I just joined and kind of over whelmed with the information but I have a question. I am working on my credit but it's pretty bad right now, how do I start with that hanging over me? Lorraine
Originally posted by @Lexi Teifke :
@Lorraine Reid Don't get discouraged one step at a time. Pay off debt. Start with the debts that have the highest interest rate. A local lender can really help you as well. They would pull your financial report and help you analyze. Let me know if I can help out anymore. TRE
Thanks for the advise, I really had no idea where to start. I have 2 ridiculously high interest credit cards, 29%.I'll get rid of that one first.
Welcome to BP.
Right before I bought my first house, my credit was awful. I had two outstanding credit cards totalling $6000, that had been sent off to collection agencies for years.
Believe it or not, I got pre-approved for a very low amount. I had been paying all my bills on time for the last few years. I rented an apartment, and was paying my rent on time. I also had a steady job for a few years at that point. I had worked really hard to start re-building my life, and I didn't want to get complacent with where I was at.
I found a house that needed a lot of work, I paid off a couple debts in order to get the house. Fixed it up, worked my a$$ off. Saved money, paid off more debt, and continued to come to BP and gain knowledge. Learned how to invest in a second property. By the time I got that second property I had all my debts paid off, and a credit score of 805. Now I receive multiple card offers in the mail, they go straight to the trash!
Goodluck, work hard, and don't give up!
That is so encouraging. Thank you for so much for sharing. I have my work cut out for me but I can say for the few days I've been coming to the webinars and now seeing people actually answering me, I'm even more encouraged and hopeful.
First, you need to fix your credit. Pay off any debt collections etc. Before you start looking to invest you need to analyze your financial situation. How did you get to this point with your credit? Were you overspending? Income issues? Credit is a reflection on how people handle their finances.
If you don't diagnose this issue now and start investing in RE you will just create a much larger problem down the road.
Welcome to the BP family! Glad you joined the best real estate investing website!
Wishing you the best!
Hi @Lorraine Reid . In terms of which Credit Card to pay off first, I have learned that in terms of your credit, your collection of cards are looked at as an total usage rate. So you if you 3 credit cards, with 400, 700 and 1200 limits respectively, they are scored as a total of your total balance/total limit. so don't necessarily freak out over the 29%. Take care of it of course, but understand that as your overall ratio decreases, your score goes up.
Also, I just used the Experian Boost feature and it jumped my score up 15 points instantly. Basically (and I don't know if Equifax and Transunion offer this) through Experian, you link Experian to your bank account and it automatically searches your history and finds all your not reported accounts that you have linked to your bank account. So it found that I pay for my AT&T phone bill and my internet bill and gave me 15 more points just for on time payment history. The other nice feature is that anything that negatively impacts your score, it either doesn't count or you can just remove the boost feature and your score returns to normal.
I am in a near similar situation as you. In 2 months, my credit increased around 45 points just from lowering my total balance, lowering my usage rate (I actually got notifications saying "your credit score increased due to lower utilization rate", and from the Experian boost feature.
Remember this is a community of people wanting to help you as well. Network with people in your area on here! I have met a couple people on here and I am getting ready to meet with someone next week just to connect, have lunch and learn more about what they do. You may come to find that the route some people took to get to their first investment opportunity had little or nothing to do with their credit score at all.
I hope this helps a little.
Oh wow so much information, thank you. After reading your response I did the boost and my score went up 5 points. I don't feel as alone or like okay I'm a member now what. It would be nice to meet and network with people in Denver. Thank you again for the wealth of information you've provided. I have printed this post to put in my "credit book" for me to refer back to.
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