Step by Step Improve your Credit Score and receive a better Mortgage Rate

     As Realtors we realize the importance of your credit score.  It along with your debt to income ratio are the two most important factors in determining your credit eligibility.   Your debt to income ratio shows the lender your ability to pay and your credit score gives the lender a picture of your credit repayment history.   The lender will be able to combine these two items along with some less important items and tell you how much you can borrow and what will be the best mortgage loan for you.   It is hard to improve your credit score overnight so it is important to start improving your FICO score now!  

1) Check your FICO score - You can request a free report, once a year, from the major credit reporting bureaus like Equifax.  You can also purchase a report. These reports will show the positive as well as derogatory information about your credit. 
2) Analyze this report!   As a rule – using a high percentage of available credit is derogatory.  Late payments are derogatory.   Long term accounts are positive.   On time payments are positive.   Is any of the derogatory information on your report incorrect? 
3) Challenge any derogatory information that you feel is incorrect.  You may even challenge items you know are correct.  If the reporting agency does not respond to the challenge then the derogatory information has to be removed. 
4) Try to keep any revolving credit lines below 30%.   Higher balances will be a negative.   Start reducing the higher balances.   A balance of 100% of your available credit is obviously the worst so when you get the balance below 70% that will be better – below 50% will give you another boost – below 30% is excellent.   The best way to reduce these balances is to start!!
5) Inquiries for credit are seen as a negative.   Try not to have your credit checked unless it is important and then only when you have figured out exactly what you want to purchase and where.   For example if buying a car don’t give your credit info to several dealerships.   Figure out which car you want and from what dealership and then give only that dealership your credit information. 
6) Protect your information because it can be really hard to clear up an identity theft problem and be very costly as well.  
7) Don’t be late on your payments.  Any payments over 30 days late will hurt your credit.   Above all pay your debts.   It matters.    If you run into difficulties (and everyone does from time to time) call the lender and work something out.  Negotiate the terms in such a way to not be reported negatively on your credit. 

We can help you with all the aspects of obtaining a mortgage from referring you to a top mortgage professional to helping you with credit repair to pre-qualifying you for a mortgage and in the end finding your dream home.   Wayne and Donna Long are REALTORS in the Columbus GA Real Estate Market.     They have the most advanced MLS Home Search solution in the Columbus GA area.  Contact Wayne or Donna Today. 
    

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