Gustan Cho Associates wrote this guide to help our borrowers and viewers how to rebuild their credit for mortgage approval. In this comprehensive guide, we will cover and discuss how to rebuild your credit for mortgage approval at the best mortgage rates. This guide was written for all of our borrowers at Gustan Cho Associates.
The team at Gustan Cho Associates has helped countless clients in maximizing their credit scores and rebuild their credit. We have helped thousands of consumers rebuild credit after bankruptcy. The team at Gustan Cho Associates can help consumers get their credit scores to over 700 FICO after bankruptcy within 12 months from the discharge date.
The easiest and fastest way to boost your credit scores and rebuild your credit is by getting three secured credit cards and one installment loan. We will guide you to the best credit card companies for consumers with low credit scores and prior bad credit.
Fastest Way To Rebuild Credit To Get Mortgage Pre-Approval?
If you follow our step-by-step instructions in this guide, you will maximize your credit scores. We have helped countless people get their credit scores over 700 FICO in just one year after their bankruptcy discharge. This is no rocket science.
Everyone can have credit scores over 700 FICO if you follow our easy step-to-step guide. The key to getting qualified for a home mortgage is to have timely payments in the past 12 months, preferably 24 months.
You can have prior bad credit and low credit scores but as long as you have been timely on all of your payments in the past 12 months, the chances are great that you will get an approve/eligible per automated underwriting system (AUS). If you have higher credit scores but late payments in the past 12 months, the chances are you will not get an automated underwriting system approval.
How To Rebuild Your Credit With Secured Credit Cards
http://www.youtube.com/watch?v=EPjbMv4KtxM&ab_channel=Gustan Cho Associates-MortgageBankers
The best way how to rebuild your credit for mortgage approval is to get three to five secured credit cards. Secured credit cards are the same as unsecured cards. The only difference is the cardholder needs to place a deposit to the credit card provider. The credit card provider will issue a credit limit equivalent to the amount of the deposit.
The best credit limit for maximum optimization is to get secured credit cards with at least $500 credit limits or higher. If you do not have $500, a lower amount is fine too. Once you are timely with your secured credit card provider, they will increase your credit limit without asking for an additional deposit.
There is no interest earned on the deposit. The card provider will charge interest on the balance of your card. Most secured credit card companies will report to all three credit bureaus: Transunion, Experian, and Equifax. Make sure when you apply for a secured credit card, they will report to all three credit bureaus. Again, secured credit cards are the fastest and easiest method how to rebuild your credit for mortgage approval.
Using Secured Credit Cards To Rebuild Credit
The first step on how to rebuild your credit for mortgage approval is to get three to five secured credit cards as soon as possible. We highly recommend a $500 credit limit on each card. However, a lower credit limit is fine.
If you do not have the money for all three secured credit cards, get one or two. Get whatever number of secured credit cards you can afford.
Remember the main reason you are getting a secured card is to re-establish your credit and boost your credit scores. Each secured credit card can boost one’s credit score by 20 to 50 points for consumers with lower credit scores. There are instances where consumers can get denied for secured credit cards. If this is the case, try other secured credit cards.
What Happens If I Get Denied For Secured Credit Cards?
On a personal note, I filed for personal bankruptcy in November 2019 and got it discharged in April 2020. The day I was discharged, I did not waste any time applying for as many secured credit cards as possible. To my surprise, I was getting denied by some secured credit card providers. How can that be? I am putting up the money first and they are issuing the secured credit card after the funds have cleared, right? Well, needless to say, I just moved on. Alex Carlucci of Gustan Cho Associates is an expert in credit repair and helping borrowers with bad credit qualify for a mortgage. Alex said the following about secured credit cards:
Secured Credit Cards is the easiest and fastest way to rebuild and re-establish credit to qualify for a mortgage. Getting three to five secured credit cards with at least a five hundred dollar credit limit will do the trick for your road to rebuilding your credit.
There are plenty of secured credit card companies that will offer you secured credit cards. The best ones are hands down Discover and Capital One. Both of these credit card providers have drastically increased my credit after six months of on-time payments. If you keep on getting denied for a secured credit card, then get a credit rebuilder installment loan account, which we will discuss later in this guide. After the credit rebuilder installment loan account reports your payment history for three months to all three credit bureaus, try applying again for secured credit cards.
The Best Secured Credit Cards For Bad Credit
Mortgage borrowers who want to rebuild and boost their credit scores with secured credit cards can get any secured credit card and/or revolving account they want. Make sure they report to all three credit bureaus. Michelle McCue of Gustan Cho Associates said the following on how many secured credit cards will do the trick in rebuilding credit and optimizing credit scores to qualify for a mortgage:
How many credit cards and credit limits should you get? The ideal amount of secured credit cards you should get is three to five. Start out with three with at least a $500 credit limit.
