Improve Your Credit Score

Here are a few tips to help improve your credit score. Remember, interest rates are based upon your credit score, so the higher your score, the lower your rate, usually:

1. Review your report for accuracy - you should look at it at least once a year - each of the three credit bureaus will send you one report per year FREE. Make sure the information is about you and only you - if you have a common name, your records could be mixed up with someone with the same or a similar name.

2. Repair any credit report mistakes - if you find something that is incorrect or missing from your report, dispute the information with the credit bureau directly. They are required to investigate any disputes, generally within 30 days of the request.

3. Don't cancel old cards or get a lot of new ones in a short time span, it will hurt your score - the length of your credit history accounts for 15% of your total score.

4. PAY YOUR BILLS ON TIME - this is probably one of the most important things that you can do and accounts for 35% of your total score. If you are having trouble paying on time, call the creditors and work out a payment schedule with them - VERY IMPORTANT!

5. Keep your credit balances below 25% of the available credit total. High average balances impact your score. This can account for as much as 30% of your total score.

6. The fewer credit requests, the better. Too many and you will get dinged for too many inquiries. This accounts for 10% of your score. If you are trying to get a new home loan, don't apply for any other credit such as a car loan, credit cards or other.

7. If you have an account in collections and pay it off, it will not be removed from your credit report - it will stay on there for 7 years. However, once you have passed the 7 year mark, be sure to contact the credit bureaus to get the item removed.

8. Rather than moving credit card debt from one card to another, pay it off. It may be actually hurt your score to owe the same amount and change to fewer open accounts.

9. Be careful with credit repair agencies - You don't have to pay anyone to repair negative items on your creidt file - you can do this yourself for FREE.

For more information about your situation, talk to your mortgage lender to find out how your credit score can be improved.

Call or email us if you are thinking of buying a home in Texas, our preferred lenders will be happy to pre-qualify you and help you make some decisions on what you need to do to improve your score if you need to increase your score to qualify.

Sue Ellett, Broker-Associate Coldwell Banker United Realtors
512-422-7182