This is the final installment of our 3 part series on credit and your real estate investing business. In part 2, I discussed making payment arrangements with your creditors. In this post I’ll talk about what you need to do if the creditor doesn’t contact the credit agencies to update your credit report.

Once you’ve paid off or satisfied your accounts, the updates may not be shown on your credit report and your score may not increase automatically. To prevent this from happening, the creditor must contact the credit bureaus with the new account status. As I’ve stated earlier, sometimes the creditor will send the updated status information and sometimes they won’t. If they don’t, it’s in your best interest to provide the updates yourself. This means you will contact the credit bureaus or risk the chance of your score remaining the same. Remember those letters you requested from creditors verifying the accounts had been satisfied? Well, they’re going to come in handy now. You’ll need to dispute each account on your credit report that’s inaccurate. This can be done online through any of the credit bureaus’ websites. Once you file a dispute, the credit agencies have 30 days to research the account. If the creditor informs the credit agency of the update then your credit report will show the update within those 30 days. If the creditor for some reason does not forward the change in status, your letters will be your backup to prove the account was paid in full. You’ll have to forward this information to the credit agency and contact the creditor again with your proof of payment. This should be enough to aleviate the problem and your credit report will be updated.

Hopefully this short series on credit repair was helpful. I’ll be going into much more detail and cover all aspects of credit as it pertains to your real estate investing business in our eBook, so stay tuned. In the meantime, please send me any credit questions you have via our Contact Us page or leave a comment on this post.

This post is part 2 of our 3 part series on credit and your real estate investing business. In part 1, I talked about getting a copy of your credit report, contacting creditors and negotiating a settlement. If you can’t pay the settled amount in full, the next option is to request a payment arrangement. In this post I’m going to discuss in more detail the proper way to set up a payment plan.

Once you contact the creditor and they agree to work with you, request to have your late payments added to the back end of the loan. This means any missed payments would be added to the end of the loan and no late payments would be due. Request to have all late fees and penalties dropped. Generally creditors will drop fees in an effort to make the account current. Now you can make timely payments and immediately put the account in good standing. Notice the comment on timely payments. It’s not just enough to repair your credit. Your goal is to remain in good standing so you can get access to financing when you need it.

You can also request to have your payment extended over a longer period of time, as well as asking for a decrease in your interest rate. This would reduce your monthly payment to a more manageable amount. This would also put your account in good standing and stop the negative reporting on your credit.

Here’s a final point to remember. Always get any agreements in writing before you make a payment. You don’t want the creditor to change the agreement halfway through the transaction. The written agreement will protect your side of the deal.
Keep in mind that your credit didn’t break overnight. It can be fixed, but you need to do the right things and give it time. Part 3 of this series will tell you how to….

Many beginning real estate investors shy away from getting started because of the condition of their credit. They all want an answer to the question: “How do I repair my credit so I can pursue my real estate investing business?” It will be extremely difficult to get financing if your credit is not in order. In this blog post, I’m going help you get moving in the right direction and repair your credit.

The first step is to get a copy of your credit report. There are several websites that offer a free credit report once a year. It’s best to request one from each of the three main credit bureaus: Trans Union, Equifax, and Experian.
Next, compare the credit account entries listed on the three reports. Sometimes the different reporting agencies show different or contradicting information. If you find any discrepancies, contact the individual creditor to dispute the information or make arrangements to settle the account. Often the creditor will allow you to settle the account that day and agree to a lower payoff amount. If the creditor does agree to a settlement, but the amount is too high for you to pay off entirely at one time, try to setup payment arrangements. A payment arrangement will immediately stop the negative reporting on your account and subsequently be updated on your credit report.

After you’ve negotiated a settlement or payment arrangement, make sure you have it documented in writing from the creditor. When you pay off an account, request a letter stating the account is paid in full or the debt has been satisfied. You may need to provide verification of payment for the credit bureaus if the creditors do not pass this information on in a timely manner. The creditor should contact the credit bureau, but sometimes they don’t so you may have to follow up. In general, your credit report should be updated within 30 days or so.

The information in this post should give you enough information to start repairing your credit right now. The sooner you begin, the sooner you can start making money through real estate investing. Our next credit repair post will focus on the process for setting up payment arrangements for an outstanding debt.

In this episode, we discuss three typical obstacles that derail beginning real estate investors. Ronnie gives excellent information to help new investors avoid these mistakes and stay on the road to success.