Ep. 90 – Credit Repair For 300-669 – “Bad” Or “Fair” Credit Scores 

 April 29, 2022

HBH 90 | Credit Repair

Can you buy a home with what the credit bureaus call fair or even bad credit? Yes, you can, but you need credit repair ASAP. Why? Because, like it or not, credit scores matter when you are looking to get a loan for your first home purchase. There are many simple action steps that MANY How to Buy a Home listeners have used to jump 25, 50, or even over 100 points to get them set up to be ready to buy a home. Use the tips that have worked for other real people just like you!

Credit Repair For 300-669 – “Bad” Or “Fair” Credit Scores

First Time Home Buyer Tips For Getting Your FICO Score In Position For Your Best Loan Approval

Can you buy a home with what the credit bureaus call fair or even bad credit? As a matter of fact, you can. There are loan products with credit scores of 580. That is awesome, but even better, you can get better products and pricing every twenty points from there. You save money as you keep going up with your credit score. The best plan is to raise your credit score immediately because it takes some time to do that. While you are saving up your down payment, at the same time, we are going to give you some tips to help you level up.
What’s up, my How to Buy a Homies? I am here with another quick blast of education to help empower for what will likely be one of, if not the biggest purchase of your entire life. Do not panic. I got you. Together, we are going to crush the confusion. Credit scores in buying a home is muy importante. The higher your score, the better the loan program, interest rates, and overall approval. It affects all of that stuff when you are going out there to try to buy a home, get approved to purchase, and get the loan to buy the home. Your credit score affects all that stuff. That means that even a bump up of 20, 30, 40, 50, and 75 points could save you tens of thousands of dollars. I am talking about every single month you are going to be saving.
It is exciting stuff. Can you believe it? I am a dork. Credit scores are exciting. I am going to focus on tips for people with fair or bad credit. Do not worry about it. If you are bad, there is nowhere to go but up. I am going to give you a big leg up and help you get back on track. Let’s level up and let’s have all the big scary banks see you as a responsible borrower. Do not worry. They are not going to look at your TikTok, so they are not going to know the real you.
[bctt tweet=”The higher your credit score, the better the loan program, interest rates, and overall approval.” via=”no”]
Speaking of TikTok, follow @HowToBuyAHome on TikTok, and @DavidSidoni on Instagram for more tips. If you have not subscribed to this rocking show for your eyes right now, come on, let’s go. Here are our top ten tips. Time is number one. It is your best friend when it comes to fixing your credit. Number two is the magic bullet, the authorized user. Number three is strategic managing and paying off that stupid debt that you got into that got you here in the first place. Number four, ask for more. Number five, pay on time. Number six, fight the power and dispute. Number seven, eat the frog. Deal with your collections. Number eight, secure your future with a secure credit card. Number nine, get credit for paying rent, even for your utilities. Number ten, mix it up with your credit.
A lot of times, you are going to see ads out there or people talking about credit repair with the headlines that say, “Raise your score 100 points.” I know what you are thinking, “Is that even possible?” If your score is in the fair or bad areas, then that credit score range right there, you have got lots of room to grow and you could see an increase in numbers like this. You can do a lot of this stuff on your own. My friends at NerdWallet, which is a great place for real, honest, rad financial advice, quoted Rod Griffin. He is the Senior Director of Public Education and Advocacy for one of the credit bureaus, Experian.

Time Is Your Friend

He says it is possible. This is what he said, “The lower a person’s score, the more likely they are to achieve the 100 point increase. That is simply because there is much more upside and the small changes can result in greater score increases.” Number one on our top ten list, and this is one I cannot emphasize enough. This is a huge tip for all things planning when you are looking to buy a home. It is time. Time is your friend, but only if you jump on it right now. Take action now in everything when it comes to buying a home, saving, reducing debt, planning, education, and researching, but especially in fixing your credit.

HBH 90 | Credit Repair
Credit Repair: The sooner you start working on your credit score, the sooner it gets fixed.

