year they report an astonishing number of problems withtheir systems. This can affect you since accounts will appearthat are not yours. If these accounts have problems, your creditscore goes down. Make sure you check your report before applyingfor a loan. You want to deal with these issues before you are inescrow.

Borrowing large sums of money for a home loan can beintimidating. Avoid acting like a dear in the headlights. Dealwith your credit issues and save yourself thousands in payments.

About the author:Dan Lewis is with http://www.gwhomeloans.com - a San Diegomortgage brokers providing San Diego home loans. Visithttp://www.gwhomeloans.com/services.html to learn more aboutoptions on San Diego mortgages from a San Diego mortgage brokercompany.

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