Finally you are ready to buy a home, you’ve weighed the options and being a homeowner is the sound decision.  You are on the right track, you are coming up on the end of you rental lease and  you’ve researched  you feel you have a good enough grasp on the process to take the first step and speak with a loan officer.   Upon doing so you realize  6 months ago you were late on a credit card payment and it lowered your credit score enough to disqualify you.

Panic sets in, what do you do now?

Forgiveness

If you have a good history with your creditors there is such a thing as a forgiveness.  I have personally seen clients call their credit card companies and ask for a “mulligan”.  If it was an isolated incident and you have a good explanation, sometimes companies will remove the late payment and let you be on your way.  Keep in mind this does not work if you have a habit of being late on your cards and other debts.

The Downside:

The problem is it takes 30-60 days for this new information to report (and raise your score).

Re-Score your credit

If you immediately paid your defaulted payment and are on the right track again, there is an option called rapid rescore.  If you are able to provide your lender with documentation showing the problem has been fixed, they can work with the credit reporting companies and “rescore” you for a quicker result.  This has good results in a much shorter time period.

The Downside:

Rapid rescoring costs money, as much as $40 dollars a trade line.  ($120 per item)  and the result isn’t necessarily guaranteed.

 

 The Take Away

Sadly there isn’t ever a guarantee “quick fix” when it comes to your credit repair.  Your credit score is a delicate thing that takes years to build but only days to lose.  The best practice is to set up a system that ensures you will not be late on any payments.  If you foresee a late payment coming and you cannot do anything about it, the best practice is to contact the creditor and explain your situation.  Creditors are much more lenient when you work with them.

What Can I Do Now?

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Justin Scott

Loan Officer

NMLS 878581

  1. C) 920-530-4484
  2. O) 920-490-8823
  3. F) 920-490-8967

       Executive Mortgage

      NMLS 271650

 909 . E Walnut Street

Green Bay WI 54301