How I personally increased my credit score to buy a house!
In this quick post, I am going to break down how I personally increased my credit score 30ish points in a 30-day time frame! We started Jan 18, 2022 with less than a 600 credit score and got our score to 621 before the end of February 2022. Our score went up roughly 30 points.
First and foremost, ALL the glory goes to God. Apart from His strength and guidance, I do not think we could have done this!
Disclaimer I am not a financial advisor or credit expert, this is only MY personal experience
Please keep in mind, Everyone’s credit profile is different and everyone has different things that affect it so this is not a guarantee your credit will jump up as much as mine did as quickly as mine did, but I do believe these steps can help you.
First, you will need to be working with an amazing REALTOR® and lender during this process to help you! If you are in the Central Texas area, I would love to be on your team to help you!
Things we did…
My lender helped me come up with a plan after reviewing my report with me on the myFico app. She walked me through step by step all the things that I should pay off in collections/pay for deletion and what would be useless to pay off as well.
MyFico is the ONLY app that I know of that will give you ACCURATE mortgage scores..
We Paid off 1 small collection, not deletion, meaning it is still on the report but with a 0 balance
Paid off another collection and had it REMOVED from the account by paying for DELETION
We used 3-7% credit usage on each credit card we had and allowed it to report, so I made sure a balance of 3-7% was reported to the credit bureaus for each card. What they bill you for each month, is what they report, so if your statement period is the 1st-28th and you get a bill on the 29th, before the 28th you need to make sure you only have 3-7% usage. Then I would pay it about 3-5 days after they sent me the bill to make sure it reports but ALWAYS pay in full before the due date, never carry a balance, and never accrue interest!
Things that can also help you/Tips:
Do not cancel a credit card
If you pay off debts and close out an account fully it could actually hurt your credit this includes car loans etc.. so 100000% speak with a lender directly about YOUR file and what is impacting it... And ask them what you should close or leave open, etc… but do not close credit cards.
Before you pay off any collections account call all the ones you have and pay the ones that will allow you to PAY FOR DELETION before you pay for any others… The goal would be to pay less than what is owed FOR deletion, but even if it is a full balance if you can afford it, pay for deletion. Just paying the collections account will not help your credit SCORE.
BIG TIP- ASK YOUR LENDER before paying off a bunch of accounts, you may NEED THE CASH for closing, and paying those things off may not help your credit enough to make it worth it
Pay all bills on time
If you cannot get a credit card try to get a SECURED CARD.
If you cannot get a credit card or a secured card, See if you can get added as an authorized user for someone who is VERY RESPONSIBLE with their cards...This will help your credit. Make sure this person is someone who pays their FULL balance every month and does not use more than 7% of their credit limit each month!
There you have it! What we did and some tips to help you too!
Please reach out if you have any questions!
Samantha Hammonds- REALTOR®
All City Real Estate/The Villa Group
214-791-3961