It is imperative that anyone considering a Rent to Own or Lease Purchase Home begin credit restoration immediately. The sooner the better!
If you aren’t interested in restoring credit, then a Lease Purchase probably isn’t for you. Why?
There is no point in throwing away the option fee if you aren’t going to do what it takes to eventually own the home. Unless you are serious about doing what it takes to restore credit, you are better off renting. If you don’t do what it takes now, you will never qualify for a mortgage!
Credit repair takes time. It isn’t going to happen overnight. So, you should begin working on your credit as soon as you make the decision that owning a home is important to you!
The main focus of our program, is to help people prepare for financing while living in the house. Almost every person that comes to us falls into one of 3 categories in regards to their credit and what they need:
- Derogatory items and incorrectly reported items that require credit improvement
- Lack of open trade lines that require establishing new trade lines with secured cards
- All of the above.
Often times, when an old account is sold to another company, the dates are reported incorrectly or information about that account is reported incorrectly. Many times the same account will show up multiple times due to the account being sold to other companies. If somebody goes through a bankruptcy, it’s almost inevitable that there are items that aren’t reporting correctly on the credit report. Getting items straightened up on the report is where credit improvement comes in.
The credit improvement program we recommend was specifically designed to help people in our program prepare for financing. Not only do they prepare in depth credit analysis for each of their clients, but they will work for you to resolve incorrectly reported items, and even assist with budgeting!
Credit improvement is absolutely vital for success in financing your home. That’s why we pay for the initial fee of ~$300 for one person for each home, and why it’s mandatory for every applicant! The monthly fee for Credit Improvement is generally $49-$99 per person. The program is a month to month program, so people might cancel the credit improvement service after you get your financing, but many have continued on to assist in raising their scores even higher.
If you use the mortgage broker we recommend, he will actually reimburse you all the cost of your credit repair if you get your mortgage through him!
Secured Credit Cards
It has become more and more important to establish active trade lines utilizing secured cards. Lenders are now requiring in most cases 3 active trade lines for the applicant. That is VERY important to be aware of! Obtaining secured cards and using them properly is a great way to raise your scores, particularly when used in conjunction with credit improvement. But with the lenders now requiring 3 active trade lines, secured cards have become a necessity for most people coming to us! One of the first things our credit improvement company will do is help you easily acquire those trade lines.
The One-Two-Three Punch
Most people that come to us really need all three things – credit improvement, secured lines of credit, and rent reported to the credit bureaus. We tend to refer to this as the “One-Two-Three Punch”. The reason, is that although credit improvement is extremely effective, if you don’t have the active trade lines to offset the negative and show responsibility with credit, the credit improvement will be limited on it’s effectiveness. Same with secured cards and reporting your rent to the major credit bureaus. If you just get a secured card or if you just report your rent to the credit bureaus, it will help, but it will be limited on its effectiveness.
By enrolling in credit improvement, getting secured cards, reporting your rent to the credit bureaus, you are giving low credit scores the one-two-three punch and you’re on your way to finance!
The Bottom Line to Financing
The bottom line to getting financed in most cases can be summed up as this:
- Enroll in credit improvement – trust the professionals to help you do it faster
- Obtain at least 3 secured cards or 3 active trade lines
- Report your rent to the 3 major credit bureaus
- NEVER, NEVER be late on any payments while in the house – (this includes rent payments and any payments on credit accounts or your car)
- Don’t buy a car until you have bought your house!
By following these 5 main rules, you will be well on your way to home ownership!