We have all heard the saying, "Who keeps score anyway?" Well, right now, everyone is. Now, more than ever your credit score carries a lot of weight. It was not that long ago, a few blemishes on your credit report did not really affect you much. Beyond a doubt, that has changed. A credit score below 620 can make it very difficult, if not impossible, to be approved for a loan. If you do get approved, it will be at higher rates. So is there anything you can do to improve your score? There is a good chance there is. The first thing to do is know your score.
Credit Scores can range from 300-850. The higher your score, the better your credit rating will be. So how do you find out your score? You can get a free copy of your credit once a year. You can go to AnnualCreditReport.com, which is the only authorized source for consumers to access their annual credit report online for free. Once you have a copy of your report, the first thing to do is check for errors. Errors lower your score and can be corrected. Make sure all accounts listed are yours. Late payments, charge offs, and collections noted on these accounts lower your credit score. Let the reporting agency know these are not yours.
Second, check your account notations. Do any of them list you as late or charged off when you know you weren't? Check for any derogatory notations that are not accurate, like an account being noted as settled when you actually paid in full. Old accounts should fall off after seven years. If they are still showing and have any negative information, ask for them to be removed. Just fixing these mistakes can increase your credit score.
There are some long term goals you can set to help your score as well. Try paying down your credit cards as much as you can. This helps your debt to income liability become more balanced. Most lenders like to see you below 30% of your credit limit. Any amount you pay down the cards will shave a few points off your score even if you cannot achieve the ideal.
It used to be that lowering your credit limit was a good thing, but not anymore. Remember, you do not want to work hard to pay down your card and then lower your limit. This makes it look like you have maxed out your card when actually you have worked hard to pay it down. Another long term goal is making sure you pay your bills on time. Don't panic if you do miss a payment. If you pay history is good, you might ask the lender to remove the late payment as a customer courtesy. All they can do is say no, but it does not hurt to ask. Someone really is keeping score. The more effort you put in to making that score as high as it can be, the more likely you will be able to get the loan and interest rate you want.
If you are looking to score your dream home and don't know where to start, contact Sandy's team at (225) 677-SOLD or email info@sandyco.com We are here it help you in East Baton Rouge, Livingston Parish, and Ascension Parish.
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