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Raising your Credit Score

posted by Stephen Katz @ 2:31 PM
Wednesday, May 8, 2013

Investing in Real Estate requires good credit unless you can pay entirely in cash. Even if you could there would come a time that the money would run out. Even the wealthiest of investors use credit. The better your credit score the better the rate, terms and higher loan to value (LTV) you can qualify for. With rates as low as they are you should consider buying property because you can lock in thirty year fixed rates that allow you to have great cash flow.

Remember that nothing will make your credit score jump one hundred points overnight but there are definitely changes you can make that over time will significantly change your credit score. When a credit report is pulled the score that shows up is simply a snapshot in time. It is the score represented by the information on your report on that very day. The first thing you should do is to obtain a copy of your credit report. By doing this you will see exactly where you are so you can determine where you want or need to be.

Here are some important ways to improve your score:

Pay all of your bills on time, especially your mortgage. When applying for a mortgage loan the underwriters look at pay history on your current mortgage or mortgages more than any other type of account. I’m not saying be late on the other bills, I’m just saying that if there comes a time that you have to make a choice of paying the credit card or the mortgage payment, always pay the mortgage.

Close accounts that you don’t need. Meaning, don’t close accounts where you still have outstanding balances just so you can’t charge anymore. This may even hurt your score. What I mean is that as soon as you can pay off an account and you can do without it, contact the creditor and have them close the account.

Don’t open any new accounts that you don’t need. This may actually lower your score by having too many accounts open, which is one of the ways your credit score is determined.

Don’t co-sign for anyone. Way to often people will let someone use their credit to obtain a loan, usually to buy a car. I don’t recommend it. If you must help a family member buy a car or get a credit card make sure that YOU receive the payments from them and YOU send the payments to the creditor so that you know for sure that the bill is being paid on time each month.

Keep some credit cards and use them wisely. Someone without credit cards could have a lower score than someone who does. You need to keep one or two cards and use them responsibly. Pay them off each month if you can.

Don’t open too many accounts too quickly. By doing this it appears that you may be setting yourself up for failure to a lender. New accounts also will lower your score until they become seasoned with a good pay history.

Check your credit report for mistakes. There could be items on your report that are not yours especially if you have a common name.

Don’t shop for a car or anything else where they will be shopping your loan. Many car dealers will send your application to numerous lenders. Each credit inquiry will drop your score by a few points. A few points may or may not make a difference depending on your current score.
Ordering your own report will not affect your score.

Keep credit card balances low. If you balance is at or near your limit this will lower your score.

Don’t consolidate credit cards. Moving consumer debt around will not help in the long run. Simply pay down the ones that have the highest rates first.

Pay off any outstanding derogatory items on your report. Even if they are old it will look better to have a zero balance.

I hope this has helped. There are three different credit repositories, Equifax (800-685-1111), Transunion (800-888-4213) and Experian (866-200-6020). It is a good idea to get a copy from all three.

Stephen Katz

(770) 309-0939 (direct) or (866) 742-8400 —

For the past 18 years, Stephen Katz has built a successful business almost entirely on referrals. As your mortgage consultant throughout the home loan process, Stephen will explain the pros and cons of all available mortgage programs and help you choose the financing option that is best suited to your needs.
Throughout the loan process, he will keep you informed and will respond quickly to your requests with answers and solutions.

Consistently a top producer, Stephen is a Mortgage Bankers Association “Diamond” Award winner, a Georgia Mortgage “Top Gun” and has closed almost half a billion dollars in loans. Put his knowledge and experience to work for you!

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