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Credit education represents the first step toward credit repair. Brokers can help their borrowers understand the following five factors and the impact they have on their credit scores:
Payment history: Negative factors include late payments, repossessions, foreclosures, tax liens and bankruptcies.
Amounts owed: The smaller a borrowers' limit-to-balance ratio on open-ended credit such as credit cards and lines of credit the better. Overall debt includes all outstanding installment loans, as well.
Length of credit history: The longer the better. History shorter than two years likely will have a negative impact.
Type of credit: Those receiving high credit scores typically have a mortgage, a car loan and two to three major credit cards.
Inquires: A lender's request for a borrower's credit -- or a hard inquiry -- can negatively affect the consumer's credit for as long as a year. Self-checks don't have the same impact.
Many credit-repair companies offer simulators that allow the insertion of plausible extra discretionary money to see how a consumer's score could potentially increase.
Brokers should take the time to help distressed homeowners understand all their options and work to help them realize the best solution.
Shel House, president of MLS Mortgage Group, expanded her company's service-offerings to help clientele during times of distress.
If you would like to help distressed homeowners and receive revenue for doing so, e-mail House at HomeownerHelp@MLSMortgageGroup.com or call (612) 789-5626. House is a member of a referral network designed to increase business through additional service-offerings and marketing platforms.
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