Mike Miles at Fountain Mortgage will guide you through the mortgage process.
Your credit score is important. Agree or disagree, but your creditworthiness determines a lot of what happens (or doesn’t happen) to you in relation to finance. The better the score, the better credit terms you will get.
If your score isn’t where you want it, here are ways to increase it:
Clean up your credit report – look for accounts showing late payments or unpaid bills. If any of this information seems incorrect, you can dispute the inaccuracies.
Withdraw Your Funds – Much of your creditworthiness (30 percent) is based on how much you owe as loan use. This means a ratio of the balances owed to the permitted upper limits. So if you have a $ 10,000 credit card limit and you owe $ 5,000, you have 50 percent utilization. The lower the level of utilization, the better.
Pay twice a month – this will help maximize your credit utilization and prevent smaller credit limit accounts from being overused.
Increase Your Credit Limit – Regardless of whether you are able to repay your balance (to improve your credit use), increasing your credit limit will help. It widens the gap between what you owe and what your limit is.
Open a new account – this may sound strange, but if you get it right (and without abusing the idea) it will help your score. A new account gives you available credit as long as you don’t transfer a large amount. Avoid department store cards for this.
Negotiate outstanding balances – If you have invoices that are in collections or profit and loss status, you can call the creditor and try to negotiate the balance for easy settlement.
Become an Authorized User – this is only recommended for those accounts held by someone you know and trust (spouse or parent as a suggestion). If the actual account owner has good credit account length and utilization, adding it as an authorized user will increase your score.
You are entitled to a free credit report directly from the three offices (Equifax, Trans Union and Experian) each year. I recommend getting a copy every year. If your score is below 720, work on improving it. While only about 40 percent of people have a score above 720, there are many more who could practice some of the things listed above but are not yet practicing.
This weekly sponsored column is written by the staff of Fountain Mortgage. Located in Prairie Village, Fountain Mortgage is dedicated to educating and empowering clients to make the best financial decision possible for their situation. Contact Fountain today.
Mike Miles NMLS ID: 265927; Well Mortgage NMLS: 1138268