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Score factors:<\/strong><\/p>\n When looking at a borrower\u2019s credit report, look past the numbers alone and focus on score factors. You\u2019ll find them from all three credit agencies on the tri-merge credit report, and the great part is that they\u2019re listed in descending order in regards to the negative impact on a borrower\u2019s score, allowing you to prioritize what needs help the most.<\/p>\n The most common score factors you\u2019ll see include payment history, ratio of balance to credit limits, level of delinquency, time since delinquency, and lack of recent revolving account information.<\/p>\n Let\u2019s address three of the most prevalent score factors that weight on a borrower\u2019s FICO, with specific tactics how to remedy them for the most efficient score increase.<\/p>\n Payment history<\/strong><\/p>\n Your record of paying everything on time accounts for about 35% of your credit score. Even with just one late payment showing up, your score can drop anywhere from 80-100 points typically. So removing a late payment from your credit history will increase your score accordingly, but it takes more than just paying it off to erase the late payment or collection from your report completely.<\/p>\n Strategy #1 Pay for deletion<\/strong><\/p>\n If you\u2019ve missed enough payments to have an account in collections, they\u2019ll often agree to erase any negative credit reporting for that account if you pay it off in full. Only pay the collection via a mailed certified check, with \u201cCash only if you will delete account from credit report\u201d written above the endorsement line. You\u2019ll probably have to make a lump sum payment, but then make sure you get their promise in writing via a letter of deletion. You can use that letter for a rapid rescore instead of waiting 30 days, a tool that is available to most mortgage lenders.<\/p>\n Strategy #2 Goodwill late-payment removal<\/strong><\/p>\n Creditors have the power to remove a late payment from your credit report. They may do just that if you can make a good case that it was a one-time incident because you didn\u2019t receive the bill on time, an address, change, etc. and that you otherwise have a perfect record with them.<\/p>\n Department store credit accounts and other retail accounts are usually pretty liberal with goodwill late-payment removals. Once the payment is removed, get a payment history update letter from the creditor, and utilize a rapid rescore or just wait 30 days for the credit score to increase naturally.<\/p>\n Strategy #3 Removing authorized-user accounts<\/strong><\/p>\n Check closely to see if your borrower is an authorized user on someone else\u2019s credit account. If that credit line has a late payment or other negative item reporting, then it\u2019s dragging the wrong person\u2019s credit score down. But the good news is that it\u2019s easy for the borrower to remove themselves from the credit account. They usually only need to call the credit card company or bank and request that they are taken off the card, as well as the account deleted from their credit report, removing the negative reporting item and bolstering their score.<\/p>\n Strategy #4: Removing federal liens<\/strong><\/p>\n Federal liens remain on consumer credit reports even after the lie is paid off and released, which keeps dropping the score. But if their federal lien comes from the Internal Revenue Service (IRS), your borrower is in luck. The IRS has a program that allows them to withdrawal the lien and remove it completely from the consumer’s credit report if it’s paid.<\/p>\n Even better, the IRS will now remove their lien from your credit report even if you still owe a balance under $25,000, as long as the taxpayer is making monthly payments as promised.<\/p>\n For any federal lien removal with the IRS, just call them to get the forms you need to apply for a lien withdrawal request. However, it does usually take the IRS 60 days to process lien withdrawals, at which time you\u2019ll be issued a lien-withdrawal letter that you can get to the credit bureaus or use for a rapid rescore.<\/p>\n ***<\/p>\n Contact us if you’d like help increasing a borrower’s credit score in short order, or stay tuned for the remaining 6 strategies!<\/p>\n<\/span>","protected":false},"excerpt":{"rendered":" Anyone who\u2019s in the mortgage business knows that the halcyon […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,29,32,11,12,604,521,39],"tags":[600,601,602,603,605,606],"yoast_head":"\n