Cleaning up your Credit

Your credit score can either save you money or cost you money. It can stop you from getting a job and keep you from getting insurance. It pays to understand what you can do to make it the best it can be.

Get Your Credit Report and Scores
By understanding your credit report, it will tell what actions you need to take to ensure your credit score is as high as possible. Equifax Gold Credit Monitoring allows you to run your credit report free every month.

Step 1
30% of your credit report score is attributed to credit balances. Keep your existing balance at or below 45% of your available limit. It is therefore important that all creditors report the available credit - or high limit on your credit report - or it harms your score. So get the credit company to add the limit to your report, or don’t do business with them.

Step 2
35% of your score is made up from your actual payment history. Whatever you do, make your payment within 30 days of the due date. Only 30+ days late will appear on your credit report. One way to build up your credit is to use your credit cards for everyday purchases; then pay your credit cards in full monthly.

Step 3
15% of your score is based on credit history. So it is important not to close your credit accounts that have been opened for a long time with a good rating. Longer credit history equals a higher score.

Step 4
Keep a good mix of your accounts. A good mix would consist of 3-5 credit cards, an installment loan (auto), a mortgage rating. Also inquiries impact your score by 10%. Each inquiry can impact your score by 5 points.

Step 5
Do you have high debt levels (over 5K in debt)? www.CareOneCredit.com will negotiate your debt with your creditors and help you lower your payments. The short form is free; you have nothing to lose if they can’t save you money.

Know the Score: Three Steps to Better Credit

If you are looking to buy, invest in, or refinance real estate now or in the coming months, your credit is going to play a more significant role in today's tight-fisted credit environment than it has in the past. It's that simple. Would-be borrowers need to address any and all credit issues now to avoid having to pay for it later.

But, here's the kicker. Nearly 80% of all credit reports contain errors of some kind. Recent studies also indicate that about one-fourth of these reports contain mistakes so egregious that applicants could actually be denied credit! Don't let this happen to you.

Step One: Get Your ReportThe three main credit bureaus, Equifax, Experian, and TransUnion, are required by law to provide you with a free copy of your credit report once every 12 months. To request your free copy (one from each company) visit http://www.swiftpage6.com/SpeClicks.aspx?Acc=HomesteadMortgage.Dania&SPCED=C081105110400&LNK=0&UId=18 or call 1-877-322-8228. Please note that free credit reports do not include credit scores. Scores can either be purchased online or pulled by your mortgage professional.

While you're online, be sure to visit http://www.swiftpage6.com/SpeClicks.aspx?Acc=HomesteadMortgage.Dania&SPCED=C081105110400&LNK=2&UId=18 as well. This will help you avoid the hassle of becoming a "trigger lead" and being bombarded with unsolicited mortgage offers, and make life a lot easier throughout the mortgage process.

Step Two: Report InaccuraciesStudy your credit reports and make sure everything is accurate. If you do find any discrepancies, you can legally dispute mistakes or outdated items for free. Once notified of a mistake on your report, a credit bureau has thirty days to investigate and respond. If the information can't be confirmed, then the item should be removed. If you'd like more information on this process, give me a call. I can help you compose a dispute letter to help get you started.

Step Three: Meet With Your Mortgage Professional

Now that the information on your report is accurate, what if there are still some items in your credit history you would rather forget about? All is not lost. For some, small changes to your credit profile could yield big results that could save you thousands of dollars. For others, enlisting the services of a professional credit improvement company may be required. This important process can take up to six months or more, so don't wait. Give me a call. An experienced mortgage professional can share other insights into the ins and outs of credit scoring and credit repair.



Provided by The KEY Team - Preferred Lender:
Toby Wonder, Mortgage Consultant
Homestead Mortgage, Bellevue, WA
Office: 425-274-9524
Cell: 206-910-4766
twonder@homestead-mortgage.com
www.tobywonder.com