How do I get past the Credit Score issue?

Question

Ive flipped the switch and ready to take off.  My credit score is 548.  How do I get past the Credit Score Monster?

Tracy in Austell GA

Tracy L Suttles · Answer

I disagree.  RE is exactly for me and Ill tell you why.  I am going to be the measure of my Own success and directly responsible for it, something rarely attained when working for a company.

Daniel Kong · Answer

@Tracy L Suttles Way to take ownership of your life dude. I'd suggest researching how credit works. Its pretty straightforward once you get into it. For instance, If its credit utilization % that is lowering your score, you can move money around or pay off some bills and your score will shoot up instantly. With responsible spending, and working the "Credit system", you will be able to get your score up in no time.

Josh McCullough · Answer

Also, hard money lenders can look past credit scores if you're looking to get a hard money loan to fix and flip or hold rental properties.

Joe Splitrock · Answer

@Tracy L Suttles I have looked at a ton of credit reports and 548 is pretty low. Usually their are current late payments and unpaid debt in collections when it is that low. However, once you get current on all payments and pay off collections debt, your credit repairs fairly quickly. So that is my question is are you current on all debt payments and have you cleared any judgments by negotiating pay off? If you have done that, then it is just going to take some time. Paying with credit cards will help rebuild, so sounds like you are taking good steps. Car loans are good too at rebuilding, because of the installment payments.

The big thing is NEVER BE LATE on your payments. Build up an emergency cash fund before you start investing. You are moving in the right direction but not quite there. Keep it up.

Mark Burlison · Answer

use a pro....and you’ll get repaired quickly. Lots of tricks and they know them all.

Tracy L Suttles · Answer

@Tom S.  My score dipped when I bought my current house via FHA, 1st time homeowner and then 8 months after my purchase I was hospitalized for 6 days with a Staph infection in my lungs.   Take a guess what 6 days in the hospital did to what little savings I had.  Yes I have medical coverage from work but at 80/20 coverage I had huge out of pocket.  I fell behind on everything and my credit score tanked. Fast forward to today and I am mostly caught up and realizing that there is a better way to become financially secure out there.

Tracy L Suttles · Answer

@Daniel Kong Thanks Daniel!   Your are correct and I have as of last week implemented credit repair supercharging.  Using my 2 credit cards to pay my bills instead of direct deposit, I put my paycheck on the CC then use the CC to pay my bills.  This should inject a healthy dose to my credit score and while making the monthly payments on them at the same time. Note this is a temp solution to boost my credit score.  The plan is to make my success in REI so that CC can go back to being for emergencies.

Tom S. · Answer

@Tracy L Suttles  Why is your credit score low?  Lack of credit or late payments?  Lack of credit is fairly easy to address, open a secured credit card or two and score will rise quickly (assuming not maxing it out and paying on time).

Once you're up to 620 you're eligible for FHA loans (although I've heard some lenders going to 580).

Owner finance deals could be other ways to get started, although cash reserves are critical to handle the business end of things.

Good luck!

Tracy L Suttles · Answer

Thank you Jeff that is indeed my plan.  I have the drive but living paycheck to paycheck is on of the main drives in becoming a Real Estate Investor.  The "doing" part of repairing credit is easier said than done.

Tracy

Jeff Kehl · Answer

@Tracy L Suttles 2 ways.

1) Fix it. Credit scores can be corrected fairly easily assuming you have some income and the desire to do so. There are companies you hire to do it or you can do it yourself by understanding what goes into a credit score and working on the components.

2) Get a partner with a decent credit score. If you can find deals, go to a rei meetup and find a money partner/borrower to partner up with.

How do I get past the Credit Score issue?

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