How to Avoid Critical Credit Repair Mistakes


If you are looking for homes for sale you are bound to notice that even small movements in your credit score can translate into substantial saving in your monthly mortgage payment. While I always recommend the professional advise of mortgage lender, here are some tips to get you started in he process:


Out of date or inaccurate information

This is one of the easiest and least expensive ways to boost your score. The process is as simple as informing each of the credit agencies that have the inaccurate or outdated information being reported. Of course it will need to be writing and may take a billing cycle or two to be removed if it’s found to be incorrect. For the cost of a stamp or two it’s a great return on your investment.


Assuming CC Balances don't matter if current on payments

Paying your bills on time for lenders is one of the factors considered when deciding your creditworthiness and ultimately your interest rate. Beyond that, there is what is known as credit utilization. In essence it’s how much of your available credit you are using. The FICO score’s exact mathematics is highly guarded but most financial experts agree that this utilization ratio is factored into the score itself. Therefore, having this low should have a positive effect on your score.


Closing Unneeded Credit Card Accounts

Credit in its self is not a bad thing. Credit is a tool and when used correctly it open possibilities not normally available like paying cash for a $1,000,000 home. The credit score is also made up of how long some accounts have been opened or “seasoned”. One myth is that closing those unused cards will increase your credit score. Experts have a different interpretation. They suggest that it not only lowers your credit utilization as a whole but also shows a lender you have control and will be less of a risk of not getting over extended. Lenders like stable buyers.


Credit repair and even credit building can be a tough and sometimes confusing uphill battle. This is where a local knowledge lender who has the right tools to navigate the process is advantageous. If buying a home in Lake of the Woods, Locust Grove, or the surrounding area is on your “to do list” this year and need more information about how to get your credit ready, please give me a call. I’d love to connect you with a lender who can answer your questions and design a plan to get you keys to your new home!

Sean Jones REALTOR

540-360-5166 anytime