CREDIT SCORE UPKEEP

Maintaining Credit Score and Credit Worthiness:

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The minimum credit score to be able to qualify for a mortgage in today's market is now a 580 middle credit score. If you feel that your current credit rating may not be high enough to qualify for a loan, there are many steps you can take to improve your rating within 3-6 months. Here are some tips:

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• Run your credit score & review the credit report

  1. Being aware of your credit score, including total debt and obligations, is the first step toward improving your score

  2. Check the credit report for incorrect information. If an error is found, notify the credit reporting agency

  3. You can run your Transunion & Equifax credit scores for free at www.creditkarma.com.  For full details on all accounts you can also obtain a free credit report at  freeannualreport.com.  Contact us for your full tri-merge credit report which will contain all scores and account details

• Make payments on time

  1. Over time this will help to increase your credit score by proving that you are responsible with debt

  2. Pay your credit card debt down before they create your monthly statement. This will a lower monthly payment while still showing that you use the credit card

• Lower your current debt obligations

  1. Pay down high interest credit cards or loans

  2. Reduce your monthly payments by paying off debt with high payment to balance ratios.  You want to keep your balances at least 50% or lower than your limits.  Keeping your balances 50% lower than limits is one step up, next is 25%, best is 10% or less.

• Increase your total line of credit

  1. The goal is to increase your debt to credit limit ratio

  2. Request credit line increases on your current credit cards

• Open new accounts

  1. In the short term, this will decrease your credit score but proving that you can responsibly handle these new accounts, with on time payments, will increase your score over time

  2. Opening new accounts also shows that you can maintain a healthy mixture of different types of debt

• NEVER CLOSE AN ACCOUNT – this can negatively affect your score.  35% of your score is based on history

• NEVER PAY OLD DEROGITORY ACCOUNT UNLESS THE UNDERWRITER IS REQUIRING IT -  this brings an old derogatory account current thus negatively affecting your recent history

• Credit Frozen? If you currently have any type of freeze on your credit due to fraud or identity theft this will have to be temporarily lifted in order to obtain financing

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If you have bad credit or no credit history, you should do the following minimum steps to improve your credit in 3 to 6 months:

1. Open a secured credit card or get approved for credit card with a low limit at www.creditcards.com
2. Charge a minimum amount,  just 1 small transaction a month
3. Pay off the entire balance each month (set up an auto-pay)