More on Credit and Fixing Credit
Make sure you know what your credit looks like. Every mortgage broker has heard 'I don't know anything about that account, its not mine.' Sometimes, that statement is even true.
Your credit can have erroneous information. Most of the time its simply old information that has not been updated. Your credit report is simply the sum of all the information on file with the three credit bureaus. Your accounts aren't always reported to all three bureaus. Its often geographically influenced. In the southeast, Equifax is the most widely used. I've been told TransUnion is much more popular in the Northeast and Experian is more common on the West coast.
Even if your accounts are on file with all three bureaus, it can still be out of date information. This is common in Bankruptcy cases or in situations where people have gone through a rough time financially and then gotten back on track without filing for bankruptcy.
When accounts go bad and possibly are sold to collection agencies, they stop getting updated on a regular basis. If you've had derogatory accounts that were later taken care of, check your credit report to make sure it contains the newest information.
Fixing Credit
Everyone has heard of people or companies that can fix bad credit. Fixing your credit can only be done by you. When you pay your accounts on time, you build up your credit rating. This is a process, it takes time. You didn't get bad credit in 30 days and you're not going to get good credit that quickly either.
Repairing, or cleaning up your credit is very possible though. There are a lot of good people and companies that can assist you here. Someone knowledgable in this area can walk you through making sure your credit report has only up to date, correct information. Ask around and get referrals. Other people's experience is your best guide here.
Reestablishing Credit
If you've had a rough time financially and your credit has sufferred, reestablish your credit as soon as you can. I am not saying get back into debt. A small credit card that you use once a month and payoff when you get the statement is not getting back into debt. It is using credit though.
Be responsible. You know what you can and can't do financially. You need to be on a 2-3 year plan to reestablish a good credit rating. Utilize your accounts smartly and work on paying off any old debts that went bad.
The worst thing you can do, credit wise, is to not get any new credit accounts after something has gone wrong. You may say to yourself that you've learned your lesson and you're not doing that again. You may decide to pay cash for everything and not buy it until you can pay cash.
Cashflow wise, that's a good move. But you're shooting yourself in the foot credit wise. Credit is a necessary part of today's society. You need to prove that you can responsibly handle credit. When you've done that, creditors will look favorably at giving you a mortgage.
Two years is a good rule ot thumb. You come to a smart broker with two years reestablished credit, even after a Bankruptcy, and chances are very good they can do something for you.
