Your Credit Score

By
Real Estate Agent with CENTURY 21 Results

A good credit score can mean the difference between a low mortgage rate with conventional financing and a restrictive, higher-rate loan. There are some simple but very important steps you can take to clean up your credit.

 

1.      Look for any past due balances on the credit report and bring them current.

2.      Reduce all outstanding debt to as close to a zero balance as possible. If unable to pay all debt down, evenly distribute any remaining debt among open credit cards, or consider opening a new line and transferring some of the balances. Try to keep balances below 50% of available credit; below 30% would be even better. Do not close existing accounts.

3.      If married, keep separate credit cards. This provides flexibility in transferring some or all of the balances to one spouse to increase the credit score of the other. This provides the possibility of one spouse becoming the sole borrower and it does not change the ownership of the home.

4.      Request an increase in available lines on cards to reduce debt ratio, but only if your credit card company can that without a hard credit inquiry.

5.      Pay off past dues and charge-offs within the last two years. Beyond two years, it will have no impact on your score if wiped out. In fact, the act of paying it off can actually take your score down temporarily.

6.      Request that creditors and credit bureaus delete any outstanding debt that is incorrectly charged to you or has yet to be cleared. They have an obligation to react within 30 days. If you choose to pay off an outstanding debt (less than two years old) mark the back of the check "accepting this check is evidence that the transaction is complete and this charge will be deleted from my credit." You may be able to use the cancelled check if the outstanding debt is not removed.

 

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Rainer
225,598
Diane Bell, Hilton Head Real Estate, Bluffton
Charter 1 Real Estate, Hilton Head, Bluffton, SC - Hilton Head Island, SC

John,

A nice review of credit score ins and outs.  Just gleaning one good tip can amount to a nice improvement in a credit score.  Well done.

Mar 13, 2007 07:32 AM #1
Rainer
15,651
John Wall
CENTURY 21 Results - Long Beach, CA
Thank you.
Mar 13, 2007 08:50 AM #2
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Rainer
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John Wall

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