If you are limited on funds, then get three secured credit cards with lower credit limits. Here are the top secured credit cards we recommend to our clients. To learn more about them and to apply, just click on the link of the credit card name:
- OPEN SKY CREDIT CARD
- Discover-SECURED
- CAPITAL ONE SECURED CARD
- SELF.INC. CREDIT REBUILDER LOAN WITH VISA CARD
Adding Different Types of Credit To Boost Credit Scores
To strengthen your credit profile, contact your local bank and/or credit union and see if they offer a credit rebuilder program. What the credit rebuilder program does is the bank will open a savings account for you. It can be a CD or money market account. What you do is make a set monthly budget of $20 or more for one year. You make that agreed-upon payment and the bank will report the payment as an installment loan. Once the term is over, that money is in a savings account and will be returned to you with interest.
A great credit rebuilder program we recommend is Self.Inc Credit Rebuilder Loan Program. It is a great credit rebuilder loan program for potential homebuyers to rebuild their credit and strengthen their credit profile along with secured credit cards. The program issues the account holder a secured Visa card after three months of paying into the Self.Inc. Credit Rebuilder Loan Program.
Both the installment loans credit from your monthly payments and the Visa card will report on all three credit bureaus. Adding yourself to the main user of a credit card as an authorized user will help but we do not recommend it. If the main user maximizes their credit balance and/or misses a payment, it will negatively impact you. It is better to be safe than sorry.
How Long Does It Take To Build Your Credit To Buy a House?
If you get three to five secured credit cards and a few installment credit rebuilder accounts, you will see progress with your credit scores in three to four months. As your new credit tradelines age, your credit profile will get stronger and stronger.
First and foremost, aside from Boost Your Credit Scores, more importantly, you need to have been timely on all of your payments in the past 12 months. Lenders care more about timely payments in the past 12 to 24 months than high credit scores.
You can have prior bad credit. unpaid collections, charged-off accounts, bankruptcy, foreclosure, repossessions, and other derogatory credit that has been seasoned for 12 or more months. The key is to re-established yourself with new credit and timely payments. Never pay late on any monthly debts. It will impact you and will stay on your credit report for seven years.
How Many Secured Credit Cards Should I Get For Fast Credit Score Rebuild?
For maximum optimization on credit scores, get at least three to five secured credit cards with at least $500 credit limits. You should try to get several installment loans as well.
The team at Gustan Cho Associates has helped thousands of folks get their credit scores over 700 FICO in less than one year after bankruptcy. This guide on How To Rebuild Your Credit For Mortgage Approval will guide you through step-by-step instructions on the road to great credit, high FICO scores, and mortgage approval at the best rates.
Fingerhut Credit Card is a department store unsecured credit card you should try to apply for. Fingerhut Credit Card reports to all three credit bureaus and is easy to get approved with a recent bankruptcy discharge.
Get An Installment Loan Through Self.Inc Credit Rebuilder Program
Get three to five secured credit cards and one installment loan. Do NOT get an auto installment loan until you purchase your home. Auto loans have high monthly payments due to the shorter amortization schedule and can affect your debt-to-income ratio when it comes to qualifying for a home mortgage.
Gustan Cho Associates highly recommends the credit rebuilder loan program with www.self.inc. How these works is you set up a 12-month CD through an FDIC BANK, It can be as low as $25 dollars per month. You make your monthly payments timely to www.self.inc. In return, they will report your monthly payment to all three credit bureaus.
Your payment history shows up as an installment loan on all three of your credit reports. Once the 12th payment is made, you now have that total amount as cash. Here is the link to www.self.inc. Credit Rebuilder Program Through Self.Inc
Monitor Your Credit Utilization Ratio To Be Under 10%
To maximize your credit scores, make sure your credit utilization ratio is below 10%. A maxed-out credit card will plummet your credit scores.
Credit scores fluctuate and you should not worry too much about your credit scores dropping due to having maxed-out credit cards unless you are applying for a mortgage and/or new credit.
If you are planning on applying for a mortgage make sure to pay down your credit cards to at least a 10% credit utilization ratio. What this means is you should have a credit balance of no greater than 10% of the total available credit limit. The lower your credit utilization ratio, the higher your credit scores. The higher your credit scores, the lower your mortgage rates.
Other Credit Tips On How To Rebuild Your Credit To Increase Credit Scores
The chances are one of our loan officers from Gustan Cho Associates referred you to this credit guide. Do not hire any credit repair companies.
Credit repair companies are not needed to repair your credit to qualify for a mortgage. Just follow our step-by-step instructions that are on this credit rebuilder guide and you can have credit scores of over 700 FICO.
The team at Gustan Cho Associates does not charge anything. Our goal is to help you maximize and boost your credit scores so you can qualify for a mortgage. Credit repair companies can do more damage than good.
Credit Disputes During Mortgage Process Will Halt Loan Approval
You cannot have credit disputes during the mortgage process. You cannot have any credit disputes during the mortgage process on derogatory credit tradelines and non-medical collection account disputes.
All credit disputes need to be retracted for the mortgage process to proceed. If you retract a credit dispute, the chances are your credit scores will drop.
If you have any questions about reestablishing and maximizing your credit scores to qualify for a mortgage, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
