Knowing your credit score is important. But with the sheer number of different credit score systems out there, are any of them really doing you any good, or are they just a big hindrance?
Your credit score operates on the assumption that the near future will look a lot like the recent past, and that going forward, people can be expected to behave pretty much as they always have.
Since most people will exhibit the same basic behaviors for years at a time, be they good or bad, it's not hard for the people who build credit scores to analyze you and your expected patterns of future behavior. If you have bad credit today, it only stands to reason that you'll have bad credit tomorrow.
So just how important is your credit score? Janet Bodnar of Kiplinger's Personal Finance magazine explains…
This is especially true if you plan to borrow money to buy a home. Here are three more tips on improving your credit score fast from Stacy Johnson of Money Talks News…
Here is that website Stacy mentioned where you can get a free copy of your credit report to see what your history says about you. Go to https://www.AnnualCreditReport.com
You can get a copy of your credit report free from each of the three major credit reporting agencies each year. So get one now, then get another 4 months from now, and the third four months after that. This way, you can be checking on your credit report every four months for free, and not wait a whole year to see what's going on. For the most part, with a few minor exceptions, all three credit reports will have basically the same things listed about your credit history.
If you're like many people these days, either thinking of buying Metro Atlanta real estate, or refinancing your current mortgage, there's a lot you have to consider before doing either one. But before you get too busy thinking about how you'll spend the money you'll save by refinancing, or what your dream home might look like, stop for a minute and make sure you'll actually qualify for a mortgage by not making these credit score mistakes.
There are dozens of factors that, well, factor into qualifying for a mortgage such as setting your limit, your rate, etc. One of the big indicators of what you'll qualify for is your credit score. This is one of the initial pieces of information a lender will use to determine if they can help you.
Your credit score is a good indicator of what kind of financing you'll be able to get. One way to start off on the wrong foot is to apply for a mortgage without having an idea of where your credit score is on the scoring scale.
Contrary to popular opinion, a soft credit pull – the kind you'd be doing if you were just checking up on your credit yourself – won't negatively impact your credit score.
It's a good rule of thumb to check your credit score on your own about once a year, but you'll want to check it a few months before you apply for a mortgage so you'll have time to build it up or make repairs if it's too low.
There are a lot of different companies that will generate a credit score for you. Quizzle.com is one very reliable website for checking your credit. It offers free credit reports and scores, helps you to understand what everything means and helps you build your credit.
Once you get your credit score, it's important to understand what that number means for you, and, if it's low, how to boost it. Generally speaking, 580 is the absolute lowest score you can have and still qualify for a mortgage – an FHA mortgage, specifically. Usually, you need at least a 620 to qualify. If you're at 720 or higher, you'll be in a lower mortgage rate bracket because you're thought of as a pretty worth-while risk for the lender. 780 is a great credit score and 850 is about as good as it gets.
If your credit is not so hot, there are a bunch of things you can do to get it up like pay off outstanding debts, make sure to pay all of your bills on time and consolidate debt so it's easier to pay off. Keep in mind, though, that just getting rid of credits cards won't necessarily boost your credit and could actually hurt it.
Closing a card doesn't automatically mean your credit score will go down. If you're thinking about shutting down an account, take a good hard look at your credit utilization first. Carefully evaluating your situation and knowing the numbers is the best way to get rid of unwanted credit cards without having your credit score take a plunge.
We have more mortgage tips and credit score information at our website. Just click the Atlanta Mortgage Info link to your right under the Atlanta Real Estate Categories.
There are businesses out there that promise to improve your credit score for a price. But are they doing anything for you that you can’t do yourself?
We have other related stories on our site, just click the “Economy” link under Categories to your right.
Even if you’re not thinking about applying for a loan or credit card in the near future, it’s always a good idea to look at your credit report and scores. You should check your personal credit report and score at least twice a year to make sure that all of your personal information is accurate.
Why It’s Important:
Identity theft is a problem that is not going away any time soon. An identity thief can steal your identity and do serious damage to your credit in less time than it takes to boil water. Checking your credit report and scores regularly ensures you notice any suspicious activity right away.
How To Do It:
The Federal Trade Commission allows consumers to obtain one free credit report annually via AnnualCreditReport.com.
Under federal law, you’re entitled to an additional free credit report if you are denied credit, insurance or employment and ask for your report within 60 days of receiving notice of your denial. The written notice you should receive should also list the name, address and phone number of the company to contact to obtain your report.
If you want to keep extra close tabs on your credit report and scores, a site you might want to consider is Quizzle. Quizzle has been mentioned in the Wall Street Journal, USA Today and CNN for being one of the best places to get a complete understanding of your credit. They offer a free Experian credit report, credit score and more.
How They Work:
While your credit report and scores never really “expire,” your credit profile could change based on the financial decisions you make on a daily basis. One late payment or new credit account could make your credit report and scores go up or down, which is why most lenders request to pull your credit when you’re applying for a loan. Your credit score has a direct impact on your ability to be approved for a loan, and each lender has its own cutoff points and underwriting guidelines.
Keeping up on your credit report and scores is more important than ever. If you want any kind of loan or if you’re thinking about taking advantage of the record low mortgage rates we’ve been enjoying over the past year, make sure you’re watching your credit closely. You’ll be taking the proper measures to protect yourself from identity theft, and you’ll be preparing yourself for any loans you may want to take out in the future.
We specialize in Metro Atlanta real estate for sale. Brant Meadows has been helping families buy homes for more than 16 years. Home Hunters Realty of Atlanta, Georgia, is an exclusive buyer's agency serving home buyers only.
