The Credit Puzzle - How to Win with Good Credit - A
Segment 1
The Credit Puzzle – How to Win with Good Credit
Barb, many people do not know what is behind a good credit rating. How can a buyer be in a better position to purchase a home by building good credit?
56% of People Do Not Understand What is Behind Good Credit
The Top 3 Reasons FHA Loan Denial:
Credit Score too low
Too Much Debt
Income not sufficient
How Lenders Decide on Home Loan Approval:
General Rule of Thumb
35-45% of GROSS Monthly Income Can be Debt
Includes:
Proposed House Payment
Car Payment
Credit Card Payments
Proposed HOA dues
What is a FICO Score? – Credit Score
Fair/Issac created a math algothym that predicted borrower’s ability to pay into the future
How They Score:
Ways to Improve Score:
1. Always make Timely Payments
2. Don’t MAX Out available credit
3. Keep Low Balances with respect to available balance
4. Apply for New Credit sparingly
5. Keep Old Credit OPEN – use periodically
You are listening to the Real Estate Voice with myself Barb Schlinker of Your Home Sold Guaranteed Realty, if you are interested in selling your and want to call Barb give her a call at 719 301 3900
We are talking Barb about how to qualify for a home by improving your credit. Barb what are some other things our listeners can do to improve their credit?
Check Your Credit Monthly:
Identity Theft is a Risk
Credit scammers everywhere
Consider paying for Credit Monitoring
LifeLock
Experian
Pay Other Bills ON TIME
Rent
Utility
Cell Phone
FREE CREDIT REPORT EVERY YEAR:
HTTPS://www.ANNUALCREDITREPORT.COM
Recent Improvements to Credit Reporting:
1. Third Party Collections that are paid off do NOT have a negative impact
2. Medical Collections treated differently than other types of debt
3. Rental History – factors into the score!
4. Utility & Phone Bill Payment history – factor into the score – Experian Boost
Keep Accounts Open:
1. Length of Time Credit Extended Helps Score
a. Don’t Close Them
b. Use Them at a Small Level
i. Bi Monthly
ERRORS ON YOUR CREDIT REPORT:
1. If Not Yours -Write to the Credit Reporting Agencies
a. Three:
i. Experian
ii. Equifax
iii. TransUnion
2. New Slide:
ERRORS ON YOUR CREDIT REPORT:
Credit Reporting Agencies Must Investigate any Disputed Items
They MUST remove it if they cannot validate those items in 30 days.
Credit Inquiries DO Affect Your Score
Small amount of points
If you are shopping for lenders in a short period of time it only hits one time
NO Credit???
1. If you do NOT borrow money – your score could go to ZERO
2. Lenders can manually score you
Never had credit???
Consider a Secured Credit Card
Deposit $300
Borrow on $300
