Questions regarding Credit Score & Real Estate

13 Replies

Hey BP nation,

How do you raise your credit score?

How do I get rid of hospital bills on my credit?

Whats the score you need to have in order to get approved for the best interest rates?

How many times does your credit score get ran while trying to buy a multifamily house?

If you don't have credit karma, sign up now. You can monitor your score for free and they provide tips on how to improve it. Also check out selflender.com they set up an account where you deposit a small amount in a CD that pay interest, you make a payment, to yourself, every month that is report to all three credit bureaus, after 12 months you get your money back with interest and a great payment history.

To get rid of hospital bills, see if you can find a local person to negotiate them for you, or do it yourself. If they have gone to collections they are especially easy to renegotiate as they arent tied to a specific amount of money like if you defaulted on a loan. It might be a long call, but if you are prepared you can get those amounts reduce to 20 or 30 cents on the dollar.

The best rates are usually at 740 and above, although different banks have different criteria.

Should be run once on a purchase.

Your going to get preapproved initially by the bank. That will be your hard inquiry. They may do a soft inquiry prior to your clear to close. You most likely will need a 640 credit score at a minimum to get an FHA loan. You will get the best rates at 740 and north of that.

Medical bills, you will have to pay, negotiate a buy out with them, or declare bankruptcy. 

As far as Credit Karma goes; it sucks.  It shows what is contained on your credit report, but the numerical score is off quite a bit.  I have a subscription to monitor all 3 of my credit reports in real time directly through one of the credit bureaus.  Credit Karma is very rarely in synch with my actual reporting. 

Thanks for the intel Brandon, do you find the reports you get match the real bank score. I got a huge shock and was 60 pts lower when bank ran my credit for mortgage even though I paid Transunion for correct scores. They told my they only show people the "consumer score", do you know if this is true? Have a great day and thanks for your time, Jeremy

@Jeremy Elcox There are several different modeling structures for credit scores that weigh components differently. Have spent many years in the car business I can tell you there is always a discrepancy between your "Classic" modeling score and your "Auto" modeling score for instance. Buyers would often tell me they just pulled their credit recently and the score was X points higher, that's the reason.

Hi Luis,
From my own experience DO NOT RUSH to declare bankruptcy. It's the last option (it's the worst thing effecting your credit) and only if you have judgments against you and you have assets, discuss it with an attorney most bankruptcy attorneys will give you one free consultation. (Get two or more opinions)

For bad credit I have used a company called Lexingtonlaw.com its a monthly subscription they review your file and explain all options how to fix your credit and I had great experience with them cleaning my credit.

All the best
Izzy

 @Luis valdez, to find what credit will be run you need to check with your personal mortgage dept. The best source for info is the bank you will be using and maybe ask 2 or 3 to verify. I do agree on bankruptcy is worst possible thing unless losing assets. I DISAGREE on paying any company to assist with credit. They are a total scam and can not do magic...you can do the exact same thing for free. I wish you the best luck getting your stuff straightened out. Never give up or feel down just do 1 thing at a time and always look at it as simply fixing a problem. J
 @Luis valdez, to find what credit will be run you need to check with your personal mortgage dept. The best source for info is the bank you will be using and maybe ask 2 or 3 to verify. I do agree on bankruptcy is worst possible thing unless losing assets. I DISAGREE on paying any company to assist with credit. They are a total scam and can not do magic...you can do the exact same thing for free. I wish you the best luck getting your stuff straightened out. Never give up or feel down just do 1 thing at a time and always look at it as simply fixing a problem. J
Credit karma shows your vantage scores, which isn’t what actual lenders go by. Check out the app myFICO. It’s about $30 a month, updates in real time and will show you your fico 8 scores. For an extra $10 a month it will show you your mortgage scores, auto scores, credit card score etc. These scores will update ones a month. I highly recommend this app.

Thank you Michaela, I used a few places and wasted a lot of money to keep track and learned the hard way. I think lack of financial education is one of our country's biggest failures in the last century. 

Check out creditboards dot com. You can learn anything you need to work on your own credit. But be aware, you'll be overwhelmed, because there's so much info. No company will ever care as much about your credit as yourself. 

I'd be careful about letting mortgage brokers or banks run your credit just to check - every hard inquiry might lower your score further. 

Also, in regards to paying off some items. Keep in mind that the 'last activity' date is the date that sets the 7 years in motion. So, if you owe something and your last payment was made 4 years ago, then that looks actually better on your credit than if you suddenly pay it all off, because now the last activity date is NOW and it looks to the score model as if you're in financial trouble NOW. Once something is coded as a charge off, paying it off will not change it from charge off. It only moves the start day of the 7 years to more recent time. 

@Michaela G. Do you have a source for this? I was under the impression that this was a common misconception and that derogatory accounts actually stay on your report for 7.5 years from the original delinquency date. Please correct me if I am misinformed. Thank you!

@Michaela Manco , no, I don't have a link. Have done credit repair a few years ago and learned all from creditboards. If that's changed then I haven't heard about it. 

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