Jim Waddell
Jim Waddell

Jim Waddell

  • (404) 405-0676
  • (404) 843-2500

Credit Secrets

Good Credit / Bad Credit / Slow Credit / No Credit

Given a decent payment history, time fixes most credit issues where you can qualify for a home loan.    Bankruptcy and foreclosures will impose what amounts to a time penalty.

Companies used to offer to Repair your Credit...This practice is ILLEGAL.

They Do Not Pass Go, They Go Directly To Jail

This so called repair was accomplished by flooding the credit bureaus with disputes.

Your creditors had to answer each of these disputes within 30 days,

or it must be removed from your report.

So, what are the real rules the credit bureaus use to compute your score?

It's a SECRET...

1. The biggest way to improve your credit score is to pay your bills on time.

2. There is a credit hit when you load up a credit card over 1/3 of your high credit limit and another at 2/3 full. Spread it out among several cards. Then pay them off every month. Your creditors will consider you a deadbeat since they make no interest on your outstanding balance, but so what!!!

3. Now for a pop test: You have 10 bills each month that are $10 each. You owe $100 each month. This month you only have $90. What are you going to do? You may say, pay each of them $9 to keep them off your back. But, how many hits on your credit report will this be? 10 So, instead, pay 9 of them their $10, and STIFF one of them. Now, how many credit report hits are there?????? Just One.

4. Do not close any accounts, even if they have a zero balance. This is a credit hit.

5. Do not go shopping for your new furniture and open up an instant credit account at the local furniture store. This is a credit hit. Shopping for a loan at a "lender of last resort" where they market it to numerous companies to see if anyone wants to loan you money is also a hit.

6. You, yourself, are allowed to dispute anything on your credit report and make the creditor prove to the credit bureau that you owe the debt or it must be removed.

What criteria does a loan officer use to pre-qualify you for a loan?

1. Your Credit Score: > 620 is the Magic Number now. If your mortgage credit score (Yes, there are the scores you get to see, and there is the mortgage credit score, which is scored tougher) is lower than 620 , you need to use Credit Doctor to see what you need to do to improve your score. If you have no credit, Credit Doctor can show you how to build credit. The better rates require at least a 680. Some rates require you paying discount points to get that rate. 1 point - 1% of loan amount.

2. Your Income: This is your Adjusted Gross Income you report to the IRS. If you are self employed, you will need to supply at least 2 year's tax returns while self employed. If you can't show it as W2 income, it does not count.

3. Assets: Your down payment must be in the bank where it can be verified. It must be "Sourced and Seasoned" (sitting in the bank) for at least 60 days. They will want to look at your bank deposits for your last 2 statements. If you got the money from a rich uncle, it needs to sit for 60 days.

4. DTI: Debt to Income Ratio (see table above), i.e., Monthly Income vs. Monthly Expenses.

5. Value of the Home: The appraiser is required to use any foreclosures in your neighborhood as comparables. If there are questions about the value, the lender must use a National Appraisal Service, and you may get an appraiser that has never been in the county and unsure of local values.

6. Time on Your Contract: It may take 30-45 days to get you approved for a loan. Make sure you have a L O N G Due Diligence Period or have a Financing Contingency specified in the contract that has a long enough time frame for you to get approved.

No Credit??????????  Slow down.

 

The solution:

 

Go to www.bankrate.com and search for a secured credit card.

 

Look for one that has:

 

1. No application fee

 

2. No annual fee

 

3. No required gotcha insurance policy that will eat up your deposit

 

4. Will convert to a real credit card in 1 year

 

5. Reports to all 3 credit bureaus

 

6. Does not report it as a secured credit card

 

Having problems finding a card that does not fit my criteria??

Call or email me and I will tell you where to apply for a local credit card.

They did not want their identity revealed online.  If you do qualify, GREAT!!!  It may be a credit hit if you get turned down, but, So What!  You already knew you could not get one.

Metro Brokers Financial, Inc., 5775-D Glenridge Drive, Suite 200, Atlanta, Ga. 30328 A Georgia Residential Mortgage Licensee # 5892. NMLSR Unique Identifier # 163853. 404-847-2525