Credit Repair vs. Credit Building: Do You Know the Difference?

From "60 Seconds of Real Estate with the Queen." Today's lesson: Repair vs. Credit Building.

Before you purchase a home, you need to understand both of these. You need credit repair and credit building to reach the right credit score to purchase a home, and you need to understand these steps before you make a plan or start scrolling houses online.

Credit Repair

Credit Repair = fixing what is already hurting your credit.

Think:

• Late payments
• Collections
• Charge-offs
• Incorrect information
• High balances/utilization
• Old accounts that need to be reviewed

The goal is to clean up or address negative items already on the report.

Credit Building

Credit Building = creating positive credit history going forward.

Think:

• Making payments on time
• Keeping credit card balances low
• Establishing positive accounts
• Keeping older accounts in good standing
• Showing lenders that you can consistently manage credit

The goal is to add positive history and strengthen your credit profile.

"Credit repair fixes the past. Credit building prepares your future."

Keys 1 and 2 of Hopes to Homes

Credit Repair and Credit Building are Keys 1 and 2 of my Hopes to Homes program, "The 5 Keys to Purchasing Your First Home." If you want the full picture, read Hopes to Homes: The 5 Keys to Purchasing Your First Home, or see the program laid out on my Buying a Home page.

Watch the episode: https://www.instagram.com/reel/Dc3_3KZAXtY/