Fixing your credit is not just you that starts things. You are relying on other people and other people do things at their pace. Fixing credit takes time to get things corrected, validated, adjusted, scored, rescored, calculated, and reported to the credit bureaus, and then the credit bureau has to do something about it. This takes time, so get off your booty and get to work. It is not going to fix itself. The sooner you start working on it, the sooner it gets fixed. Think of it this way, a bad or fair credit score is like a sickly plant that you are letting wither away in the corner of your crappy apartment that does not have enough light. You started listening to a podcast to help you get the hell out of that lame apartment.
You have ignored and neglected it. You did not water it and now you are going to have to water it and put it in the sun today. The sooner you do that, the sooner it is going to get healthy. The longer you wait to do that, the longer it will take before it can blossom. If you want to wait, and then one day you realize, “I need that plant.” If you go and dump a whole bucket of water, hoping that it springs up and sprouts into a mature plant in a couple of days, you are going to be bummed out. You are probably going to lose your security deposit in your stupid apartment because you caused water damage to the floor underneath the plant.
It takes time to nurture it back from the sickly, bad, or fair score in this metaphor. It takes time to get it back to normal, to what we would call a good score. If you start early enough, you may even have enough time to go from good to excellent because a good score with these tips I am giving you is going to have a chance to be an excellent score. The only thing a credit score, a plant, or crops need to grow is time. A good or excellent score, which grown with time means that you have the big O. The big O is for Options. The big O means that you have choices to be able to make better plans to save you more money when you want to buy a house.
[bctt tweet=”Time is your best friend, so start acting now.” via=”no”]
If you are feeling desperate like there is nowhere to go or you want to go 100 points up, that is dope, but remember, time means that you need to start right now. Get going. I am serious as a heart attack about this. It is easy to get discouraged. It is even easier to feel like you are doing something when you are paying everything off on time. I understand maybe you have not been doing that in the past, so now you are like, “I am doing something now. I am paying things off on time.” That is the bare minimum. I get it. I get that that feels like a win, but I am still on number one of our tips. There is a lot more that we can do to help improve your credit score.
If you tune in to the show, I am not going to give you one tip and say, “Good job. Now go out and buy a mansion.” There are lots of things we can do. To get real results, you have to try multiple things at once, doing all these tips at the same time. The longer you have these tips working and in place, the higher your score grows and feeds the plant. Stick with me. Focus. No distractions. Results do not come to the active. They come to the proactive. Get off your butt now because I am not some infomercial trying to get you to buy something at the end of the commercial. This is all about you. At the end of this commercial, you go out and you raise your credit score. That does not do squat for me. This is your life.
We are trying to improve everything for you with the tips that anyone could and should have told you a long time ago. They should have given you this advice for free. Credit repair takes time. The sooner you start, the higher your score will be when you want to go buy a home. If you want to download this episode, it is at HowToBuyAHome.com and then put it on your fridge. The list is right there. I am so freaking serious about this that I am going to explain it this way. If you have bad or fair credit and you are saving for a house, sometimes I recommend that they have a side hustle to put money in a separate account for the down payment.

HBH 90 | Credit Repair
Credit Repair: Strategize and get your utilization at the proper levels.

I know credit takes time and it is important. I would recommend that if you did that and you had zero for the down payment, and your credit was bad or fair, I would tell you to save a little bit then I would recommend you suspend that side hustle building your savings and replace it working 30 days on your spare time on these ten tips for credit. It is that important. I am getting fired up and passionate. You can complete all these tips in 30 days and take advantage of the time to watch your credit score grow even more. In the big picture, the few hundred bucks that you would have made on that side hustle is going to be a fraction of the money that you save with the time that you utilize when you are building your credit score.

Become An Authorized User

This is your side hustle. Put it on the fridge, list it, and do it time. The more time, the better. The worst part is figuring out what to do. I did all that work for you. No excuses. Tip number two, become an authorized user. The holy grail of credit tips. This is not for everyone, but if you have a relative or a good friend with a credit card, a high limit, good and long payment history, then you can ask them real nice if you can become an authorized user. This is the magic trick. I go way into detail on this in episode number three. It is my very first credit episode. It is a huge bump in your credit history and a big deal.
The account holder does not have to let you use the card. It does not affect them at all. They do not even have to give you the account number and your credit score is still going to improve. It is magic. It is my second biggest tip behind time. This is the fastest and easiest way to bump up your score. I warn you about housing finances. If it sounds too good to be true, it is BS.
[bctt tweet=”The best way to stay motivated for a long day of working hard is to handle your worst things first. ” via=”no”]
This is the exception. It is not the exception because it is BS. It is the exception because it does sound too good to be true, and it is. It delivers ungodly results. I have had several people jump 40, 50 and 75 points with one phone call to mom, dad, or their weird old uncle. When episode three came up, I did this myself as a test and my score jumped massive points. I had talked to my dad for 45 minutes to convince him it was not going to hurt his credit, but that is another story. It happens quickly, which means that your plant is going to magically grow overnight.

Strategize Your Payments

Tip number three, strategize your payments. Your available credit is called your credit utilization. You need to strategize and get your utilization at the proper levels. Pick your highest interest rate card, work down to lower that to less than 30% of the usage or your utilization, and then do not close it. Never close it. History is something important that we need to keep going.
Once you get that one below 30%, move on to your next card and so on until they are all under 30%. Start back at the beginning and repeat the cycle, taking them all down to 7%. At less than 30%, you should see a jump in your score, and then when you knock it down to 7%, that is the sweet spot to get you in the good and excellent categories. Make all your payments a few days or, if you want to be extra careful, a week before your balance statement date. You can find that on your statement online because that is when the credit card companies report your balance and your available credit to the credit bureaus. That is a tip in a tip, and here is another one, automate it.

HBH 90 | Credit Repair
Credit Repair: Having a good mix of credit will be better for your score in the long run.

