Credit scores that are lower that what is needed to qualify for a home loan can be analyzed to determine what the best approach is to improving the score in the shortest amount of time.

This is NOT a credit repair service pitch – credit repair is best done by the individual who owns the credit score.

Credit scores are calculated by software programs called algorithms – there are many different forms of algorithms that calculate scores, depending upon the situation the score is being used for.  That is why you might see one score when you pull your own report directly from a credit bureau versus a different score that we might receive when running your data through a mortgage specific algorithm.

However, there are several things you can do to improve your scores.

  1. Pay your bills on time.  Even if this means making a minimum payment on your bills, pay every single one on time.
  2. Pay your balances down.  This is where a lender might be able to give you some insight as to how best to pay towards any balances to maximize impact on your credit score.  Our credit report providers have programs that allow us to model and simulate the potential impact of certain actions on your credit score.  So, for example, if you have 3 credit cards each at their maximum limits of $5,000 each and have $5,000 to allocate toward the debt, we can simulate the best allocation of those funds to maximize the increase in your credit score.  We can look at paying off one balance in full versus distributing the funds between all three balances and any scenario in between.  It’ll cost you under $20.00 to have this done and can be well worth the expense if you are looking for maximum impact.
  3. Don’t close any existing accounts – closing existing credit lines reduces your overall credit available and increases your utilization ratio.
  4. Don’t open any new accounts – new accounts create a temporary reduction in credit score.
  5. Pay off any ACTIVE collection accounts – before paying these off, check your credit report to see if the collection is still reporting as active.  If not, leave it be.  If it is reporting as active, contact the creditor before you make any payments.  Offer to pay the debt in full in exchange for a letter of deletion.

Most importantly, stay in contact with your loan officer.

I had a client recently whose credit scores were in the mid 500’s due to some active collection accounts.  The client called the creditors, paid the bills in exchange for a letter of deletion and in 2 1/2 months, increased the credit score to just under 700.  This can be done…by you…not a credit repair agency.

If you’d like some help with managing your credit report to within qualifying guidelines, send an email message to or give me a call at (800) 680-7875.  Your credit report will cost a little under $30.00 and the simulation will cost right around $20.00.  My time is complimentary.