Everyone knows how important your credit score is. It not only affects whether or not you’ll be approved for credit such as an auto or a home loan, but also affects the interest rate you’ll receive on these loans.
Therefore, you should improve your credit score not only because the commercials and billboards tell you to; it can actually save you money. Since I’m all about saving money, I’ve put together these 3 quick ways that can help you raise this score by the next time your score is calculated (usually every 30 days).
#1: Pay your Credit Cards Down Below 20%
Many people use their credit card on a monthly basis. They buy groceries on it, put gas on it, and then pay it off every month. The trouble with this is that if your credit card balance is above 16% of your total limit, this can lower your score. It doesn’t matter if you pay it off every month or not. It’s a simple calculation of current balance divided by limit.
#2: Ask for a Credit Limit Increase
Having higher credit limits, even if you don’t intend on using them, shows you’re more financially healthy. Raising your combined credit limits from less than $2,000 to over $10,000 can have a quick effect on your score, upwards of 15 points.
#3: Check and Remove any Credit Discrepancies
Did you know that 75% of Americans have at least one discrepancy on their credit report. With the prevalance of common names and human data-entry error, it’s easy and probable that you’ve got negative information reporting on your credit report that’s not even yours. This can be easily fixed by writing a letter to the credit bureaus and disputing the discrepancy.
Nice newsletter. Good article. Good information. Thank you. Carol
For conventional financing, borrowers with scores at 740 or anywhere above generally receive the same loan pricing (rate and cost). That being said, the better your credit the higher your chances of receiving loan approval with high debt to income (up to 50%) or high loan to value (up to 95%) which can be a major benefit when applying for a new loan. For Jumbo financing, borrowers with credit scores above 800 are generally rewarded with both better pricing and easier guidelines. There are no situations where better credit is a negative when obtaining new financing so we should all continue to strive to reach and then stay in the 800’s.
What are the advantages of a score over 800
Thank you Mike for this information. As a residential realtor the information that you provide is crucial to a successful transaction for my clients. You are indeed a pleasure to recommend to all of my clients. You are so professional, thorough, conscientious and pleasant to work with. !!
Hi Dane! Wanted to make sure I'm clear on this. Am I right in saying that on whichever remodel is done you still take a loss rather than an increase in value - the ROI will never exceed 100% of cost?