How It Works: Veteran Credit Repair
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
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.