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Credit Repair For Veterans

How It Works: Veteran Credit Repair 

 

Buying a Home with a VA Loan: 8 Mistakes to Avoid | Mortgage Solutions Financial

No matter if you are a member of the armed services or a civilian, almost every lender will require a minimum credit score when accepting financing inquiries. In today’s blog, we will go over how credit works for veterans, observe potential loan options and take a deep dive into repairing your credit!

 

Know Your Options 

Before we get too far ahead of ourselves, we need to talk about potential uses for your credit score; primarily acquiring financing. It is best to research all your options before settling with a particular lender. Even veterans with exceptional credit scores and a large down payment can benefit from comparing loans. 

 

Understanding Your Finances 

The first step to reaching your credit goals would be to consider your financial stability before making major credit decisions. Setting a financial plan that matches your situation is important to safely establish and repair your credit. Assess both positive and negative financial habits and question if they are leading you in the right direction.  

 

Personal and Business Benefits 

If you are looking to buy a home, veterans are eligible for a VA home loan! A VA home loan often does not require mortgage insurance, has flexible underwriting requirements, and requires no down payment! If you are looking for more information over VA loans, you may want to utilize the Veterans Benefits Administrations website. 

If you are looking to start a business of your own, then an SBA 504 loan is what you are looking for! These loans are designed to help you buy equipment and commercial real estate for small business owners! Alongside an SBA 504 loan, there are many grants, business development programs to help veterans reach their financing goals (many of which are backed by the U.S Small Business Administration). 

 

Taking A Deep Dive into Your Credit Score 

How Do I Improve my FICO® Credit Score? | Enterprise Bank

One of the most important steps when assessing your financial plan is to review and understand your credit score. Your FICO score is the determining factor when it comes to a lender accepting a financing inquiry. Your FICO score is made up of several categories, each with a different weight . 

1- Payment History (35%): Your payment history is made up of each open tradeline reported under your name and considers each individual payment made and missed over the accounts lifetime. 

2- Available Credit (30%): Your available credit is the amount of credit allowed by each lender from open cards and loans. 

3- Length of Credit (15%): Your Length of Credit views how long you have held each open account on your profile. New credit lines also have an impact here as well. 

4- Types of Credit (10%): The types of credit on your report include credit cards, mortgages, car payments and sometimes even utilities! 

5- Credit Inquiries (10%): This is how many times you have recently inquired about financing or for new tradelines. 

 

Credit Repair Options 

There are many ways to improve and repair your credit on your own and with the help of experienced credit experts. One of the best ways to help your credit is to make sure you are consistently making payments on time, pay down any outstanding balances and limit your credit utilization below 30% of your available balance. Take in mind, the lower your credit utilization, the better your results will be! 

 

Author- Joe Peters 

Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help. 

If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair. 

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4 Ways to Build Credit Without Credit Cards

Building Up Your FICO

Understanding and building credit in a positive way takes discipline and some education. Do you recall being taught in school, how to build your credit scores? Did your teachers let you know how big of a role credit would play in your life as you got older? Honestly, it is probably likely that even while going through the process of applying for a credit card or car loan, you were still unsure of what your credit scores really meant.

So what is a credit score made of?  Your FICO is determined by the categories below on the pie chart. Payment history and amounts owed on your credit make up the two largest portions of your scores. What if you do not have credit cards? There are a few other options for you, so that you can still fulfill parts of the FICO scoring model.

Facts on Fico

The Importance Of Credit

Can you imagine not having access to a bank that could lend you money for your home or car? Credit is so important for everyone, whether they have a credit card or not.  A lender or banking institution pulls your credit in order to see how reliable and likely you are to default on your loan. If your payment history is bad or you are lacking credit history, it is hard for them to lend to someone that they cannot be sure of. If you are someone that has no credit score, that is almost as bad as having bad scores. It is hard to justify lending to you when they are not sure how you use your money or pay your bills.

The Typical Way To Build Credit-Credit Cards

If you are opening your first credit card, your bank is usually open to issuing you a credit card with them. This credit card is not to take on your next shopping spree, but small purchases like filling up your vehicle. Many people open up credit card for “emergencies” only, while some use them and live outside of their means. Credit can end up getting you into large amounts of debt if you are not careful and capable of setting limits for yourself. So what are a few other ways to start getting a score, without the card in hand?

Other Options Besides Credit Cards

Become an authorized user

Parents trying to help their children build and establish credit usually allow for them to become an authorized user on a credit card. Prior to adding your kid on the credit card of your choosing, take a look at the length of history and the payments on all of the credit cards you have. If you have an old card, with no late payments and great credit history this is the best one to add your child to.

Young adults trying to establish credit should talk to parents or family members that will allow them to be added to a card as an authorized user. Understand that at no point do they give you access to the credit card but rather, you are just now benefiting from their positive history while having to make no effort or open up new credit lines.

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Report Monthly Bills

Are you currently renting and paying your bills on time? There are now many companies that will allow for you to have your rent reported. It can be very frustrating to constantly pay bills that are not showing up to show your credit worthiness, so many companies have listened to consumers and now are helping them out in an effort to eventually get a loan.

Join A Credit Union

A starter loan at the credit union works about the same as a secured credit card does. In order to build, the consumer deposits their own money to get started. The funds are not immediate but secured in a savings account until the term is complete. Making payments on this credit building loan are most important as again, positive payment history makes up 35% of the FICO pie chart. These are usually shorter terms (12-36 months) just to begin building credit. Often times, proof of income is required as well.

While it may seem a credit card is the only way to build credit quickly, that is not always the case. There are other avenues to take rather than signing up for the first credit card that is dropped in your mailbox. If you don’t trust yourself to avoid those credit card solicitations visit this site to keep from receiving junk mail and credit cards filling up your mailbox.

 

Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and go through a free consultation please give us a call at 1-800-994-3070 we would be happy to help.

A Note From The Author: The opinions you read here come from our editorial team. Our content is accurate to the best of our knowledge when we initially post it.