Dealing with Credit Challenges

By
Services for Real Estate Pros with Genesis Credit Corporation

genesis credit lafayette indiana.jpgUnfortunately, a person with a bad credit score is often in this position because he or she lacks the discipline to pay bills on time.

Of course, there are exceptions where unforeseen circumstances come into play, such as health complications, or loss of employment

There are a few things that may be able to bring your score up so that you can secure a better interest rate on your mortgage loan.

Example 1: Distribute debt from revolving credit
Our borrower, Mr. Jones, has a credit score of 664.  He has five credit cards, but his Visa account is almost maxed out.  His other four credit cards have relatively low balances.  Mr. Jones moves the part of the debt from the Visa account to the other major credit card accounts, thus distributing the debt more evenly over the five cards.  This changes the ratio of debt available credit (which has a 30% impact on the overall credit score), and Mr. Jones successfully raises his credit score by 20 points with very little effort.

Example #2: Transfer outstanding balances to new accounts
Our borrower, Mr. Smith, has only two credit cards; both are pushing the limit of available credit.  Mr. Smith opens two new credit card accounts, each with a credit card limit of $5,000.  He transfers part of his existing balances to the new accounts.  While he has acquired two new cards that have no established history, the greater impact is the change in the ratio of debt to available credit.

Ultimately, experts say that is best to have two to five credit cards, and no more than that.  You should keep your balances as low as possible.  If you have a credit account with a zero balance, do not close the account.

Instead, make a small purchase so the card shows up as an active account on your credit report, and you will be awarded points for your long-term credit history.

Local Credit Resource:
Genesis Credit Corp.

Currently Serving: Greater Lafayette, West Lafayette,Purdue, Tippecanoe County, Indiana and the surrounding communities. Our Services are Private and Confidential. Your Information is Safe With Us.
http://www.helpyourscores.com/

 

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