Wednesday, August 7, 2013

Why You Need to Prepare in Advance for any Major Credit Purchase

Most consumers will apply get a loan for new home, car or have the need for a new credit card, only to find that their application has been turned down. They learn, too late, that they have poor credit. They never checked their credit report prior to applying. 41% of consumers have never checked their credit report and credit scores according to the Consumer Federation of America. Do you really know what is on your credit report and what your REAL credit scores are? The Federal Trade Commission recently conducted a survey only to learn that over 40,000,000 consumers have credit mistakes on their credit reports.

You credit score will drop quickly if you have new negative entries on your credit accounts but doesn’t it seem to take forever for the scores to go back up? Part of what contributes to this is that your mistakes (or someone else’s mistakes) can stay on your credit file for 7 to 10 years. While they are there, they will cause your scores to be lower than they could be.

Most people have read the advice that FICO, the credit Bureaus, and many news articles have told what must be done. I call it “the FICO Mantra”.
-          Pay your bills on time (and get current on ones that are not current)
-          Don’t apply for new credit unless needed
-          Keep your balances low on your credit cards (or pay down your balance)
All good advice, but this advice will not get your credit scores to jump back up for a long, long time.

What many consumers don’t realize is that mistakes on your credit report can’t be corrected immediately. The process takes time. You need time to go after any errors well in advance of applying.

And, to make matters worse, the updating process is out of the middle ages. You see, when your credit is pulled, what you are seeing can be 15 to 45 days old! Creditors only update their files once a month. If you paid an account off one day after they reported to the bureaus, the old balance will be reporting for at least one month. If this balance was close to the credit limit for a credit card you will still be losing points off your credit scores.

You need to review you credit well in advance of applying for major purchases to be able to take action to correct mistakes and for your accounts to be reporting the status most advantageous to your credit scores.

We ARE the experts in Credit Repair. Our founder, Daniel Sater, is a Nationally Recognized Credit Expert, Speaker & Author, and a Certified FICO Professional who also trains and coaches numerous Credit Repair Companies across the country and speaks at industry conferences. With Credit Scoring Advisor you get personalized, not computerized service from someone who will fight for you to improve your credit profile. Dan handles every file personally to ensure the best results for our clients. We know how to get the best results. 631-392-8685