When it comes to the housing market in Michigan, things are definitely looking up for 2017. According to RealComp.com, the current inventory of homes for sale in southeast Michigan is at a 15-year low. Property values are going up, up, and up, so if you’re looking to buy a home, now is a good time. Of course, if you’re dealing with a low credit score, you may want to do what you can to bring it up before applying for a home loan.
Unfortunately, there’s no overnight fix for bad credit. Depending on the extent of damage that’s been done to your credit, real credit repair can take time and effort. However, if you need to bump your credit score up in order to qualify for a certain type of loan – such as an FHA loan – this may be possible.
Ways to Improve Your Credit Score Fast in Michigan
If you’re looking to buy a house in Michigan with bad credit, applying for an FHA loan is a good option. These loans are insured by the Federal Housing Administration, so it’s easier for applicants with bad credit to get approved for them. Typically, a prospective home buyer needs to have a credit score of at least 580 in order to qualify for an FHA loan.
It isn’t uncommon for exceptions to be made with the 580 credit score rule, but you’ll have a much better chance at being approved if your credit score is at least this high. Therefore, if your credit score is at 560 or so right now, here are a few tips on how to improve your credit score fast and meet your goal.
Pay down high credit card balances.
When your credit score is calculated, something called a credit utilization ratio (CUR) is factored in. This is the percentage of your available credit that you’re using at any given time. Ideally, your CUR should be 30 percent or lower. If you’re using 50 percent or more of your credit card spending limits, your credit score can drop even if you’re making every payment on time. Why? Using too much credit can send up a red flag for lenders. It makes it seem like you’re relying too much on credit in order to meet your financial obligations. In short, it makes them perceive you as a loan risk.
Putting a hold on credit card use while paying down your balances should give your credit score a nice boost. Just remember to keep your CUR low even after you’ve purchased your home. This will prevent you from accumulating a mountain of credit card debt and allow you to focus on making your house payment.
Get current with your monthly bills.
Your payment history matters the most when your credit score is calculated. This is why the best way to earn and maintain good credit score is to make every payment on time. Paying late on practically anything can hurt your credit score. Plus, once you get behind on an obligation, it can be difficult to catch up, especially when late fees are thrown into the mix.
Closely examine your household budget and eliminate unnecessary expenses in order to get current with your bills. After you’re caught up, reexamine your budget every month to make sure you’re still on track. It’s also a good idea to set up text or email alerts for due dates if you have a tendency to forget. As a Michigan homeowner, you’ll want to be sure that you’re set up for success.
Check your credit reports for errors.
The QUICKEST way to improve your credit score is to find and dispute any errors that might be on your credit reports. Of course, if you’re planning to buy a home in Michigan, you’ll want to check your credit reports anyway. Before making a large purchase, it’s important to know exactly where you stand with your credit. You can get a free copy of your credit report from each of the major credit bureaus every 12 months by visiting www.annualcreditreport.com and filling out an online form.
You should also know that about 80% of consumer credit reports contain errors of some type. Wouldn’t it make you angry to find out that you lost out on your dream home because of a mistake? It should. Credit report errors are a violation of the Fair Credit Reporting Act, a federal statute that entitles consumers to accurate credit reports. This is why the credit bureaus are required by law to remove items from credit reports that are proven to be false.
If you do find an error – or errors – on any of your credit reports, you must write and send a dispute letter to the appropriate credit bureau(s). This can be time-consuming, and if you don’t have experience in dealing with the credit bureaus, it can be frustrating.
Luckily, Michigan consumers can get a FREE credit repair lawyer to handle the whole process for them.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or contact us on our contact page.