Improving Your Credit Score

Living my care-free Dog life-style, I don't have to worry about a credit score... but you do....

Credit 101: How to Improve Your Credit Score.

1 The Score is different from the report. A credit score is a number that reflects the historical credit information on a credit report. The number indicates a person’s likelihood of becoming delinquent on a loan or credit obligation in the future. The higher the score, the better the terms of the loan such as a lower interest rate.

2. Review your credit report before shopping for a mortgage. Tell your clients about www.annualcreditreport.com where every year you can get one free credit report from each of the three major credit bureaus (Experian, Transunion, & Equifax).

3. Errors on a credit card report can be fixed. Clients can be encouraged to seek counseling to better understand their credit report, spot problems and work to fix them. To find a HUD-approved housing counselor in your area, call 1-800-569-4287 or www.hud.gov/counseling.

4. Ordering one credit report will NOT negatively affect your credit score. What does have a major impact on your credit score is payment history. Whether you pay your bills on time and pay them in full matters. Another factor is outstanding debt. If you’re maxed out on your credit cards, it can be a problem. The longer your credit history, the higher your credit rating so it’s not good to close an unused credit card.

5. A good way to raise a credit score is to reduced debt. Lenders look at total debt of no more than 36 percent of income including house payment. It’s a good idea to get installment debt (car loans, student loans, credit cards) down below 20 % of total income.

6. Only time removes accurate negative information in your credit report. According to the Federal Trade Commission, a consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years.

7. Some government programs allow for a lower credit score. Visit www.yourillinoishome.com or www.craigtinder.com (to find a broker to assist you)

Different Credit Reporting Bureaus use different credit scores.

The FICO Score (ranges from 300-850) The Vantage Score (ranges from 501-990)
1. Payment History (35%) 1. Payment History (32%)
2. Amount Owed (30%) 2. Utilization (23%)
3. Length of Credit History (15%) 3. Balances (15%)
4. New Credit (10%) 4. Depth of Credit (13%)
5. Types of Credit Used (10%) 5. Recent Credit (10%)
6. Available Credit (7%)

For More Information; Contact a Mortgage Broker/Banker.
Visit the website: www.Craigtinder.com to find two recommended mortgage broker/bankers or feel free to call Craig at 847/638-5522.