With all the changes going on in the financial markets it is getting harder to get financing for a home
mortgage loan in Redding and Shasta County and now your credit score directly corresponds to the interest rate you qualify for. Having good
credit can save you thousands of dollars a year on a home mortgage loan.
Here are some simple tips to maximize your credit scores..
1- Pay your bills on time. Setting up automatic payments with your account holders or with your banks can take the work out of paying bills. But make sure the payments are received no later than 30 days past the due date.
2- Balances. Keep balances on credit cards and other revolving accounts below 40% of your credit limits. 25% is optimal and will result in the absolute best credit scoring. Remember owing a high balance on one
credit card and paying off a credit card to 0 is not the same. You want your credit debt to be distributed through all your accounts.
3- Keep your credit cards open. Unless you have over 6 credit cards, or the account has been opened less than two years, closing out credit accounts can actually hurt your credit score. Credit scoring programs assume that people who have had an account for a longer time are less of risk in defaulting on payments. Charge something on your accounts every month. It can be one tank of gas a lunch, anything small will do.
4- Contact creditors that have reported late payments and request a good faith adjustment by removing the reports of late payments on your account. Be polite and ask specifically for the adjustment. It may require more than one call to accomplish this.
5- Pay off collection accounts, but only if the collection agency is willing to delete the report in return for your full payment. Contact the collection agency and request a letter stating the agency’s agreement to delete the account upon receiving payment from you. Paying off this account without the agreement to delete the account can actually hurt your credit rating due to the fact that the last date of activity will be updated to the day you make the payment.
6- Pay off delinquent accounts that are not in charge-off status.
7- Get rid of any charge-offs or leans that are less than 24 months old. These effect your rating far more than those that are more than 24 months old.
8- Don’ t open unnecessary new accounts. When you go to the mall and they ask you if you want to save 10% on your purchase by opening a credit account, SAY NO... Also if you’ re shopping rates on a auto loan or mortgage loan do it within a 30 day period. If you keep credit checks within that window it should only effect your credit as if it was checked once.
9- Credit scores are higher when you have a good mix of open accounts/trade lines reporting. 2-4 credit cards, 1-2 cars, 1-4 mortgages. This is a good example of what they would consider a good mix of credit
Review your credit at least once a year to make sure the information being reported is accurate. This can be done with a free source like freecreditreport.com.
Chris Lamm is a Mortgage Banker and is President of Redding Lender in Redding, CA (Shasta County). Chris has been coaching his clients to have and maintain good credit for over 10 years, and is very familiar with the FCRA (Fair Credit Reporting Act) as well as the FDCPA (Fair Debt Collections Practicing Act). Chris has worked along side of some of the largest debt settlement firms and attorneys firms in the country assisting consumers with becoming financially free while learning how to establish and maintain good credit. For a free consult feel free to email Chris.
Contribution by Jamison Law Group Offers Advice on Raising Credit Score Date: July 18, 2009 LOS ANGELES, CA United States of America