Let's talk about credit, folks.
Although not as important in residential investment financing as it is in commercial or consumer loans, credit still determines your eligibility for a loan and your interest rates. Think of it as the gatekeeper to your financial future. And nobody likes a grumpy gatekeeper.
We often see applicants for financing with impaired credit, but the good news is that medical payments don't usually hurt you in this department. However, if you've made late payments on mortgages, gone through foreclosures, or filed for bankruptcy within the last 24 months, then, my friend, you'll need a very good explanation or else you'll be outright denied. And no, "the dog ate my mortgage payment" won't cut it. Trust me, I've tried.
It's difficult to stress enough how important it is to keep up on all of your mortgage payments, primary and investment. Credit scores below 660 are nearly impossible to get approved unless you're willing to settle for 50% or less leverage. On the other hand, credit scores above 720 are ideal and will get you the premium rate. But wait, there's more! Even if you have a credit score above 720, you can still be disqualified with a foreclosure. Yeah, it's tough out there.
But fear not, my friends. There are alternatives. You can partner with someone with better credit, like your responsible cousin who always pays their bills on time. Or, you can attempt to fix your credit. Now, fixing your credit generally takes time, like trying to get your cat to take a bath. But fear not, there are ways to do it almost immediately.
If there are blemishes on your credit report, you can easily get them removed by contacting the credit agency and letting them know what the issue is, like an erroneous reporting of a late payment or no payment at all. If you believe those payments were made, the creditor has to do research within 30 days and confirm it with the credit agencies.
And voila! During those 30 days, the blemish is removed from your record, and your credit score will improve faster than a cheetah chasing its prey. At the end of those 30 days, the creditor must report back to the credit agency for reporting or remove it from the record permanently. Easy peasy, lemon squeezy.