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Fast Fixes to Your Credit Score

Magnifying glass over the words credit scoreGetting the Best Rates Possible

In a previous post, I stated you needed a credit score between 640 and 680 to qualify for a mortgage. To get the best rates offered by a mortgage company, however, you should have a score in the 750 range. With this type of credit score you'll not only get the best mortgage rates, but also insurance rates. So, by improving your credit scores you improve your pocketbook.

To Check your Credit scores:
You can get free scores at Credit Karma but these are generally not used by lenders.
MYFICO.com offers two of the three credit scores used by mortgage lenders and banks for $19.95

Ways to improve your credit scores

  • Get a credit card or two. Use the cards, but pay them off each month. This will build your credit scores quickly. If you can't qualify for a regular credit card, consider a secure one where the issuing bank gives you a credit line equal to the deposit you make.
  • Add a personal loan. This is an installment type loan, whereas credit cards are a revolving loan. Adding a personal loan will show that you have both major types of loans, boosting your scores dramatically in just a few months
  • Pay down existing credit cards. This actually improves your scores more than paying them off. Ideally, attempt to get them below 30% of your credit limit.
  • Use your credit cards lightly. Don't rack up high balances, even if you plan to pay them off each month.
  • Check with your credit card companies. Make sure your lender limits are correct. They may be artificially depressed by the lender if you repeatedly charge the same amount each month and pay it off.
  • Do a search for old credit cards.Make sure they have zero balances and are closed out if not active, so as not to hurt your credit scores.
  • If you’re a good customer the bank may simply erase a late payment for you.
  • Dispute any negatives on your credit report. If you have a disagreement over a bill with your cable or phone company you can dispute it with the credit bureaus as not belonging to you, or that the issue was resolved.

Check for errors. Here's the stuff worth the effort to correct with the bureaus:
Late payments
Credit limits reported lower than they actually are
Accounts still listed as unpaid that were included in a bankruptcy
Negative items older than seven years. If the amount is not large, you needed bother.

If you follow these steps your fico scores should improve significantly in just six months!

I hope you found this information helpful. If you have questions or need clarification, feel free to contact me. I am just an email away.

Jack Kilkenny

Jack Kilkenny
Brownstone Real Estate Co.

[email protected]