Automate everything like your bills and savings. It is the easiest way not to spend money. I love automation. It is something everyone should do to help them when they are on a plan. If you are trying to live your life and you want to make sure that you can still go out and do fun things, it is the easiest way not to spend money on the weekend that you should not be if you have all your bills automated to be paid every Friday morning. That way, when you check your account balance before you go out on the weekends, suddenly, you are going to realize your better plans are to go to Costco, buy your booze, and play games at your house with your friends instead of hitting the club.

Ask For Higher Credit Limits

Tip number four, ask for higher credit limits. Guess what it takes to get higher limits? Time. The sooner you start showing them you are responsible, the longer that you have a better track record, the more likely you are to get higher limits, which raises your credit utilization numbers.

Pay On Time

Tip number five, pay your bills on time. It sounds stupid but I have to make sure that this tip is thrown in there. It is not going to necessarily raise your score but it will keep it going up little by little over time. Nothing major here, but here is the trick. Not paying your bills on time can drop your score fast and takes you backwards.

Dispute Credit Errors

Some late payments can stay on your credit score for seven and a half years. Most do not report them until they are 30 days late. In case of an emergency, you do have some time, but you are not going to have to worry about it because you have already automated your payments to go out before your billing statement date. It is never going to be a problem for you. Tip number six, dispute credit errors. Fight the power. Almost all credit reports have mistakes. This should be the most scrutinized and regulated industry in the world since it affects every aspect of everyone’s life, but it is not. Teachers should be paid a lot more too, but they are not.
Accept it and then go find your errors, understand where those mistakes are, and then fix them. You are entitled to free credit reports from each of the three major credit bureaus. It is on AnnualCreditReport.com to request them. Go in there, ask for them, and you can check for your mistakes. Some of the mistakes you might see are payments marked late when you paid them on time. Someone else’s credit activity mixed in with yours, some dude with your name who has not paid his bill on his old Netflix account or negative information that should have been dropped off and is too old to be listed on your credit report. Fight them. Call the bureaus and dispute.

Eat The Frog

Tip number seven, any collections on your report, eat the frog. In the business sales world, there is a guru named Zig Ziglar. He used to say, “The best way to stay motivated for a long day of working hard and getting people telling you no all day long to keep that good energy going is to handle your worst things head-on first thing in the morning.” Eat the frog and the rest of the day seems a lot easier. Do your saving. Pay off your collections. The longer they are gone, the higher your score goes up. Once again, time is your friend. If time is your friend, you have got to do all the bad junk first. Eat that frog now. Save for it, eat it, then pay the collections and let the time do the work. We go on to the next steps.

Use A Secured Credit Card

Tip number eight, use a secured credit card. If you are out there and you realize that you cannot get a regular credit card because you have got bad credit or fair credit, save up $300, $500 or $1,000, go to NerdWallet and they are going to tell you the best credit cards. Bankrate is also a good place for that too. They are going to give you some options that will give you a secure credit card by giving them the money upfront and then using your own money to buy things. Pay it off regularly until you earn enough credit from the credit card for them to give you an unsecured card and turn it into a regular old credit card.

Bump Up Your Score

Tip number nine, bump up your score with your on-time previous rent payments and utility payments. There are rent reporting services that can put your rent and some of your utilities on your credit scores and boost your FICO with some of those credit bureaus.

Mix Up Your Credit

Tip number ten, mix it up. The credit nerds like a good mix of credit like my nineteen-year-old dude who bought a home a couple of episodes ago. When he turned eighteen, he went to go out to get multiple credit cards so he could build some credit. All his friends told him, “Credit cards are the devil and they are going to haunt you forever.” He said, “They don’t. Do not be dumb.”
There are cautious credit cards for bad credit and fair credit. There are also credit builder loans that can do the same thing. That is a good way to mix up your credit. If you have only got one card and you have got a low credit score, you will need time anyway. In this time period, take the time to take the small hit that you will get for a credit inquiry to make sure that you get a new card so you have a good mix of credit. You can use both cards to pump your score up, and eventually, that inquiry will go away and take that little small hit. Having a good mix of credit is going to be better for your score in the long run.
Those are the ten tips they should have taught you in high school. It sure as hell should have been taught to someone in college when most get into their bad credit, spending, and debt habits. It is still haunting them when suddenly they get out of college, they call me and go, “I have to be an adult and I have credit card debt.” If it is your first time here, subscribe and rate the show. If you did get any value out of this, please drop a review so this show gets more attention and more people can find this information that you should have been getting anyway, but I am going to be giving you for free.
We want to help it improve the lives of others and reviews help us do that. Check me out on TikTok, @HowToBuyAHome and on Instagram, @DavidSidoni, and everything that you are looking forward on how to buy a home is at HowToBuyAHome.com. That is it. I am done because you have got some work to do. Eat the frog, put it in the fridge, and you can do this.

Important Links

This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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