February 2017 // Real Estate & Home Builders Guide // 21W
By Ilyce Glink
and Samuel J. Tamkin
Tribune Content Agency
Q
: I logged a dispute with a credit reporting
bureau and it was resolved in my favor. How
long will it take before my scores are updated?
I’m looking to buy a home soon.
: It’s diffi cult to know how quickly changes to
your credit history are refl ected in your credit
history and score. That’s because your credit
score is a refl ection of all the information in your
credit history. If you had one piece of negative
information (like a late payment that really wasn’t
late, for example), and that piece of information
is removed from your credit history, your credit
score should bounce upward fairly quickly.
But some negative information will have a
bigger impact on your credit score heavily than
others (a bankruptcy versus a late payment),
so the upward bounce may not be as much as
you’d expect. You indicated that you resolved a
credit item but that credit item might have had a
minimal impact on your credit score. Depending
on what it was, how it was reported, and when
it was reported, removing that information will
have a smaller or larger impact.
For example: If you have an unpaid bill that
now shows as paid in full, that might help you
much more than if you had an amount that didn’t
get processed correctly that now shows that you
paid it on time. That item may have hurt you very
little and correcting it might not have changed
much.
We get it: When you’re looking to buy a
home, you want your credit score to be as high as
possible. The higher your credit score, the lower
the interest rate you’ll qualify for and the better
chances you’ll have in getting your loan approved.
You didn’t indicate what your credit score is,
but you’ll get the lowest interest rate if your credit
score is at least a 760. Many lenders will give
you a home loan even if you have a credit score
of 620. The difference in the interest rate you’re
offered with a high credit score could mean you’ll
save thousands of dollars over the life of the loan.
Raising your credit score won’t fi x everything
for you. Lenders will want to make sure you have
a solid down payment. They’ll want to see you
have some extra cash stashed away in a savings
account -- just in case. And, they’ll want to make
sure you have enough income to allow you to
comfortably make your payments each month.
We know you’re aware of what a higher credit
score will do for you, otherwise you wouldn’t be
asking about how long it takes to see improve-
ments. Sadly, your credit score can fall much
faster than it will rise. While you’re waiting, make
sure you keep your fi nances in good order, save
as much as you can, pay down your credit card
balances, stay employed, and make sure you pay
all your bills on-time and, if possible, in full.
A
CREDIT SCORES
FALL FASTER
THAN THEY RISE
BUT THERE’S
HOPE
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