For anyone trying to purchase a home, getting denied for financing because of a poor credit score is among the most bitter, gut-wrenching feelings ever.Unfortunately, denial for home loans is more common than you might think. In fact, 1 in 9 applications for a mortgage was rejected in 2018. Despite how upsetting rejection is, many homeowners use their frustration as a catalyst for change and start seeking credit repair services to improve their situations.
Credit repair businesses have an incredible opportunity to step in and help. Regardless of your client’s current financial situation, here’s what you can do to get him or her approved for a mortgage.
Practice Niche Marketing
Credit repair businesses have no shortage of clients. Each client you come across will have a unique story, and will be striving to reach a unique goal. Rather than being a generalist, hone your credit repair businesses’ focus on a specific niche, like helping clients obtain a mortgage.
Niche credit repair can help you maximize your business leads, and improve the quality of your work.
For example, before starting his credit repair business, Sam Naquin worked as a mortgage broker and a foreclosure specialist. His experience allowed him to learn about credit, but he always felt upset about his ability to help clients. Sam got to know his clients and wanted them to succeed, but had limited solutions for helping them obtain mortgages, or keep their homes.
That’s when Sam decided to start a credit repair business dedicated entirely to assisting others in landing a mortgage. Now, he’s an expert in the trade.
As someone passionate about helping people, Sam realizes there is no shortage of helping people with credit. However, by focusing on a specific niche, he’s able to separate himself from the competition, and more effectively help his clients because he focuses on one area of business.
Find and Fix Weaknesses
Each client you serve has a unique background. Get to know your clients, hear their stores, and deep dive into their credit reports to find easy wins that may have an immediate impact on their scores.
Assess Your Client’s Situation
First ask, why was your client’s application denied?
Is it because of a poor credit score, a high debt-to-income ratio, or something else? By getting a baseline of what’s burdening your client, you can start to understand the steps you need to recommend to best help them.
Credit repair specialist Pretty Washington (pictured above) suggests placing emphasis on getting to know your clients. Pretty reminds new credit repair specialists that you’re not just dealing with data; you’re dealing with real people.
“Do you know what it feels like when you don’t know if anybody can help you? That’s a bad place to be,” says Pretty.
Pretty says authentic conversations with her clients help her draw inspiration so she can find customized ways to help each client succeed.
Look for Credit Score Errors
Did you know that more than 79% of all credit reports have some type of error on them? Errors bog your client’s credit score down and can increase the difficulty for them to obtain a mortgage. In fact, a simple bank error is what almost forced Credit Repair Cloud founder, Daniel Rosen, into bankruptcy.
By pinpointing inaccuracies on your client’s accounts, you’re armed with data and dispute letters techniques that prepare you to enter a winning battle with the credit bureaus.
Reduce Outstanding Debt
Another way to increase your clients’ odds of being accepted for a mortgage is to improve their debt-to-income ratios. To do this, work with your clients to reduce their existing debt. As a credit repair specialist, you can help by:
- Submitting hardship letters to lenders
- Requesting payment plans to the credit bureaus
Finding leeway for your clients can help them reduce outstanding debt effectively, without placing an additional burden on them.
You don't have to uncover these weaknesses manually. As a credit repair specialist, you have access to software like the simple audit tool from Credit Repair Cloud. This technology helps you identify errors, remove negative items, and submit dispute letters to the credit bureaus using the power of automation.
Find Creative Solutions
Apart from fixing your client's credit score, there are basic personal finance principles that can improve your clients' odds of obtaining a mortgage:
- Work on the down payment: Homeowners who have cash saved for a down payment can save on insurance premiums and mortgage rates, while simultaneously looking more desirable to lenders.
- Consider a co-signer: If your client is unable to land a mortgage on their own, can they find a co-signer? It’s not always an option, but if your clients can take advantage of this, it may improve their odds of securing a loan.
- Find the best match for a lender: Applying for a mortgage through major banks may be the most obvious choice for hopeful homeowners, but it might not be the best. Consider working through smaller credit bureaus that may have more flexible rates and terms to help protect your clients.
- Minimize hard inquiries: A hard inquiry is when a credit lender formally checks a borrower’s credit to decide whether they are likely to pay a lender back after they extend a loan. Hard inquiries occur when your clients apply for anything from a credit card to a mortgage. Each time they apply for a loan, a new hard inquiry could pop up on their credit report, which will also decrease their score. If your clients get rejected for a loan, and try to reapply for another right away, in some cases, they’ll rack up another hard inquiry. By repeating this process, they can be doing harm to their credit scores. As a credit repair specialist, you can help inform your clients of best new practices for requesting new loan inquiries.
Find Your Inspiration
For many credit repair specialists, the most rewarding part of their jobs is when they can connect their clients with better opportunities in life. Credit hero, Ashley M., specifically emphasizes the joy she feels when she can help single mothers get into a home after using credit repair services.
Actually, Ashley once was unable to qualify for a home loan because of her credit score. But, after getting denied, she took steps to improve her credit score from 499 to 721 in just 6 months. After improving her own score, she had hundreds of clients reach out to her asking for help improving their credit so they too could land a mortgage.
And, just like Ashley, you can learn the process to help others, too.
