How to fix your credit scores and get better rates when you buy on credit. These fixes will help you get better rates First lets start with what are credit scores, credit score ,also called FICO scores tells a lender if you pay your debt on time or not, how much outstanding debt, helps lenders make a decision whether you qualify for a mortgage, credit card or loan, and for how much. Me & my preferred lenders will show you how to obtain your scores and improve it so that you can get the best possible rates. Credit scores are calculated with information from five categories: Your payment history counts for the largest percentage at (35 percent). If youve paid bills late, had an account in collection or declared bankruptcy, your credit score has taken a serious hit. Usually it takes at least two years to recovery from a bankruptcy and that you continue from that point on keeping debt paid on time. Newer problems have greater impact than older ones. Amounts owed (30 percent). This area accounts for how much debt you have, what type and how close you are to your credit limit Length of credit history (15 percent). Older accounts improve your score, because they indicate that youve been able to maintain good standing. New credit (10 percent). Opening a number of new accounts in a short time frame may decrease your score. The lender would like to see how you maintain good payment history and that can take some time. Types of credit used (10 percent). Having a few different types of accounts (credit cards, retail accounts, installment loans, mortgages) has a positive affect on your score. 3 main lines of credit is required to get a good idea of your spending habits. How do I find out what my credit score is? Once every 12 months, you are eligible for a free copy of your credit report from each of the three national consumer reporting agencies. These reports show whether you pay your bills on time, have filed for bankruptcy and even whether you have been sued or arrested. Credit reports are available at annualcreditreport, the only site approved by the federal free credit report program. Dont use imposter sites hoping to cash in on unsuspecting consumers. I want to point out that you can receive 3 free credit reports, but they will not contain your scores. You would have to pay for those numbers if you want them. You can get all three report at annualcreditreport or you can order your score from each of the three reporting agencies websites Take these steps to improve your credit score To bump up your FICO score, try these tips: Dispute incorrect information in your credit report. If you find errors, complete the dispute form included with your report or write a letter to the reporting agency. In your report, identify the mistakes and clearly state why they are incorrect. Send photocopies of your report with the mistakes circled, and include copies of documents that support your argument. Pay your bills on time. Delinquent payments make a big dent in your score, so do whatever it takes to make sure that you pay your bills on time. Set up automatic debits and payment reminders so that you dont miss another due date. Minimize your debt. Pay off your debt as quickly as you can. Keep balances on credit cards as low as possible and pay off the debt, rather than transferring balances from card to card. Settle any debt in collections. Contact the collectors to negotiate a pay-off settlement. Make sure you receive the collectors agreement in writing before you send in any payment. Recognize that negative information will stay on your report for a while. Most negative information, if it is accurate, stays on your report for seven years. The exception to this rule is bankruptcy, which remains for 10 years. Its always best to speak with a qualified lender because they are up to date on all new loan packages on the market. While your lender works with you on your road to homeownership, I will show you the types of homes, help you locate the best location, price, etc. Please visit my website fredericksburgareaexpert/ and save the homes you love and we can discuss them. I look forward to assisting you find your next home! If you have any real estate questions please feel free to email or call me. debra.samuels@kw 540 287-8750
Posted on: Fri, 13 Jun 2014 14:13:50 +0000