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Buying a Home in Colorado Springs, manage your most valuable asset! Part VI
Colorado Springs Vintage Homes is happy to feature a great article
on Managing Your Credit Score – Part VI
Anza Goodbar, President of Clearview Mortgage 
Previous Posts by Anza:
- Tips for Colorado Springs Consumers – what is identify theft?
- Want to buy a home in Colorado Springs, manage your most valuable asset!
- Buying a Home in Colorado Springs, manage your most valuable asset! Part II
- Buying a Home in Colorado Springs, manage your most valuable asset! Part III
- Buying a Home in Colorado Springs, manage your most valuable asset! Part IV
- Buying a Home in Colorado Springs, manage your most valuable asset! Part V
Now that you understand the individual components of your credit score and how they factor into your total score, let’s talk about what you can do to increase your score.
How to build your credit score:
You may be young and just starting to build a credit history, you may have been married and all of the credit history was in your husband’s name or you may have experienced difficulties in your past that have caused blemishes on your credit report.
The first step is to pull a tri-merged report to verify it is accurate. For this example, let’s say everything reporting is correct. You may not have a score because you have not applied for credit in the past. It may be difficult for you to obtain credit without having credit, so the best option for you would be apply for a secured credit card from a National bank like US Bank, Wells Fargo or Chase. These cards set a credit limit based on a deposit amount. You can open a secured account for as little as $300. After you have made one year of on-time payments it will convert to an unsecured card and apply your deposit to your balance. Some banks will even increase your limit based on good payment history.
I advise my clients to use these cards for items they would write a check for or pay cash and then pay them off each month so they are not increasing their debt. Items you might use this card for would include groceries, gas, utilities or dining out. It is essential you make each payment on time or it will have an adverse affect on your credit report.
Next let’s take a look at a scenario that shows negative reporting. This could be a late payment on a credit card or a collection item for a medical bill. Contact the creditor and see if you can work it out. If you have had a history of on-time payments and have a good reason for the late payment, they made be lenient and remove the late reporting. Negative reporting can remain on your credit report for 10 years.
We often see medical bills that insurance didn’t cover. They are still your responsibility to pay so you will need to try to settle the bill. Collection agencies will often offer you a lesser pay-off amount to get the debt off of their books. You can ask for a letter of removal to send to the credit reporting agencies to have the item removed. Collection agencies will typically supply the letter if you make a one-time payment to clear the account.
We also encounter credit reports with incorrect data reporting. When this occurs, contact each bureau in writing. Send a copy of your credit report highlighting the items in dispute, a copy of your driver’s license and your social security number along with your letter. They will conduct an investigation concerning your request. You will receive a response within 30 business days. If they can not verify this debt belongs to you within that time frame, they will remove it from your credit report.
The most important thing you can do when trying to build credit is to pay everything on time. Do not exceed 70% of your allowable credit limits. And finally, don’t apply for too much credit. You are in control of the picture your credit report paints, use credit wisely.
Written by Anza Goodbar, President of Clearview Mortgage Have a question? Contact Anza
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