Robyn Seymour - Improve Your Credit Score to Save Thousands of Dollars

Most consumers have a very little knowledge about the credit scoring system and we know that “high score is good” but what is a “high score”? Sub-prime borrowers often find the process of improving their credit confusing and daunting. This is unfortunate because many Sub-prime borrowers can bring themselves up to A-Paper if provided the right information. The first step is to gather your current credit information. The Fair Credit Reporting Act states that consumers may receive one free credit report each year. There are three major credit bureaus: Equifax, Transunion, and Experian. Each of these three bureaus uses slightly different equations for calculating your credit score, so you will want to request your report from all three bureaus.

The second step is to review your credit report information carefully. Carefully check each account listed to make sure that it is an account that belongs to you, the balance information is correct, and that the payment history is correct. Any errors should be addressed with documentation to the bureaus. A trusted mortgage professional will be able to assist you with reading your credit report and disputing any errors. It is also important to know how your credit scores ranks. Credit scores range from 350 – 850. Most A-paper credit scores start at 680 and higher. If your credit score is slightly below this level then there’s room for improvement! Increasing your credit score to an A-paper level can save you thousands of dollars in interest.

While credit repair may be necessary to correct errors, there are other simple steps you can take to enhance your score:

The credit scoring system considers the amount of debt you have on each card to the available credit limit. As a good rule of thumb, you should always try to keep your balance below a level of 30% of your credit limit. For instance, if your credit limit is $10,000, then you should try to keep your balance at or below $3,000. You can accomplish this by paying down your balances or by transferring balances to other credit cards to more evenly distribute your debt across all of your credit.

Do not close your accounts! An important factor of the credit scoring system is credit history. The longer you have a credit card account the more it improves your credit score. Use your credit from time to time so that it doesn’t become inactive. If you close a credit card account you will immediately lose all of that positive credit history. Forever!

Minimize the number of new credit inquiries that are made on your credit. When searching for a mortgage or auto loan, the credit scoring system allows lenders to request your credit as many times as needed within a 14-day period only. That means you can have several lenders pull your credit within a 14-day period. Within that 14-day period you can have multiple inquiries, but it will only count as one inquiry. If you search for new credit throughout the year and have your credit pulled often, each credit inquiry will be counted individually and your credit score will suffer.

Are you planning to buy a home or refinance in the near future? It’s a good idea to start reviewing the health of your credit three to six months before you plan to apply for a mortgage application. Improving your credit can take time, so it’s best to get started in advance. If you have a trusted mortgage professional that you work with let them know your plans and they should be able to assist you with the information you need. If you have serious or complicated credit issues that cannot be easily fixed your mortgage professional should be able to refer you to a trusted credit repair service that they work with regularly.

Addressing credit issues can be uncomfortable to say the least. But by taking these steps now, you’ll be that much closer to obtaining the home of your dreams. Credit can be confusing and difficult to deal with. By following these suggestions and discussing your options with a mortgage professional that you trust you’ll be closer to saving yourself thousands of dollars. You can look for a well experienced mortgage professional to get better outcome.

Improve Your Credit Score to Save Thousands of Dollars

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