If you are considering a mortgage in NC, then you probably need to know more about Mortgage Credit Scores, and the minimum credit scores needed to qualify for a mortgage in NC. We counsel folks about this all the time, and we’ve found that what kind of credit cards you use, the balance on those credit cards, and which cards you pay off… ALL make a difference to your over all credit scores.
I recently read a report that said:
“Several of my clients are in the credit restoration business and a recent conference call with some of the heavy hitters in the business revealed an astonishing new update to how the FICO score is computed.
Balance management – that is the practice of getting the “balance to available credit” (similar to ltv) below 50% and ultimately to below 30% for maximum benefit, “NO LONGER appears to improve the score” was the quote on the conference call.
It was a common, and very simple way to get a few point increase in FICO score was to transfer balances across cards, or pay down across cards to get the balances below 50 and 30% of the available credit line.
Another common practice if there was no room on other cards or no cash to pay balances down was to call the credit companies and request an increase in the available credit limit – which would result in an improved ratio and a better score. It appears this is NO LONGER the case.”
In review of our recent files… we do not feel this is accurate information. Our files show that folks who pay their accounts down to at lest a 50% level do have an improvement in their scores. Current wisdom shows us that we will need to get the balance paid down on most account to a 30% basis.
So, when you have an extra $50, which credit card do you pay down first? Well, our suggestion is that you pay OFF the first stack as fast as possible. Not just down to 50% balance versus Credit Limit… these are the ones you really ought to cut up and close. Do NOT use STORE credit cards if you can help it! It’s not worth the discount to defer payments on Rooms To Go if you care about your Credit Score! Listen to Dave Ramsey and buy the furniture when you can afford to pay cash!
Good News! Depending on which account you are making a payment on, you may be able to pay a minor amount (like $50) and get them to update the Bureau instantly! Call us, and we’ll let you know which credit card accounts have this capability built into their system!! We also have access to programs that allows us to approve loans for folks who have credit scores between 580 and 619, so don’t let a few bad items on your credit report stop you from looking for a new home in North Carolina!
Don’t be fooled by those who don’t have many clients, are not working full time in the business, and just plain don’t know… Steve Thorne at Mortgage Loan Officer in Cary 919 649 5058 if you want to buy a house and need more information!
I try and answer all questions :)