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You want that Arizona Home Loan to purchase our dream home but your credit score is low. Your credit score is an indication of what the industry calls your willingness and ability to pay debt.  It’s a probability ranking score on the possibility of you defaulting on an Arizona Home Loan payment obligation in the next 90 days.  Some people like to think of it as a credit score grade on your payment performance.  The lender will look at your overall grade and see if you are willing and able to pay the debt.  If you have a failing credit grade (an F), then the lender will assume that you are going to fail again and not pay them back.  It’s an overall Grade Point Average on how you passed or failed on prior loan obligations.  If you got an F on an Arizona Home Loan in the past your Grade Point Average is going to go down.  Think of it as when you were in school.  Every year the school would give you a Grade Point Average for the years work.  Some people got a very high Grade Point Average (all A’s) and were the smart kids in school, while others got a few D’s and F’s on their report card and had a lower Grade Point Average for the year.  This school

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of credit never ends in your life and you want to have the highest credit score Grade Point Average as possible, and keep it up through your life.   So what do you do to get a high credit score Grade Point Average?  You do the same thing that you did in school.  That is:

1. Take the Test over again and get a better grade.  How do you do this?  You pay back the people you owe money to.  Those items in collection or past due need to be paid off and settled.  The grade on your past due loan is currently an F, but you can make it a C+ if you pay off the debt.

2. Don’t get any more F’s on your work.  This means that you pay the loans back and on time.  You need to take it seriously, and make the payments and don’t be late.  Remember when you turned work in late in school and the teacher deducted points for the work because you were late?  It’s the same in the credit school; don’t be late on your work.  Also, what type of grade were you given when you did not turn in the work at all?  You would get an F.  This is the same with paying loans, when you DON’T PAY then you get an F and your overall credit score Grade Point Average goes way down. Pay your loans on time and full will give you the best Grade Point Average.

3. Don’t take on too may classes.  If you take a safe load of classes, then your work

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load is easier and you can probably get an A in every class.  But if you take on too many classes, you will not be able to get all the work done for all the classes.  This is the same in the credit world.  Don’t take on too many loans and keep the balance owed on the loan to around 30% of your available balance.  The lender will look at your loan load (class load) and think are you never going to get the work done?  You have maxed out all of your credit cards and want another one? The more loans you take on (sign up for) the higher the chance that you are going to fail on one of them and possibly the loan you are now trying to get is the one you will fail on.

4. Get that bad score off your report.  Usually the quickest way to get a bad grade off your report is to dispute the score (Whine to the teacher). Tell the credit bureaus that it’s not your grade or that the grader who graded the test was wrong, or that they used the wrong pencil or that they used the wrong answer sheet to grade your work.  If you can get an F off your report card, your overall score and Grade Point Average will go up.  This is usually the first thing you can do to get a better Grade Point Average.  You do this by disputing the items on your credit report for each of the credit bureaus.  If they believe you and you are able to get the score off your credit report your Grade Point Average will go up.  If credit bureaus don’t believe you, then work on step 1-3 above. 

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The good part about the credit score Grade Point Average is it is an Average.  It’s calculated over time and time is your friend when you calculate the Grade Point Average.  Your overall score is based on the current work and the work you have done in the past, but usually it’s for the last 3-5 years and if you have an F on your credit score report card, it will drop off in a few years. So if you keep your grades up, in a couple of years your credit score Grade Point Average starts to improve and eventually you will have all A’s and you can qualify for the Arizona Home Loan.

I recommended that you read the book Credit Bible – Everything You’ll Ever Want To Know About Credit by Phil Turner.  This is a detailed book on the steps and mistakes you can do to fix your credit score.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027