Improve your credit score!
I have a great/intelligent manager/mentor. I think everyone who knows my situation knows that. Of coarse, like all others in mortgage, we talk to potential borrowers struggling with their credit scores. I have learned that with some advice and a few tips, these borrowers can raise their credit score much quicker than I originally thought. I now realize that someone with a not-so-fabulous FICO score doesn't have to be turned down and asked to "come back in six months or a year" without any guidance. I have learned how to read and analyze a credit score and pick out pieces to advise the borrower on how to get improve their score so that they can be approved for their mortgage loans at better interest rates. I have seen Rodney work with a number of borrowers and I have had the opportunity to work with some myself. It is a very rewarding experience!!
I thought I may share some of these tips with my readers. I know it isn't the most exciting topic, but it is SO important!
You have 3 different credit scores, one for each of the major credit bureaus: Equifax, TransUnion, and Experian. Mortgage lenders pull all three. These scores can differ from each other depending on how your creditors report to the bureaus. You definitely want to make sure that when you are doing the right things to improve your credit - that your creditor is reporting to all the bureaus!! This isn't something that you can control, but it is something that you can inquire about when you open credit accounts.
So, how does one improve a credit score?
1. Make sure that you know what is on your credit score. You are entitled to one free copy per year from each bureau. The only authorized online source for a free credit report is www.annualcreditreport.com. Look for misreported delinquencies, over-reported loan amounts, and under reported credit limits. Be sure to request correction from the bureaus in writing.
2. Pay your bills, ON TIME! If you have trouble doing this, set up payment reminders or have payments automatically deducted.
3. Focus on paying off those credit cards. Paying down your revolving accounts will have a much larger impact than paying off your installment loans.
4. Use your credit cards, but don't max them out. A good rule of thumb is to not have a balance more than 30% of your credit limit.
5. Don't apply for a lot of different credit at one time. Credit pulls affect your credit score, so don't go shopping for a car, home loan, new furniture, new department store card, etc. at one time.
Here is a great resource: http://www.consumer.ftc.gov/articles/0155-free-credit-reports
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