I have been reading lately about mortgage interest rates and how they are at record lows. I’m sure you have also heard how hard it is to get a home loan to take advantage of those rates. I want to share some financial tidbits with you and help you find the key to unlock those rates. Although this may seek like a no brainer, it is always good to have a remainder.
Credit scores have become very important to each of us whether we know it or not. As I work with people on improving their housing situation and overall financial picture, credit scores have become an important factor in lowering their costs and improving options. If you are concerned about this; let’s talk.
A good Credit Score is the biggest factor to get the loan so you can get the home of your dreams. Here is a primer on how to do it.
Loan Repayment History
One of the obvious factors is repayment history on loans. If you are late on paying a debt, but not 30 days late or more, then the late payment should not affect your score. I am not saying be late a few days, because often there are penalties involved. Just know that being a few days late is not supposed to affect your scores. Certain obligations also do not show on your credit report (such as utilities in Western Washington or your home phone bill).
Available Credit Limit
Unknown to many is the fact that available credit limit and amount used are factors in your scores. If I have an available limit of $10,000 and I have used $5000 or more, I will lose points on my credit scores. Keeping your amount used under 1/2 of the available will help boost scores.
Who is Your Lender?
If I get credit from a lender who loans at less than the best terms available (such as a finance company), then I will lose points.
These affect your scores on a limited basis. If I am making application all over town or shopping for a variety of things (house, car, appliances, credit card offers …) within a short period of time, say 90 days; my scores will be affected for a short time. Here is something you might consider: if you are over 1/2 on a credit card and you have great credit and you can’t pay it down right away, ask the creditor to increase the limit a bit in order to owe less than 1/2 on the card or obligation. This will lead to an increase in your score since you will owe less than 1/2 of the balance. Be careful not to increase your spending though!
How do I find out my credit score?
Much of the information that makes up our scores is not well known and is proprietary to the different credit bureaus. There are three credit bureaus:
P.O. Box 740256
Atlanta, Georgia 30374
P.O. Box 9554
Allen, Texas 75013
P.O. Box 6790
Fullerton, CA 92834
You can request your free report online, by phone or by mail. Visit AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to
Annual Credit Report Request
Service, P.O. Box 105281
Atlanta, GA 30348-5281
No matter how you request your report, you have the option to request all three reports at once or to order one report at a time. By requesting the reports separately, you can monitor your credit more frequently throughout the year. I recommend selecting three dates throughout the year that are significant to you, to help you remember.
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Contact Sound Financial Enterprise, LLC for more information about your housing needs.