When Hailey H first began her credit improvement journey, she was facing several financial obstacles that were standing in the way of her goal of buying a home.
Her middle mortgage credit score was 534 – and it wasthe result of high credit card balances and several negative items. While she had the motivation to improve her financial situation, she had no idea where to start.
Luckily, her loan officer at AnnieMac Home Mortgage had a path forward to offer her, and made a simple but powerful decision to connect Hailey to CredEvolv’s platform and a HUD nonprofit credit counselor.
That introduction became the turning point in her journey.
Understanding what was affecting her credit
During the initial credit review, the counseling agency identified several key factors impacting Hailey’s credit score.
The two biggest issues were:
- High credit card utilization; and
- Negative payment history and accounts requiring dispute review
Credit utilization – the percentage of available credit being used – plays a major role in credit scoring models. At the beginning of the process, Hailey’s balances were extremely high relative to her credit limits.
Her credit report also contained late payments and derogatory marks that required investigation and challenges with creditors and credit bureaus.
Instead of guessing how to fix the situation, Hailey worked with her counselor to follow a structured Success Plan, built around the five major factors that determine FICO® scores.
Working through a clear credit improvement plan
Hailey’s Success Plan focused on several key actions designed to strengthen her credit profile.
Reducing Credit Card Balances: One of the biggest priorities was lowering her credit card balances. As she paid down her revolving accounts, her credit utilization began to drop significantly.
Challenging Negative Credit Items: Disputes were submitted to creditors and credit bureaus for negative items, resulting in updates to several accounts, including adjustments to late payment reporting.
Strengthening Payment History: Hailey focused on maintaining consistent on-time payments. Each positive payment helped strengthen her credit profile.
Avoiding Unnecessary Credit Pulls: While rebuilding her credit, she also avoided unnecessary credit inquiries to protect the progress she was making.
Real credit score progress
As Hailey stayed consistent with her credit counselor’s recommended actions, her credit profile began to improve. Within a relatively short period of time, her scores increased across all three credit bureaus.
Her updated scores reached:
- TransUnion: 634
- Equifax: 560
- Experian: 656
Two major improvements played a key role in this progress:
- Credit utilization dropped dramatically – from 88% down to just 24% of available credit.
- A negative late payment was successfully removed from her credit report
These changes helped strengthen her overall credit profile and significantly improve how lenders would view her financial behavior.
From credit challenges to a new home
With her improved credit profile, Hailey returned to her loan officer at AnnieMac Home Mortgage to revisit the home-buying process.
This time, the situation looked much brighter.
Hailey’s credit scores had increased, her credit utilization had dropped significantly, and her overall credit profile had strengthened through the steps outlined in her Success Plan.
As a result, Hailey was able to move forward with her home purchase.
Today, she is under contract for a new construction home, meaning she is currently in the process of purchasing her home.
Hailey successfully improved her status from an unqualified borrower with a 534 credit score and several credit challenges into a borrower with purchasing power.