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I'd like to better understand my credit score, and get advice on how to raise it.
I'm currently 701 / 706 / 716.
I have 2 mortgages which total $900K. I have a short sale from Apr 2013. I have no late payments other than from that short sale. Credit cards are paid in full each month. I am currently not employed. (Yes, I sleep at night.)
Is my score low because of my high debt? Or is it low because of the short sale?
At what date will that short sale (derogatory mark) disappear? Will that be Apr 2015?
I'd like to better understand my credit score, and get advice on how to raise it.
I'm currently 701 / 706 / 716.
I have 2 mortgages which total $900K. I have a short sale from Apr 2013. I have no late payments other than from that short sale. Credit cards are paid in full each month. I am currently not employed. (Yes, I sleep at night.)
Is my score low because of my high debt? Or is it low because of the short sale?
At what date will that short sale (derogatory mark) disappear? Will that be Apr 2015?
What can I do to increase my score, if anything?
Thank you.
Only time will increase your score. How do you come about that the short sale will disappear in 2015? As I understand it, the higher score you started out with before the SS, the long it will take to recoup those lost points if you were doing everything else correctly.
BTW.. 700's is not bad score for someone who had a SS a year ago.
I had the understanding that a short sale dropped off the credit report after 2 years while a foreclosure stayed on much longer. It was a short sale of an investment property, not a primary residence.
Is my understanding incorrect? If so, when will that 'derogatory' mark go away?
I had the understanding that a short sale dropped off the credit report after 2 years while a foreclosure stayed on much longer. It was a short sale of an investment property, not a primary residence.
Is my understanding incorrect? If so, when will that 'derogatory' mark go away?
Thank you.
My understanding is that SS and Foreclosure are treated in similar fashion in credit report. My understanding is that those negative marks stay up to 7 years in credit history. The 2-3 years is usually reference to obtaining another mortgage.
My understanding is that SS and Foreclosure are treated in similar fashion in credit report. My understanding is that those negative marks stay up to 7 years in credit history. The 2-3 years is usually reference to obtaining another mortgage.
Foreclosures and short sales do report differently. A SS shows that it was paid as agreed, but not paid in full. That's why a shortsale will lower your scores less than a Foreclosure. They will both stay on your credit for 7 years, unless you can get a credit repair person to remove the SS, and many can. It depends on how the bank reported it.
....stay on your credit for 7 years, unless you can get a credit repair person to remove the SS, ...
Every person is different - the best advice is learning what the five parts of credit are, and how you can easily fix and maintain your own credit yourself. You need to learn and make changes in your life if you want your score to go up. If you don't want to do this - this is a sign of being lazy and you will continue with your bad habits and credit issues.
Dito on staying on the credit report then 2-3 years to obtaining another mortgage. Noting the longer the period, the less of an effect the negative item will have. Understand your credit report it just that, a report of your financial payment history. Trying to remove something that really happened is considered fraud.
Red Flag on getting "a credit person" to help you. You can easily fall victim to a scam when someone says what you want to hear, There is a federal law that prohibits paying for credit repair. Other than removing inquiries, correcting incorrect information, or updating with new information. Generaly stating items can be removed is incorrect. Depending what it is and if it can be proved, the negative item can stay on the report up to 7 years to 10 years. I have seen Collections going up on the 7 year window. The debtor updated the information and the occurrence continued on the report for another seven years.
The credit report can be helped by disputing a negative items with CB's (transunion, equifax, experian). If after 30 days the bad item can not be verified it comes off. If the bad item comes back verified after 30 days, goes back on your report the following month. However there is guarantee the score is going to dramatically jump up. New and on-time information being reported is what is going to help your report.
A way you can manipulate your score very high with your current "first" mortgage. Send more than the agreed upon amount. Applying extra towards principle. For example one payment divided by 12, and adding the 1/12th with your normal payment.
One extra payment on a 30 year long can reduce term to 23.5 years
One extra payment lowers your net effective interest rate by 2%.
Sending extra increases your equity faster.
Sending extra you are reported as more responsible by the CB's.. The reward is your score can go up very high.
Pay off the mortgage along with on time payments, become a member of the 800 club....
One thing you should be aware of if you pay off everything, after a period on time your report can show "N/A" I have worked with mature people that were debt free, had trouble qualifying them for new financing because of no recent activity.
This is not hard - spend a weekend on the internet researching taking notes and creating a plan for you. One site you can start with is the Credit Infor Center. They are a good resource, have a zero spam policy, free to become a member and you can ask questions and contribute.
It is not rocket science to understand having good credit you will pay less in life. Contrary to someone that is not responsible with damage credit, will pay more in life. Having credit is a priority in life many people do not think about until they need something. Again for the OP, learn everything you can about credit, make it a priority and create a plan.
Good Luck
Last edited by Modification Specialist; 08-13-2014 at 12:58 PM..
Modification Specialist - thank you for the information. Your note did come off condescending.
My credit is far from bad. I never mentioned going to see a credit person. I didn't appreciate the "it's not rocket science" comment. Ouch. Some folks here have been extremely informative. When push comes to shove, it will be a loan officer I visit with. But I've learned alot from the nice folk on this forum.
I'm not lazy. I don't have bad habits. I'm a widow who got stuck with two mortgages because my dear hubby and I were in the process of moving to another state when he had a heart attack. (Yep, feel free to hunt down other posts of mine. It's a consistent story.) Neither of my current homes is a good fit for my downsized family. Large home = high expense. I'm trying to get a feel for how hard it might be to qualify for a new mortgage if I sold both existing homes. I'm trying to manage my expectations, you might say.
I had the understanding that a short sale dropped off the credit report after 2 years while a foreclosure stayed on much longer. It was a short sale of an investment property, not a primary residence.
Is my understanding incorrect? If so, when will that 'derogatory' mark go away?
Thank you.
No it doesn't "drop off". Expect it to not show up in 7 years as already mentioned. Since you are posting this in the mortgage forum, I'll address this based on future mortgage consideration. The waiting period can be as short as one year based on the type of commonly available loans or it can be 2 to 4 years based on down payment. This can change at any time, spoiler alert!
The 2 mortgages don't necessarily hurt your score. Simple things like inquiries can hurt. If you move and the cable, utilities, and phone, company pull your credit, your score will get hit. When you go shopping and get apply for a credit card to get discount , you'll be hit. At the some time, low balance to 'high limit' on revolving credit also helps your score. Having a $500 balance on a $500 credit card hurts more than $500 on a $2000 limit. Currently inquires generally won't hurt your score after 2 years.
Some of the credit agency sell an online product that you can get 'what if' scenario scores, but to cancel their service, you might have to be on the phone with them for an hour, it is easy to purchase, hard to cancel.
Some of the credit agency sell an online product that you can get 'what if' scenario scores, but to cancel their service, you might have to be on the phone with them for an hour, it is easy to purchase, hard to cancel.
Yup.. try something like CreditKarma. It gives you the ability to play around with different scenarios. It's not to be exact.. Just gives you an idea.
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