The one game in life you have to play...

The one game in life you have to play...

The Credit Score Game

Whether we want it or not, we all have a number slapped next to our name called our "Credit Score".  It can help us or hinder us based on how high or low it is. (If you follow my blog, you might remember that I previously wrote about how to play the credit score game, you can read it here.) Anyways, I'm very passionate about explaining credit scores to my clients. In every pre-approval meeting, I take the time to go over their credit report, show them why their score is the way it is, how credit scores work and then we make specific plans together. Plans to raise their scores and reach their goals! Here's what I share with them:

KEYS TO HAVING HIGH CREDIT SCORES     

• Pay all your bills within 30 days of due date.
• Maintain a low balance/limit ratio on credit cards.
• This means not allowing your credit card balances to exceed 50% of the card’s limit, but preferably 25% or below. Example: credit card with a $2000 limit you’ll want to keep the balance below $1000 at all times, preferably $500.
• If you pay off your credit card every month in full, make sure that your limit is high enough so that your average monthly balance is
• Pay off all collection accounts and judgments.
• Develop long histories with card companies. Don’t open and close cards too often or it will bring your score down.
• Pick one or two credit cards and stick to using them only. Having too many cards with balances can have a negative affect. 

TIPS FOR NEGOTIATING COLLECTION ACCOUNTS

• Most collection company representatives are trained salesman. Be on guard!
• The last business day of the month is the best time for negotiating down balances.
• Negotiate down your balance to 35-45% of what you owe.
• Don’t tell them you’re trying to improve your credit scores, it could hinder the negotiations.
• Have the money already saved up to pay them off. Payment plans don’t help with negotiating.
• Let them know if they’re not willing to take your money, then you’ll happily give it to the next creditor.

PREVENTION IS KEY!

Every credit bureau offers a free credit report every year. Pull it once a year to make sure nothing fraudulent is reporting on it. Check out: www.annualcreditreport.com. 

Having high credit scores can help you in many areas, such as refinancing your home to a lower interest rate or getting into a better loan program. Call to discuss today!