Your credit score has neverheld more weight than now! The current lending and economic crisis has caused lenders to demand high credit scores more today than ever before. As recently as two years ago, if you possessed a 615 credit score you could find great conventional mortgage financing. Now, lenders will give you a better rate if your score is less than 730 depending on the kind of loan transaction. If you fall below a 620, you can assume you’ll be denied a loan by 95% of the lenders still in existance. And, if you are a 615 or a little higher, FHA is almost certainly going to be the only option available to you. I just recently originated a loan for a personclient with a 716 credit score and that client could not get approval for financing with a 3% down payment on a conventional loan. This is amazing to me, but the people that insure mortgages have determined that risk is not what they’re into anymore. In my vision as a lender, this person was no risk. Her debt vs. income ratio was fine, she had money left over in the bank, and she was over a 700 credit score. Unfortunately, the mortgage insurance companies required her to put 5% down anyhow!

So, as you can see, your credit proile is really signifiant. If there are many inaccurate items on your credit report (and it is commonly known that seventy-five percent of people have inaccuracies on their credit reports), then you need to do something about it because the few hours you would spend fixing those errors will save you thousands! Literally!! For an automobile loan, it could be the difference between the 25% interest buy-here/pay-here automobile loan and the nice six and a half % loan from a bank. On your mortgage, the difference could be as much as 2% on your interest rate and could save you from shelling out an origination fee to the lender. Over the life of the loan you will save thousands and thousands. You would also save cash on the closing costs.

If you actually don’t show any derogatory credit but your score is just not so great, it is likely because the balances on your accounts are too close to their limits and/or you have taken out a loan recently. The standard rule of thumb is that your revolving credit balances should only be equal to 30% of your credit limit. So you must pay down a large chunk of your debts. If you have taken out new credit, only time will improve your score. You must make the on-time payments on the new debt before the credit reporting agency will award you a betterhigher fico score.

If your credit report is all ‘messed up’, then you need to think about seeking credit report disputing. You have pretty much  2 options for this: do it yourself credit repair or going with a credit repair service. Both will work, but in my opinion, credit repair companies cost too much for what you could accomplish by yourself.

What it boils down to is this: the credit repair companies know how to generate the an entire credit letter batch in mere minutes and they almost certainly have an automated way to create the letters you need, or they hire minimum wage employees to type in your dispute data. Credit repair companies can take  the headache out of the process, but from my professional viewpoint, they are just accomplishing what you could have done by yourself. This is clearly your judgment call. If you have capital to waste, sign on with a credit repair company. If, on the other hand, you are on a thinner budget, you really ought to consider do it yourself credit repair. Creditblossom.com is the greatest website available for helping you handle this project on your own .And here’s the best part: it’s FREE!