What Can Be Done To Improve My Score??

Potential Homebuyers ask us everyday, “How can I improve my credit score???” There’s not a simple answer, because every credit history (and score attached to that history) is like a snowflake.

There are some concepts that are important to understand about Credit Scores and improving that score.

• Late Payments Showing on Report: If your report shows one or two lates over a LONG period of time (probably more than 8 months ago).  Call the Customer Service Line and ask very nicely for it to be removed. If the Customer Service Rep does not have the authority to remove the items (which they normally do not), ask for a supervisor.  Be nice, beg, beg, and beg some more! It really is important to have any documentation available to show the company that it was a simple mistake (like put the wrong payment in the wrong envelope when paying bills one month – I’ve done that before but you need the evidence of the check returned and the letter from the other company).  This sounds a little crazy, but going head on really is the simplest way to get late payments off.  Sometimes it works! If you feel that the lates are in error you can begin the dispute process.
• High Balances On Credit Cards:  Look on your report for the balance between your Credit Limit and your Current Balance. If you have high balances on some cards but low ones on others, spread the balances around.  If you a shopping for a home – and need to elevate your scores – REMEMBER that most credit cards companies only report to the bureaus once per month.  This means that if you move balances around on the 15th of the month – it could take more than 45 days for the difference to reflect in your scores.
• Closing Credit Card Accounts: The “old wives tale” is that people should close old accounts, especially if you have a zero balance and no longer use the account.  If you are an Impulsive Shopper – I can see the reasoning in this train of thought.  However, you never want to lose years of a good payment history by closing a card you are no longer using.  “In fact, if you haven’t used them for a couple years, they may have gone “stale” in the scoring model.  I say charge a tank of gas and pay it off when the bill comes to re-age them into the most recent scoring models.”

Remember that Credit Reports are Unique, and they can not be changed in a matter of a couple of weeks. If you are considering a home purchase this year, speak to a mortgage professional NOW so that we can help you get your scores up!  IT WILL SAVE YOU TENS OF THOUSANDS OF DOLLARS!