Mortgage Research Network Podcast

Welcome to the Mortgage Research Network Podcast. Just a note that this podcast audio is AI-generated, but the article on which it's based was produced by people. Content is also reviewed for accuracy. And your hosts, Tim and Craig, are real people. Without further ado, let's get into today's topic.

I'm your host, Tim Lucas, editor of MortgageResearch.com and a former mortgage professional, and with me is Craig Berry, a mortgage originator with 25 years experience.

Hi everyone, thanks for joining us again.

Today we're talking about credit score improvement and how long, or might I say short, it can take. your credit score could jump 100 points in just a few weeks, or it might take seven years. The difference comes down to understanding which credit issues are quick fixes and which ones are playing the long game.

Well that's fascinating because I always thought credit scores moved about as fast as continental drift. What makes such a dramatic difference in timing?

Well, two people could have identical 650 credit scores, but their paths to improvement could be completely different. It's all about identifying whether you're dealing with surface-level issues or deep-rooted problems.

Hmm... so what exactly counts as a surface-level problem?

The quick fixes are things like maxed out credit cards or legitimate errors on your report. Here's something most people don't realize. Although it's rare, paying off or paying down your credit cards could boost your score by up to 100 points in a single month. But that's only if maxed credit cards are really the only issue on your credit.

That seems almost too good to be true. Are there any other fast fixes people should know about?

Well, there's this thing called a "rapid rescore" that's like a cheat code for your credit report. Let's say you're applying for a mortgage and you're just 10 points shy of a better interest rate. you could pay down a card and get your score recalculated within days instead of waiting a month.

Oh interesting. but I'm guessing there must be a catch to that, right?

You're right. it could cost upwards of $500, and here's the kicker. mortgage laws prevent lenders from passing that cost to you. So they may not even agree to do it. Plus, not all changes will help your score, even with a rapid rescore. It's like throwing money at a problem that might not have a quick solution.

So what are some of those longer-term credit issues that can't be fixed quickly?

The real credit killers are things like charge-offs, collections, and bankruptcies. Those stick around for seven years, like a bad tattoo you got in college. And get this. the Consumer Finance Protection Bureau found that people trying to rebuild credit often struggle. 39% of credit builder loan customers end up making late payments.

That's a pretty sobering statistic. What should people focus on instead?

Here's something fascinating. your credit mix actually matters more than most people realize. The credit bureaus want to see different types of credit, like having both credit cards and installment loans. But here's the trick. you don't want to apply for too many different types at once.

So how do you strike that balance without hurting your score?

Well, there are some creative new solutions emerging. Some services now let you get credit for paying regular bills like utilities and rent, payments that traditionally wouldn't show up on your credit report. It's like getting extra credit for homework you were already doing.

That's actually really helpful for people just starting to build credit. What about those credit repair companies that promise quick fixes?

Oh man, you've got to be careful with those. Most just dispute everything on your report and hope something sticks. It's like throwing spaghetti at the wall, messy and usually ineffective. The CFPB has actually been cracking down on these companies for misleading practices.

So what's the most important thing for people to remember about improving their credit?

You know, it really comes down to understanding whether your credit issues are quick fixes or long-haul problems. If you've got maxed-out cards, pay them down. If you've got errors, dispute them. But if you're dealing with old collections or bankruptcies, you need to be patient and focus on building good habits moving forward. Think of it like getting in shape. there might be some quick wins, but lasting results take consistent effort over time.

That's a really helpful way to think about it. Seems like the key is knowing which category your credit issues fall into.

Exactly. And here's one final tip that surprises most people. don't close those old credit cards, even if you're not using them. Those long-standing accounts are like fine wine. they get better with age, and closing them can actually hurt your score. The credit bureaus love seeing that history, even if you're just using the card to buy gas once a month.

That's about all the time we have for this topic, but we go into even more detail on the site. To learn more, go to Mortgage research.com and type 100 point credit score in the search bar. We'll see you next time on the Mortgage Research Network Podcast.