Building your credit score and adding a valued service.

Real Estate Broker/Owner with The Hilbun Team DRE# 01872559

Building your credit score is easy!  Have you ever been denied a loan because of your credit score?  Never, right?  Of course!

I can't stand the phrase, 'just build/work on your credit and you'll be perfect!'  What did they mean by, 'just work on your credit'?  They never taught me that in school, my parents always told me that my credit score was important but no one could ever explain it! If there's one thing they should teach in school, it's the importance of a credit score and how to maintain your credit.

Knowing how credit works is adding value to a real estate agent's services!  You can help your client understand how to build their credit! 

Let's break it down.  There are 6 factors to building and maintaining a credit score:

1. Percentage available on your credit cards.  To maximize your credit score in this area, it's necessary to keep your available balance at 85% or higher or use only 15% of your total credit limits.  Also, multiple cards are not bad!  However, it's recommended to only have 2 major credit cards to maximize your score.  Secured credit cards are a great tool to re-build credit!  Many credit unions have great rates for these types of cards, research your local banks to find the best deal.

2. Hard inquiries on your account.  Many people believe if you check your own credit it will hurt your score, WRONG!  Those types of inquiries are referred as soft inquiries and they cannot hurt your score no matter how often you want to check.  Hard inquiries come from when you want to get a loan for a home, car, credit cards, apartments, or anything that will extend credit.  To maximize your score keep these to a minimum, 0 inquiries is great but almost impossible.  Keeping these inquiries at 1-2 is a great way to maximize your score.

3. Open Installments/Loans.  These are car loans, student loans or any other bank loans, keep these to a minimum.  If you have them, keep the payments on time!  A long history on these will help in the long run.

4. Bankruptcy or Public records.  These are bad and will stay on your record for up to 10 years!  Public records are civil suits.  Even if you have a bankruptcy, foreclosure or even a short sale it's not the end of the world.  Rebuilding is simple and you can purchase a home again in 2 years.  Follow steps 1-3!

5. Delinquent accounts.  Pay your bills and pay them off!  Don't let them go to collections.  Always check your credit for these types of accounts, they can come out of nowhere!  This is also a major fraud area, cell phones, car loans, etc.  Check your credit on a regular basis, remember it doesn't hurt your score!

6. Mortgage.  These are positive as long as your payments are solid.

Your credit score can improve rapidly if you follow these easy rules.


Comments (5)

Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,GRI,SRES, Brea,CA, Orange Co

Hey Craig,

Just thought I'd check this out, I did a FICO post some time back, thought I might learn something from you update.

Your post is good info for eveyone!

Apr 09, 2010 04:18 PM
Craig Hilbun
The Hilbun Team - Lake Elsinore, CA
Your Neighborhood Agent

Thanks for the heads up!  I'll be sure to check our threads from here out.  Consider this my 'new kid on the AR' post!

Apr 09, 2010 04:26 PM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Craig - Thank you for sharing an informative and helpful blog.


Apr 09, 2010 05:08 PM
Bryan Watkins
LRA Real Estate Group - Mesa, AZ

Craig, building a credit score is more valuable than gold. good points.

Apr 09, 2010 06:08 PM
Daisey Hilbun
Hiltop Realty - Lake Elsinore, CA

Great information, I would have found that useful from our first agent we used!  Very nice!

Apr 14, 2010 03:07 PM