Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
With a headline like that it seems fitting to take the opportunity to thank my wife and family for all of their hard work in making this Pesach an amazing experience from start to finish. As much as I can easily fill up this entire newspaper with accolades and praise on this subject, my focus for this article, however, is consumer credit reporting.
In life, it seems that ‘credit’ is everything. On a personal level, an individual should strive to be a person of integrity and ethics. Professionally, a good reputation is critical to gain the trust of clientele and needed vendors or business partners. When it comes to getting the best mortgage, your credit score is a major factor in the kinds of rates and conditions you can get. The good news, however, is that with the proper insight and guidance one can often manage and improve his credit a lot more easily than most people might think possible.
Common Credit Scenarios and Questions
Does running my credit hurt my credit scores? When does a credit card late payment show up on my credit report? Will my credit rating be affected by the dollar amount of the late-payment? Why is the score I pulled online different from the score pulled by my Mortgage Lender? Does closing an account hurt my credit even if I close it rather than the credit grantor? Does opening a line of credit hurt my credit? When does negative information get removed from a credit report? Once you go bankrupt is your credit ruined forever? Will someone with absolutely no credit be able to get a loan? Does a collection account come off once I pay it? How can I get a free copy of my credit report?
Knowing Your Tradelines
Most people do not know that the length of their credit impacts their credit scores. Some of the factors that are considered in this calculation include: the age of your newest and oldest accounts, the average age of all of your accounts, the length of time that different types of credit accounts have been established and the length of time it’s been since those different types of credit accounts have been used.
Review Your Credit Report and Dispute Errors
The FTC says that one in every five Americans has errors on their credit report that have an impact on their score. When warranted, disputing errors on your credit report can be a way to give your score a boost – but more often than not it is more harmful than helpful. Speak to a competent credit advisor to see what makes the most sense for your situation.
Talk to Your Creditor
If you’ve missed a payment and it’s more than 30 days past due, chances are your creditor has already reported the missed payment. Once a missed payment is on your credit report, the fastest way to remove it is to talk to them. Get a written and signed agreement that if you pay the overdue balance, they’ll report the account as “paid in full.”
Keep Good Debts on Your Report
While it is important to review your credit report and have any negative items removed, you’ll want to ensure that any positive entries – debts you’ve paid in full – stay on the report. When your credit report shows debts as paid in full, your score increases because it shows that you’re a responsible borrower.
Improving your credit score doesn’t have to take years. These are just a few of many strategies that I continually use to help my clients manage and improve their credit for better mortgage loan terms. Contact me directly to learn more.
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