My Credit is a Little Rough. What Should I Do? 

Tips for Raising Your Credit Score

good credit scores just ahead

Welcome back to my blog everyone! The topic I want to dig into this week is credit. Why do you need it? Why is it important? Does it really have an impact on getting approved for a loan or not? Want to see what your credit is currently at for that new home loan? Click here!  I did something a little different with this blog post. I co-wrote this blog with my guy Sam Parker. Let me give you a little insight about my boy Sam. He is the Founder and CEO of MyCreditGuy.com and this guy knows the “ins and outs” of credit. He is my go to guy for a reason and the bottom line is that I only work with the best, and I assure you that is what Sam is. Now, let’s dig into this blog!

b24b8f258b7a59e85250f426c6ab5489a72cdc6d4f77abb05d4101ed65cfd2ec Just like anything in life, if you want to get better at it, you have to practice. If you want that promotion at work, then you have to put in the time and effort. If you want to become a better writer, then you have to practice writing. Same goes with your credit score. If you want to have a credit score that is out of this world good, then you have to put in effort to build and maintain it. Improving your credit score can save you hundreds or thousands of dollars on big purchases throughout your life. The best part about it is that it really isn’t that hard to accomplish. You just have to make sure that you are willing to put in the effort. A word to the wise, get to know the credit scoring model. Each person’s credit profile might be a little different, but there are five basic things that you can do for a little “Spring Cleaning” of your credit report.
Be responsible — Pay all your bills on-time each month. Late pays, collections and bankruptcies all have negative effects on your credit. Be smart, be responsible and make sure all your debts are paid on-time.

Check your credit regularly and monitor it for inaccuracies — Don’t let your credit suffer because of inaccurate information. If there is information on the report that is wrong, contact the creditor or original creditor and have them fix it. If you have a hard time with that, get the credit bureaus involved. Use a monitoring service, such as Credit Karma. Is it the most accurate? No, but it gives you some insight on your credit report without having a negative impact on your score.

ct-credit-scores-0602-biz-20150601Don’t over extend yourself — Just because Capital One gave you a $1,000 credit limit doesn’t mean you should go rack that thing up. Keep your credit card balances below 30% of the limit. For example: $1,000 credit limit = Don’t use more than $300

Time is valuable — The length of time that you have credit impacts your scores. So the longer you have a positive reporting account, with no late payments and a responsible balance, the better your score will be.

Stop having everyone and their mother check your credit — Talk about a red flag. Applying for numerous things in a short period of time can be disastrous for your credit. This is a sign to the credit reporting agencies that you may be experiencing financial difficulties. Too many hard inquiries = knockout punch to your credit scores.

Now, I want to let Sam takeover and blow your mind with these credit tips. Here is a video with some tips on what NOT to do when trying to build or maintain a great credit score.

Sam Parker here, great information Ed. It’s tough to beat the tips you’ve already given but I have just a few more and I’ll expand on a few that you’ve already made!

Don’t Pay Off Collections or Other Negative Item – I know, that just doesn’t make sense. However, the credit scoring algorithm is a bit flawed. See, when you pay off an older negative item it will update that account and bring the activity date current. When that happens, the credit scoring algorithm views this collection as new/current because of the date. In turn your scores will drop BECAUSE you paid your bill. So unless either Ed, one of his staff, or one of our staff instruct you to pay a collection, just hang onto your money for now.

No New Purchases – It’s so tempting to start buying the new furniture and electronics that will make your new home complete. However, too many times people will either use their credit cards to make these purchases OR open a new, in-store, credit card. When you use a credit card it impacts your balance to limit ratios which are a huge factor in your credit scores, you don’t want to use credit cards at all during the home loan process and if anything, get them paid down as much as possible. Also, when you open a new account the credit scoring algorithm sees it as a risk. You will most certainly see a drop in your credit scores not only because of the new debt load but because you just introduced a new account to the mix. This should go without saying but do not buy a new vehicle during the mortgage process either.

Don’t Close Accounts – As many people are getting their financial house in order they think it’s time to pay off and close out as many accounts as possible. While we advocate paying accounts down, closing them will be eliminate ALL of the pay history that you’ve accumulated and you’ll definitely see a drop in credit scores.

 

I appreciate everyone checking out the new blog, and Sam I appreciate you taking the time to co-write this with me. As always if you have any questions feel free to reach out to me. I am also including Sam’s contact information below. If you have any credit questions, he is the guy to contact. Thanks again and don’t forget to SHARE this with your friends and family, give us some FACEBOOK love!!!

Hustle. Succeed. Repeat.

-Ed Stojancevich

screen-shot-2016-10-06-at-5-46-03-pm  Download Ed’s Mortgage App, Click Here!

-Sam Parker

MyCreditGuy  Download Sam’s FREE Credit App, Click Here

This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making any legal or financial decisions.

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