Improve Credit Without Paying for Repair

One of my jobs as a loan officer is giving credit advice to clients who are looking to buy a property. Some clients come with excellent credit, but it’s the clients with poor or marginal credit where a good loan officer with proper advice can be a game-changer!

We’ve seen clients with limited credit histories, a few past hiccups, or old blemishes on their reports, wondering how to boost their credit scores without paying for expensive credit repair services. While some cases do require professional help, there are practical, DIY strategies they can try first. Below are some of the tricks we have seen work wonders to help clients prepare for that dream home. Let’s dive in!

Understanding Your Starting Point

Whether a client is starting with a thin credit file, a few late payments from years ago, or a mix of good and bad marks, the goal is the same: build a stronger credit profile. Limited credit might mean no credit card or loan history, while bad credit could stem from missed payments or high credit utilization. Old issues, like a collection account from a decade back, might still linger but often lose impact over time. The good news? You can take control with a few smart moves.

Tricks to Raise Your Credit Score

1. Check and Dispute Errors: Look for mistakes like accounts that aren't yours or incorrect late payment flags. File a dispute online or by mail with the bureau if you spot something off. Accuracy can bump your score if errors are corrected.
2. Pay Down Credit Card Balances: High credit utilization (the percentage of your available credit you’re using) can negatively impact your credit score. Aim to keep it below 30%. For example, if you have a $10,000 limit, pay down to $3,000 or less. Even a slight reduction can lift your score.
3. Become an Authorized User: If a trusted friend or family member with excellent credit (e.g., a 750+ score) adds you to their credit card as an authorized user, their positive payment history can reflect on your report. Just ensure they keep their account in good standing.
4. Make On-Time Payments a Habit: Payment history is the most significant factor in your score (35%). Set up automatic payments or reminders to never miss a due date. Consistent on-time payments for 6-12 months can improve your score dramatically.
5. Add Utility or Rent Payments to Your Report: If you pay rent or utilities on time but they don't show up on your credit report, services like Experian Boost or third-party rent reporters (e.g., RentTrack) can add these to your file for free or a small fee.
6. Wait Out Old Negatives: Negative items like late payments or collections lose impact over time. After 7 years, they drop off entirely (10 for bankruptcies). If an old mark is dragging you down, patience can naturally raise your score.
7. Pay Off Collections or Charge-Offs for Deletion: If you have a collection or charge-off, paying it in full and requesting the creditor to delete it from your credit report can be a game-changer. This strategy often boosts your score, especially if it’s a recent negative mark, making it a powerful tool for clients looking to qualify for better mortgage rates.
8. Balance Your Credit Cards: If you have some cards with no balances and others near their limits, rebalancing can help. Aim to get utilization to around 50% across all cards. For example, if one card is maxed at $10,000 and another is at $0, transfer some balance to even them out.
9. Request Credit Limit Increases: For cards with low balances, ask for a credit limit increase while the balance is minimal. Once approved, transfer balances from maxed-out cards to lower utilization.

When DIY Isn't Enough

While these tricks work for some situations, bankruptcies, foreclosures, short sales, identity theft, or multiple delinquencies may need a credit repair specialist. If disputes fail or your score remains low despite efforts, professional help can negotiate with creditors or tackle complex issues.

These strategies have helped countless clients and borrowers edge closer to qualifying for better rates, often saving thousands over a loan term. I've seen scores jump from the low 600s to the mid-700s with persistence and these methods. For real estate agents, sharing these tips with clients can set them up for success with us at Augusta Financial. I would love to help any clients who need some credit advice.

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Interest rates got better yesterday and are currently giving back most of the gains today! It’s an up and down market right now, and today got a little ugly with a large PPI number! Just yesterday, there was talk of a larger cut of rates in September, and it’s unclear how this number will affect the Fed’s decision in September and future rates.

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers, including conventional FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the low to mid 6s.
• High-balance loans from $806,501 to $1,209,750 are also in the 6’s and 7’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

Canyon Village – No Longer Naughty! CV did their time, and I explained that I don’t want to see them here again! They get it, but who knows with these HOAs nowadays?

**Bad News for Condos***     

Arroyo Park – Critical repairs. We have seen others fix critical repairs in approximately 60 days, but we will see what Arroyo Park does.

Brookside Walk – They removed the 5% cap on the deductible for the Insurance, and now they are non-warrantable! Deductible is now too high!

CONDO HELP!!!

If you have a listing or a buyer interested in a specific condo, and you’re unsure whether the condo is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real time. I have already done that on three condos today, and my list was accurate on all 3. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few each day!

The full state of California’s naughty list has been added to: MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!