LEARN ABOUT CREDIT
Be aware that paying off a collection account will not remove it from your credit report – it will stay on your report for seven years If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor – this will not improve your credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time Keep balances low on credit cards and other “revolving credit” – high outstanding debt can affect your credit score Pay off debt rather than moving it around – the most effect way to improve your credit score is by paying down your revolving credit; in fact, owing the same amount but having fewer open accounts may lower your score Don't open any new credit cards that you don't need, just to increase your available credit – this approach could backfire and actually lower your credit score If you have been managing credit for a short time, don't open a lot of new accounts too rapidly - New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user. Re-establish your credit history if you have had problems - Opening new accounts responsibly and paying them off on time will raise your credit score in the long term. Note that it's OK to request and check your own credit report - This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers (see above information on requesting your own credit report) Apply for and open new credit accounts only as needed - Don't open accounts just to have a better credit mix - it probably won't raise your credit score If you have credit cards, manage them responsibly - i n general, having credit cards and installment loans (and making timely payments) will raise your credit score; someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly Note that closing an account doesn't make it go away - a closed account will still show up on your credit report, and may be considered by the score
What is credit?
Credit is an arrangement by which a buyer can take possession of something now and pay for it later or over time. In exchange for paying later or over time, the buyer pays “interest” in addition to the original amount borrowed.
Is Credit Important?
If you want to make a large purchase, such as a car or a home, you will probably have to borrow the money to be able to make this purchase. Lenders want to know what risk they'd take by loaning money to you. To determine your credit risk, lenders use FICO® scores. You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Each score is based on information the credit bureaus collect and keep on file about your credit activity. As this information changes, your credit scores tend to change as well. Your FICO score measures your risk of repayment and quite simply are the credit scores most lenders use to make lending decisions about you. The higher your score, the less risky you are in the eyes of a lender. Taking steps to improve your FICO scores can help you qualify for better rates from lenders. Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. The short answer is yes, credit is important. A good credit rating can be difficult to obtain, and very easy to ruin.
Can I review my Credit Report
A credit file disclosure, commonly called a credit report, provides you with all of the information in your credit file. This information is maintained by a consumer reporting company (Experian, TransUnion, and Equifax) and could also be provided by the consumer reporting company to a third party, such as a lender. This credit file disclosure also includes a record of everyone who has received a credit report about you from the consumer reporting company within a certain period of time, these are called “inquiries”. Your credit file disclosure includes certain information that is not included in a consumer report about you to a third party, such as the inquiries of companies for pre-approved offers of credit or insurance and account reviews, and any medical account information which is suppressed for third party users of consumer reports. Under Federal law and the laws of various states, you are entitled to receive a disclosure copy of your credit file once every 12 months. You should request your credit file and review it for accuracy, please note, this file will not have your credit score as the purpose of this report is for you to review it for accuracy only.
To get your disclosure copy of your credit file for free, click on the following link: https://www.annualcreditreport.com/cra/index
OR to request it by phone:
Call 1-877-322-8228
You will go through a simple verification process over the phone
Your reports will be mailed to you within 15 days. Allow 2-3 weeks for delivery.
OR to request it by mail:
Download the request form (You need Adobe Reader to view the form; download a free version here)
Print and complete the form
Mail the completed form to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Your reports will be mailed to you within 15 days. Allow 2-3 weeks for delivery.
Can I fix my Credit and Increase my Credit Score?
It is important to note that raising your credit score is a bit like losing weight. It takes time and there is no quick fix. The best advice is to manage credit responsibly over time.
The following are tips to help you address your credit challenges and raise your credit score:
Pay all your bills on time – late payments and collections have a major negative impact on your credit score.
If you have missed payments, get current and stay current – the longer you pay your bills on time, the better your credit score.
Buying a Home (through the H2O program)
To buy a home through the H2O program, there are steps you must take to ensure that first of all you are eligible for the program and second and MOST IMPORTANT, that you will not be rejected for a mortgage loan. By understanding the importance of credit in this process (you cannot have “bad” credit), reviewing your credit report (especially with a legitimate credit counselor) and completing the required HUD approved 8 hour credit counseling and education session you should be able to buy your own home. Above all this home will be Green and Affordable for you and your family.
H2O will evaluate the financial condition and credit status of each applicant to determine if he/she is eligible for a H2O home. We offer Homebuyer Classes and specialized, experienced counselors that will work with the applicant to resolve most credit issues and obtain a home loan at reasonable rates.
