The following article was sent to me by a lender I know and trust. She writes about how a person can raise their credit score over time. It is very informative and worth reading. If you have any questions or need help evaluating and improving your credit score, give Karen Simpson-Hankins with Academy Mortgage a call at 541-420-5736. In turn, if you are looking to either Buy or Sell property in the central Oregon, please let me know.

 

Raising your credit score is a task that must be accomplished over time. The credit score is an assessment of credit history factors. Therefore, it is generally impossible to change your score during the short period of time you are applying for a loan.

As such, it is important to be aware of the positive and negative variables that affect your rating so that you can improve your credit score before you need to use it as a tool to obtain a loan. You can improve your credit score a little each year (by as much as 50 points) by careful management of your credit obligations.

Positive Habits

  • Develop habits that promote good credit history (make payments on time, pay down cards leaving available balances, etc)
  • Monitor all three credit reporting bureaus (to ensure accurate reports)
  • Obtain credit reports annually and request corrections in writing
  • Alternative lending sources can help re-establish credit and recover from damaged credit history. They often charge higher interest rates to reduce their risk, so take that element into consideration when considering, whether or not, it’s worth it.
  • Create a savings account. Money down is a positive motivator to a lender as it reduces the credit risk
  • Pay timely even if the bill is not a loan (such as your utility bills)
  • Explain one-time digressions; lenders may take it into consideration
  • Check into getting a secured card by placing a good faith deposit with the creditor to help reduce the risk

Negative Habits

  • Don’t request a series of credit checks in a short period of time, lenders presume unstable credit conditions (However, lenders understand that vigilant credit managers will monitor their own credit reports to keep them accurate and positive)
  • Don’t take on more credit than you can consistently manage
  • Don’t max out your credit cards
  • Don’t spend beyond your ability to pay – lenders are not going to want to fund extravagance beyond your economic abilities
  • Don’t quit building credit because of a setback such as a bankruptcy go to work re-establishing credit (even a small consumer loan allows you to rebuild a good payment history)

Many lenders are more concerned with what you have done since a derogatory incident than what happened before, say, a bankruptcy.

Don’t use credit repair companies that claim to clean up or “fix” your credit, whether the items are correct or not.  They are using the Fair Credit Reporting Act (FCRA) to often manipulate the 30-day investigation process.  Sometimes if works, sometimes it doesn’t.  They will charge a fee for their services, and that fee can be very expensive with no guarantees.  If the item is correct and someone misrepresents it, the lender may considered those type of actions an act of fraud.  Don’t go there…

Your best action will be to fix things yourself!  Don’t leave errors undisputed; request corrections in writing.

For more detailed information on how to improve your credit score or talk to me about aCredit Readiness Review,  please contact me Here.
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