How to improve your credit score before you purchase a home will take some help from this book and a little work!

I’ve never written a book review of sorts before but after reading ‘Debt Cures they don’t want you to know about’ by Kevin Trudeau.  I wanted to express how truly exceptional this book can be for consumers. 

If you want a book to explain the credit reporting process in general – this is the book for you!

Bad credit and want to fix it – this is the book for you!

How the credit industry and banking industry are screwing the public – this is the book for you!

Lots of tips?  You bet! Here is a small sampling that I’ve found interesting:

 
Increase your credit score and stop messing things up for yourself with this formula they don’t want you to particularly know about.  Play their spread!  The FICO credit score system only wants you to use 30%-35% of your available credit on each card. Spread out what you owe, so no one card has a high balance.  Do not max out your cards!

Play their game by asking for an increase in your credit limit – do not make more purchases but to use the ratios stated above.  This can boost your credit score by 50 points!

Example of different credit scores and how it effects your payments.  Credit Scores make all the difference in the world!

Doug        $275,000 Mortgage Credit Score 700 Interest rate 5.6% $1579.00

Tom $275,000 Mortgage Credit Score 675 Interest rate 6.1% $1666.00

Dave        $275,000 Mortgage Credit Score 620 Interest rate 7.3% $1885.00

Tom will have paid $31,596 more in interest dollars than Doug.  Dave will have paid $110,377 more than Doug at the end of 30 years.  Let's face it, poor Dave is getting screwed.

Shave years off your mortgage by ‘Splitting your Mortgage Payment’.  Most mortgages now allow for prepayment so an idea is to ‘split’ your total payment ($4000 as an example) into weekly installments of $1000 each. Just be sure your ENTIRE payment is there by the 1^st of the month or your due date.

 
This one I have heard before but it bears repeating. Paying any extra with your regular payment will reduce your mortgage by years. It doesn’t have to be huge sum; it can be only $50 per month.  Suggestion – you’ve just paid off your car – take that payment that you are already used to budgeting and put it towards your mortgage.  It all makes a difference!  And the idea is to keep your money IN YOUR POCKET.

Money Merge Account and Mortgage Accelerator Loan

 
This was a new one for me and both plans are designed to pay off your mortgage in one-third to one-half the time. So new things are available with more on the horizon!

FICO Scores Matter – It’s a very big deal!  Check out these payment differences.

Suggestions to combat this problem and where to file a complaint if it has happened to you would be the Illinois Attorney General’s Office.  Most of the lawsuits that have been file against the credit card companies started in the Attorney General’s Office.  Don’t forget these people work for you!  The Better Business Bureau in my opinion no longer has any effective ‘teeth’ for the consumer.

Universal Default – What a scam!  If you are in default with one credit card or lender, you could be zapped by your other cards. The average default credit card rate is somewhere around 24%.  I bet you didn’t know that this could happen to you and it’s completely legal.  Think about how stupid this is if you ARE having financial problems, so the credit cards double your interest rates and then REALLY cause more problems!

So the main purpose of this post is to remind you to monitor your credit information on a regular basis and know your FICO score.  Doing any credit repairs and corrections should be done PRIOR to looking for a home and possibly with the mortgage pre-approval process.  Most lenders are very credit saavy and can help you get things cleared up fairly quickly.  But just don’t sit there until you want to buy a home!  Get started now with your ‘financial education’ and get proactive. Some things might take time to straighten out if there are mistakes on your report possibly holding up your home sale.

So I recommend reading this book is ‘Debt Cures’ by Kevin Trudeau.  Not having a good ‘credit education’ can be costly!

I proudly serve and sell real estate in the Northwest Suburbs of Chicago.  If you are thinking about purchasing or selling your home in the communities of Schaumburg, Hoffman Estates, Elk Grove Village, Roselle, Palatine, Medinah, Itasca, Bloomingdale, Carol Stream, Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and more importantly, want to work with a local area expert, contact me immediately.