Hello. I bought some rentals about 5 years back, but lost them 2 years ago. The market had crashed, and my identity was stolen. I now realize that I should have bought properties that I could rent for 2% or more of the purchase and rehab price.
So I will probably pay cash for my next rental, but I want to know what the best way to build my credit back up is. I suppose I may have to wait another 7 years before my credit is ever decent, but could I secure commercial or other financing before then?
Ideally, I would like to get a “blanket” line of credit, that would be increased as I buy more properties. And I plan to pay down the principal as much as possible every month.
Would it help to hire an attorney or a “credit repair” service? Any help would be appreciated. Thank you.
There’s probably nothing a credit repair service can do that you can’t do yourself.
I’ve been through the same thing, though a bit earlier, and the first thing I’d advise is to start monitoring your credit. You can one free credit report a year from each of the major bureaus (Experian, TransUnion, and Equifax), so you can start there.
The first thing is to make sure all of these bureaus are reporting all of the accounts that were discharged in your bankruptcy correctly, i.e., as closed bankruptcy accounts. As mortgages are sold in packages, sometimes the new servicing company incorrectly reports closed accounts as open and delinquent, which trashes one’s credit score.
I’ve had to write these bureaus (especially Equifax) numerous times to correct such errors, which sometimes keep coming back again and again… but less frequently over time. It took about 3 years after my bankruptcy to apparently get these sorted out for good (knock on wood). I hope you still have some of your statements, servicing transfer documents (even post-bankruptcy), etc., as these may come in handy in identifying accounts as having been included in the bankruptcy.
The other thing is obviously to keep all your payments current and not run your balances up too high. Your score will improve over time if you do that. My scores are better now than when I had a perfect payment record but was over-leveraged prior to my bankruptcy. 2 years after bankruptcy is a key point, where credit options improve, provided you can keep incorrect information from ruining it.