A Real Estate safe place
If you’ve been hesitant to buy Houston real estate because you’ve found yourself in debt, you’re not alone. According to Money Magazine, the average household debt in America in 2017 was reported as $134,600 for people aged 45 to 54. Whether it’s due to credit cards, student loans, car loans, or a combination of all these factors, don’t despair, there are many steps you can take to rebuild your credit and help you qualify for a mortgage in The Greater Houston Area.
The first thing to do is to evaluate the accuracy of your credit report by contacting the credit bureaus (Equifax, Experian, and TransUnion) [provide credit bureaus web addresses] to request a copy of your report and to find out your credit score. Review the report closely to find any incorrect entries such as accounts that aren’t yours, errors of missed payments, and/or outdated information (i.e. bankruptcies, tax liens), etc. You have a right to challenge incorrect or outdated information. To do so, write to each bureau and request the erroneous data be removed. They must then contact the creditor that reported the information. If the creditor does not verify it within 30-days, the credit bureau must remove the notation and send you an updated copy of your report. If the creditor reports the information as correct, the bureau will keep it in your file, however you have the right to add a 100-word statement explaining your version of the dispute.
TIP: If you are married and your financial problems are due to your spouse, ask the credit bureaus for a credit file in your name alone.
Negotiate With Your Creditors
Some creditors will remove debts from your file in exchange for full or partial payment. Also, some creditors will “re-age” your account by making the current month the first repayment month and show no late payments. Contact the customer-service or collections department of the creditor and make an offer to help get your payments back on track. If you’re told “No”, ask to speak to the supervisor.
Analyze Your Spending
Analyze your spending and compare it to your income. Make a realistic list of ALL your household expenses, and all other spending such as gas, entertainment such as movies, allowance for the kids, take-out food and eating at restaurants, shopping for home items and clothing, etc. and then compare it to your average monthly income. Subtract your monthly expenses from your monthly income to get an accurate gauge of your spending. If you see you break even or worse, are spending more than you earn, adjust your spending to beneath your earnings with the goal to have at least a$500-$1,000 to spare if possible.
TIP: To get an accurate look at your spending, look at your credit cards and bank statements. You might be surprised at how much more you are spending than you think!
Once the calibrated budget is established for a minimum of 60-days, target the overage monies accumulated to eliminate the smallest debt’s total balance. Dave Ramsey, Personal Money Management Expert, calls paying off the smallest debt and making your way up to the largest the “Snowball” effect. Your debt repayment is reason to celebrate, so bring the family together to toast your success and vow to never regress to your bad spending habits!
Announce Your Progress
With your new budget in place and current payments being made to help pay off your debt, check your credit file for missing data on accounts you pay on time. You can then add positive histories to your file by sending the three credit bureaus a copy of your recent account statement and copies of canceled checks (never originals) showing your payment history. Ask the credit bureaus to add the information to your file to help improve your credit rating. Although they aren’t required to, they often will to help you in your efforts to rebuild your credit. If you have been unemployed or were lacking a stable income, you can update your status by adding stability information to your file. Send the bureaus documentation showing steady employment, as well as other stability factors such as maintaining a long-term residence and establishing checking and savings accounts.
Federal law prohibits a creditor from refusing credit on the grounds of race, color, religion, national origin, sex, marital, status, age or because you receive public assistance. If you think you’ve been the victim of credit discrimination, contact: The Federal Trade Commission, Correspondence Branch, Washington, D.D. 20580l.
Build Your Credit
Credit cards can be good for your financial health. If you’ve held on to a credit card despite your financial difficulties, use it and pay the balance on time. An easy way to do this is to use your credit card where you would normally pay cash and pay that balance off right away. You will see your credit history improve quickly by doing so, and most importantly you will not be adding to your debt!
If you don’t have a card, apply for one. Many banks offer secured credit cards—where you deposit a sum of money and are given a card in exchange. This is a good way to avoid over spending and adding an unpaid balance to the card. Also, department stores and gasoline companies often provide credit cards despite negative marks in a credit file. Again, just remember this is not extra money for spending. Instead it is used as cash and paid off immediately to avoid debt.
If you are having trouble getting a credit card, it’s not just major lenders and credit cards that help build your credit. You can work with local merchants such as a jewelry shop or furniture store and ask to purchase an item on credit. Many stores may work with you in setting up an account—although a large down payment may be required and a higher than average interest rate assessed. Rebuilding your credit will not only help in your efforts to purchase Houston homes for sale, but also reduce stress and help you become better at managing your money more effectively!
Thanks for reading—and more importantly—implementing this, if necessary. I look forward to hearing your praise report.
I am D.1.2.Talk