Buying a house can be an exciting and daunting experience, especially if your credit score isn't where it needs to be. However, with the right knowledge and guidance, you can turn this around and secure a home in the Brown County and surrounding areas. In this episode, Greg Dallaire from Dallaire Realty interviews Chris Fisher from My Credit Guy to shed some light on common credit reporting myths and how to improve your credit score.

Buying a house and managing your credit score matters

One of the most significant misconceptions people have about credit reporting is the Fair Credit Reporting Act (FCRA) and Fair Credit Collections Practices Act (FCCPA). These acts protect borrowers across the country from inaccurate credit reports, and creditors are in violation of these acts about 70% of the time. This is where companies like My Credit Guy come in to help borrowers clean up their credit reports and correct inaccuracies. Creditors have 30-45 days to respond to investigations under the FCRA, and if they fail to do so, they must remove the negative items from your credit report.

Understanding how credit scoring works gives you an edge

Another significant myth about credit reporting is that checking your credit score online will hurt your credit score. This is not true, and checking your credit through online sources such as annualcreditreport.com or online credit monitoring will not add a hard inquiry to your credit report. Inquiries, in general, are also not a significant culprit for low credit scores. While they can impact your credit score by two to four points, they are not the reason your score is as low as 560. Many people get upset when they see multiple lenders running their credit report when they apply for a car loan, but this is a common practice and will not hurt your credit score significantly.

Key factors to improve your credit score

To improve your credit score, it is essential to understand the factors that influence it. Payment history is the most significant factor, accounting for 35% of your score. This means that making payments on time is crucial. The second factor is credit utilization, which accounts for 30% of your score. This refers to how much credit you're using compared to how much is available to you. Keeping your credit utilization below 30% can help improve your credit score.

Another factor to consider is the length of your credit history, which accounts for 15% of your score. The longer your credit history, the more reliable you appear to lenders. Closing old accounts or opening new ones can impact the length of your credit history, so it's essential to consider this before making any changes. New credit and types of credit each account for 10% of your score, respectively. Applying for too much credit in a short period can negatively impact your score, so it's crucial to space out credit applications and only apply for what you need.

Feel like there's no hope on improving your credit situation? MyCreditGuy can help

In conclusion, improving your credit score takes time and effort, but it is not an impossible feat. Understanding credit reporting myths and the factors that influence your score is crucial to making informed decisions and improving your score. Companies like My Credit Guy can help you navigate the complexities of credit reporting and clean up your credit report, putting you in a better position to secure a home in Brown County and the surrounding areas. Don't let a low credit score hold you back from achieving your dream of homeownership. With the right knowledge and guidance, you can turn your credit score around and secure your dream home.