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Getting Control of Your Personal Credit

By
Real Estate Agent with BelleTerra, Realtors

Focusing on Personal Credit

By: Tim McLaughlin          

If you're planning on taking advantage of this opportunistic housing market, you'd better start checking your credit reports now. There may be some surprises waiting for you. Given the credit crisis, some credit-card companies are reducing credit limits on some borrowers. For some people, that may drag down their credit score even if they have been diligent about their finances. Here's why: A major factor in calculating a person's credit score is credit utilization (how much of your available credit you use) according to Fair Isaac (as in credit-quality FICO scores). When your total available credit shrinks, the percentage of credit that is being used goes up, and that can do some damage to your credit score regardless of how well you've kept up on payments.     

If you plan on buying a new home in the next year, there are five things you can do to keep your credit looking as good as possible, according to Fair Issac's:

Check your credit report: Find out if there have been changes to your account limits, and make sure there aren't any errors. Look for any negatives on your report (most negative items should be removed after 7 to 10 years).

Keep the balances low: About 30% of your score is based on a ratio of the amount that is owed on active cards to your available credit. But utilization on individual cards is key; getting close to the limit on one card will reflect negatively on your score. Pay down balances as much as possible.

Keep accounts active: Accounts get closed when there is no activity on them for a while. Make small purchases on cards a couple of times a year, then pay them off right away, to keep accounts active and your available credit up.

Pay your bills on time: This should an easy one, but could prove challenging if you run into hardship. Contact the credit-card company as soon as possible if you're having problems paying your bill. Payment history counts for about 35% of your credit score.

Avoid new cards: Store cards are tempting when they offer discounts at the register, but don't bite. Applying for that card will have a negative effect on your score short term.     

Having issues or questions about your credit score.  At Weichert Financial Services, we can help. With our new "Credit Assure" Model, we can potentially help you improve your credit and perhaps qualify you for a program or better rate that you may not otherwise have been eligible for. Ask us how!  We are here to help!

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If you need assistance with understanding your credit or need help improving it, please contact me and I'll get you on the right track.  Call me anytime at 571-233-7369.

Warmest Regards,

Linda

Comments (1)

Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  We invite you back to ActiveRain in 2017. 

  We would welcome your return!

Sep 17, 2017 07:27 PM