My New Blog

You are bombarded daily with mortgage brokers ads on the record low rates they have to offer.  The problem is, qualifying for these rates can be a real challenge.  Following are six simple steps to improve your FICO score and secure one of those record low mortgage rates for yourself!

1. Pull your credit reports on-line-for free!  Go to AnnualCreditReport.com which is a government authorized website where you can get your credit status for free, no strings attached!  Look for errors such as accounts that may not belong to you, credit card or loans with balances that are actually lower than being reported, and old debts that are paid off and should have been removed (7 years for credit cards/10 years for bankruptcies.

2. If you reopen accounts you thought were open but have actually been closed because of lack of use, you will boost your utilization ratio which is one element of your credit score based on how much available credit you have.

3. A biggie here, pay down some debt.  This will decrease your debt-to-income ratio and increase your credit score if done right.  See step 4.

4. You don't have to close any of your accounts. Instead, spread your debt out.  Closing accounts reduces the amount of credit that is available to you which makes it look like you are close to maxing out available credit.  So if you have one card near its limit and others that have a zero balance, consider transfering some of that balance among the other cards with a goal of 20-30% of available credit on each card.

5. Use credit regularly, HOWEVER, pay on time every time!  Having no credit purchases and having "sound" finances, including no debt doesn't mean a higher FICO score.  FICO is based on your history as a responsible user of credit by smart management and payment of your debt on an ongoing basis.

6. Finally, check in with your mortgage broker occasionally.  Have them pull your report and score. You will have accurate information which may allow you to qualify for a re-fi at a lower rate and they can advise you on additional steps to take to improve your score.  With these improvement steps, they can also directly submit a request for score adjustments with the credit bureaus which could be updated in just a few days.

While these steps wont take you from a 500 to a 700, they will improve your score and qualify you for that next best rate or for a re-fi on your current home.

Thanks for reading this lengthy blog. There is a lot of good information here. 

Remember, I am never to busy to assist you or anyone you know with your/their next real estate transaction.  I grow my business one client at a time!

Have a great fall!

Mike