7 Great Ways to Improve Credit
Banks will use your FICO (Credit Score) to determine your creditworthiness when applying for a purchase or refinance loan. The score is created from credit information that is compiled from the three major bureau's Experian, Equifax and Transunion. Investor's will normally use the middle score of the three bureaus when underwriting a loan application. The suggestions below are ideas that you can use to maximize your score which will help you when applying for a home refinance loan or home purchase loan. Complete a Quick Quote to speak with a representative on one of these loan options.
1. Review a copy of your credit and dispute any errors: When looking to rebuild your credit or improve your score getting a copy of the report and analyzing it in detail to see if you have any discrepancies is a great place to start. Tax liens, collections, payment history errors and other mistakes can attach to your credit and bring down the score. Any error that you can document is incorrect should be disputed with the bureaus and removed.
2. Pay Down Balances: One of the major factors in your credit score is how much revolving credit you have compared to how much you're actually using. The smaller that percentage is, the better it will be for your credit rating. Having a balance that is 10% or lower than the credit limit is preferred but if you carry high balances try to get under 50% and then 30% of the credit limit.
3. Set Up Automatic Payments: This is the easiest way to avoid getting a late payment on any of your accounts. Managing our daily lives can be difficult and forgetting to pay your mortgage, car loan or credit card payment is something that can drastically affect your credit score. Setting up the automatic payments can be a great tool to deter us from having any late payments on our credit.
4. Too Many Accounts with Balances: Some people carry numerous lines of credit. In this case it is probably best to try and remove some of the smaller accounts that you carry and lessen the amount of accounts you have with balances.
5. Increase card Limits: When getting a credit card especially connected to a retailer it is a good idea to know your limit and if it is very low see if you can get it increased. Retailers will sometimes issue cards with extremely low limits that could be maxed out with a few purchases. Keeping the balances on our cards low compared to the limit is very important and can become a problem with low limit cards.
6. Subscribe to a credit monitoring system: Having a second set of eyes reviewing your credit every month is a good way to watch your improvements and catch any errors that could happen. These services will notify you when you have changes to your balances, payment history etc…
7. Be careful with joint accounts: Sharing an account with a spouse, sibling or friend can be difficult so make sure that if you are on a joint account or co-signer on a card that you follow the account closely and make sure you are on the same page with the balance to limit ratios as well as the payment history on the account.
Banks will use your FICO (Credit Score) to determine your creditworthiness when applying for a purchase or refinance loan. The score is created from credit information that is compiled from the three major bureau's Experian, Equifax and Transunion. Investor's will normally use the middle score of the three bureaus when underwriting a loan application. The suggestions below are ideas that you can use to maximize your score which will help you when applying for a home refinance loan or home purchase loan. Complete a Quick Quote to speak with a representative on one of these loan options.
1. Review a copy of your credit and dispute any errors: When looking to rebuild your credit or improve your score getting a copy of the report and analyzing it in detail to see if you have any discrepancies is a great place to start. Tax liens, collections, payment history errors and other mistakes can attach to your credit and bring down the score. Any error that you can document is incorrect should be disputed with the bureaus and removed.
2. Pay Down Balances: One of the major factors in your credit score is how much revolving credit you have compared to how much you're actually using. The smaller that percentage is, the better it will be for your credit rating. Having a balance that is 10% or lower than the credit limit is preferred but if you carry high balances try to get under 50% and then 30% of the credit limit.
3. Set Up Automatic Payments: This is the easiest way to avoid getting a late payment on any of your accounts. Managing our daily lives can be difficult and forgetting to pay your mortgage, car loan or credit card payment is something that can drastically affect your credit score. Setting up the automatic payments can be a great tool to deter us from having any late payments on our credit.
4. Too Many Accounts with Balances: Some people carry numerous lines of credit. In this case it is probably best to try and remove some of the smaller accounts that you carry and lessen the amount of accounts you have with balances.
5. Increase card Limits: When getting a credit card especially connected to a retailer it is a good idea to know your limit and if it is very low see if you can get it increased. Retailers will sometimes issue cards with extremely low limits that could be maxed out with a few purchases. Keeping the balances on our cards low compared to the limit is very important and can become a problem with low limit cards.
6. Subscribe to a credit monitoring system: Having a second set of eyes reviewing your credit every month is a good way to watch your improvements and catch any errors that could happen. These services will notify you when you have changes to your balances, payment history etc…
7. Be careful with joint accounts: Sharing an account with a spouse, sibling or friend can be difficult so make sure that if you are on a joint account or co-signer on a card that you follow the account closely and make sure you are on the same page with the balance to limit ratios as well as the payment history on the account.