This post is a MUST READ post for all people who have ever had credit problems. I had them a long time ago and then when I wanted to buy a house a year ago they said, “Your credit report needs to be cleaned up.” This was TexasLending.com telling me this and they said we will send you to Preferred Credit Corporation and you can pay them 300 dollars instead of the usual 800 and they will guarantee that your credit score will be high enough to get you into a house in 6 months. Impressed, amazed, AND FOOLISH, I plopped down the $300 duckets and then added another 100 to that for the home loan application fee. My loan officer promised to have me in a place in no time, we just needed to get some things corrected. A few months went by and my credit score seemed to be improving, but not by much. I had to keep sending in credit reports to this agency about every 60 days. Finally they told me I was all set, but then TexasLending.com called and said, “Okay, we’ll get back to you on that house…” and then they never did. A couple months later I got my credit score from equifax.com and it said my score was 700. Sweet. I knew this was much better than it had been and so I started shopping around for loans with good interest rates. Every loan officer I called was hesitant. I got pre-approved but my rates were much higher than I should have been getting if my credit score was indeed 700. I pulled a copy of my report from Experian and saw that there were just 3 erroneous things on the report and they were old and so I thought no worries there. I finally called another loan officer about a home loan because my lease is up soon and he said that I had a bunch of problems on my report and he would send it to me. His report was a full 3-in-1 report. My actual credit score was only 600 and there were things on there multiple times from the same company. Some items were for as little as $32 and $101. The new loan officer said that I should have used my money to just pay off these little small items because they were really hurting me bad. There were at least 6 items that were less than 800 dollars that I could have paid back years ago if only I had known that all I had to do was call the company and tell them I had the money to pay it. In some cases you can even settle just by calling them and saying “I only have 300 dollars and if you take that now instead of the thousand that I owe… etc.” sometimes they will take it and then it will be updated on your report – “Paid in Full”. The item will still show on your report, but then they can no longer report any late payments. It will improve your score drastically.
So why didn’t I just pay them before? Because the dude at Texas Lending said paying them would only hurt me more and I didn’t realize that there were so many tiny little things to remove. Ugh. If Texas Lending had truly wanted to help me then they could have just given me a copy of the report that they received and then I could have taken my $300 and paid it to someone that I owed it to instead of paying to someone that was just going to dispute my negative credit items and hope that they fall off.
Over and over I have heard that you can just take care of these items yourself and so I was just going to do it myself a year ago, but once again, Texas Lending said that was foolish and that the Preferred Credit people had the experience and the know-how to get my report cleared up. This was a lie.
Moral of the story…
If you have credit problems, or even if you don’t, order a 3-in-1 credit report from someplace like Experian.com and then pay back the old items if you can, and if you can’t, call them and see what they will settle for, but have an amount in mind that you can pay. Sometimes you can settle for a 3rd of the cost and later on down the road it will save you thousands.