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NINE WAYS TO BOOST YOUR CREDIT SCORE

HOW TO BOOST YOUR SCORE

I am sure as a real estate professional,you have a lot of people in your contact database who either have bad credit but have a good income and money saved,good credit but no good income,good credit with no income and money saved or you just have people who doesn't have anything-which is not good at all. If you do,you are not alone. One of the reasons why people can't get preapprove for a loan is because they dont have a high credit score. Average credit score in different states varies. Go to www.creditreport.com to check the average credit score in your area. But there is something you can do to help your clients boost their credit score and help them purchase that dream home they have always wanted.

Credit scores are increasingly used not only by lenders,but also by insurers,employers and others to size you up. Here are some tips that you can give to your clients on improviing their credit score.

1. Pay bills in full and on time. Seems like a no-brainer, but your track record with bills makes up a big chunk of your credit score. According to FICO ( Fair Isaac Credit Corporation ),your bill payment history account for 35% of your credit score. So make sure you pay those bills on time. Even if you don't have the full amount,pay something to keep you in good standings with creditors.

2.Keep the "balance-to-limit ratio" on every credit report you have as far as below 50% as possible. In other words,don't spend too much on one card -spread it around. Diversify your accounts. This account for 10% of your credit score.

3.Dont close an old,seldom used account without opening a new one. Its better to use your credit cards very wisely. Never spend beyond your means. Doing that is why most people get in debt in the first place.

4.Avoid the holiday shopping urge to open several new retail accounts at once - unless you can endure a short term drop in your score. It is good to have a set amount of what you intend on spending on holiday shopping and not go over that amount.

5.Make sure your credit reports are accurate. This is something that many people ignore but shouldn't. Why? Errors can lower your credit rating. Plus,there are some people who have the same first and last name so you want to make sure that no one is stealing or using your identity to do something illegal. Federal law allows each consumer to receive three free reports per year. You can get a free credit report at http://www.annualreport.com/.

6.Start by ordering one report. If it looks good, order the next one four months later. ( That way, you can monitor your file for free once every four months. ) However,if the first report has errors, get them fixed and check the others.

7.For people needing to raise a score in a hurry,consider "rapid rescoring" in which a mortgage lender reviews your credit reports and speeds through any corrections. A higher score can be generated in a matter of days.

8.Limit the number of inquiries. Don't allow others to run your credit unnecessary. It can lower your credit score depending on how many times you run it within a certain time frame.

9.Get credit increases for accounts used often and paid satisfactory.

FICO FACTORS ( COMPONENTS THAT MAKE UP THE FICO CREDIT SCORE )

Bill Payment History -35%

Amount Owed - 30%

Length of Credit History -15%

Diversity of Accounts - 10%

Recent iniquiries - 10%

Looking for a Washington DC Real Estate Agent that will help you buy or sell your next house or want a "Free Real Estate Market Report in your area of choice? Check out my website Houses for sale in Washington,DC. I can also be reached at Lanre Folayan "Buy Washington DC Real Estate" (EXIT PREMIER REALTY ... or Twitter http://twitter.com/DCHomesforsale. Please give me a call at 202-378-0283 (Direct) or 301-560-6700 x1154 (Office) at your earliest convenience. Thank you very much. Looking forward to helping you make your home purchase or sale a stress free and very happy one. Have a great day. "Buy a home in Washington DC"

Posted by Lanre Folayan -Petworth DC on 09/05/2007 09:55 PM

Comments (24)

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Originally posted at: DC Real Estate and Area Events: NINE WAYS TO BOOST YOUR CREDIT SCORE

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24 Comments on NINE WAYS TO BOOST YOUR CREDIT SCORE

SEP

2007

Great information. We sell Atlanta New Homes, and have found this post to be of help.

Thanks for sharing this

Stan

Lanre--Thanks for posting this. I just had a customer ask me all of this today. I will pass this on..

Good information, I have good credit, but low scores. I own a lot of property. Guess I need to pay off some of my credit cards. Thanks for the tips.

SEP

2007

Great information here! Thank you for sharing. I have a lot of clients who ask me about this, especially those interested in investing. Tip #2 is an especially good one. This can make a huge difference in your credit score. Many people don't realize but home equity lines of credit show up on a credit report as revolving credit, just like a credit card. This is why many investors often have lower scores even though they pay their bills on time.

Thats something I need to pass along to some of my clients.

This was excellent do you mind if I used it as long as I give you the credit?

Of course I don't mind. Besides,we family. Family share what they have. Well ( Certain things if you know what I mean ).

SEP

2007

I love your matter of factness. Thanks for the statistics also! This will be very helpful to buyers

SEP

2007

Dana - Thanks.

SEP

2007

Good post. Consumer oriented material that your customers are going to love and come back for more.

I have a buyer that will find this very useful.

Tip #10 - Don't open up another credit card account in the middle of a home transcation and put a balance on it. As a dumb buyer for my listing just did and has delayed settlement for over three weeks trying to get her score back over 620. Arrggh!!

NOV

2007

Hi Lanre

Good information, I am a huge supporter of spreading the word on the credit scoring model and tips to improve their score. In the home financing world I deal with many people who aren't familiar with the way credit is scored. They could be much more ahead of the curve if they had implemented strategies to boost their score prior to coming to me.

I have a credit scoring booklet that outlines specific strategies that I provide and review to those in need of improving their scores to get the best loan possible, but it can be a lenghty process that could've been avoided with more initial knowledge.

Dave

$3 is SOOo important. The old falsehood of close "un-used accounts" is not exactly true. Keeping the OLD accounts open and up to date shows a long credit history.

Better to have a card (paid up to date) open in 1990 than one opened in 2005.

NOV

2007

Dave -Its always good to know your client credit score so whatever they need to do,they should work on it immediately. Great post.

James -You are absolutely right james. And thank you for responding to my post.

Lanre,

Good reminder to consumers about the importance of a credit score, or the FICO. It plays such a crucial role nowadays in our economic system that managing your score is vital. Mistakes found can be corrected, but they will take a while.

NOV

2007

Good information!

Balances on revolving accounts need to stay below 30% or your score will take a hit.

NOV

2007

Esko - As you know of course,some people have information on their credit report that still needs to be removed. A letter to all three credit bureaus can fix the problem and even help you boost your credit score. Great post.

Russ - Thank you for that information sir.