by Gaye Jones ~ AnnieMac Home Mortgage
In today’s world your credit is used for more than just applying for a loan. Credit can be used to determine insurance rates, and even many employers pull credit. Here are a few rules to follow to give you the best scores.
1. Never be more than 30 days late on any debts
2. Keep your revolving account balance below 35% available credit. If you can get that balance below 15% your score will be even higher.
3. Do not max out any revolving accounts. Over 75% of the available credit lowers your score and if you go over your credit limit it drops your score substantially
4. Collections. If you receive a notice of something going into collections don’t ignore it, you need to negotiate payment.
5. Do not close accounts. You can pay off an account, but if you close revolving accounts it can lower your score by up to 50 points. Let the creditor close it for “non-use”.
6. Agencies like to see you use your credit cards responsibility. If you can pay more than the minimum payments due that helps your score.
7. If you want to purchase a new automobile, I suggest you go to your local bank or credit union and get pre-approved first. Dealerships send your info to several lenders that pull your credit which all those inquiries will lower your score.
8. If you dispute an account, follow up and make sure the dispute is removed after the resolution. Disputed accounts block your from getting a mortgage.
9. Thin credit or no credit can be as bad as low credit. Agencies like to see 3 lines of credit with 12 months reporting to give you the best score.
10. Once an account has been charged off it does not help your score to pay it. Derogatory credit over 24 months is rarely scored – so time is the only recourse.
As always, it’s best to use a local experienced agent for your Mortgage needs.