How to Repair Your Credit For Real Estate Investing

by May 5, 2022Blog

While it’s possible to buy real estate with bad credit, a person will receive much better loans and rates with a higher credit score. In the long run, a high credit score could save you thousands of dollars in interest.

Let’s review some steps to repair your credit for real estate investing.

Review accuracy of credit report

The first step is to request your credit report and review it for accuracy. People are allowed to request their credit report once per year from credit bureaus like Experian, Equifax, and TransUnion.

Once you get your credit report, look for any errors and fix them. Even simple mistakes like work history, birth date, or paid debts that haven’t been removed could affect your credit score. You may also discover irregularities due to identity theft, which requires immediate action to rectify.

Increase your available credit

There are many pros and cons to increasing a credit line. The biggest benefit to obtaining a credit increase is that it can impact your credit utilization rating. Credit utilization refers to the amount of debt you currently owe divided by your credit limit. Having a higher credit line lowers your credit utilization, which can boost your overall credit score.

An increased credit line could become a problem for people with a spending habit. Just because you can now borrow more money doesn’t mean you should actually spend it. This strategy is best suited for people that won’t use any more of their credit.

Add new credit lines

Adding new credit lines is a strategy similar to increasing your available credit line. The goal is to lower your credit utilization rating to increase your credit score. Getting another credit card is one of the most common ways to add new credit lines. People can also consider car loans or personal loans as a way to accomplish this strategy.

New credit lines also come with the temptation to use the credit, so it’s important to ensure that you are ready for the responsibility and won’t spend more than you can pay off.

Pay down debts

Alternatively, paying off your current debt will also increase your available credit and subsequently affect your credit utilization rating.

If you have any current debt in collections, it’s best to find a way to pay it off as soon as possible. Once the debt is paid off, it can be removed from your credit report and help boost your credit score.

Payment history is another factor that makes up a credit score, so you should ensure that your credit cards and other debt are paid on time every month.

Ask for help from credit repair consultants

Repairing your credit can be a momentous task, and it can be overwhelming to figure out the best way to tackle your debt. Partnering with credit experts can help you find the support you need.

At Improve Credit LLC, our credit repair consultants can evaluate your situation and create a personalized plan to improve your credit score. Personal credit repair can take time, but a strong strategy can help increase your credit score and qualify for competitive loans.

Get in touch with us for a free analysis of your credit. You can also call us at 704-877-8739 to discuss your situation. We look forward to helping you achieve financial security.