Posts Tagged ‘fix my credit’

5 Important Factors that Decide Your Credit Score

credit report sign

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage.

The following factors affect your score:

1. Your payment history.

Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.

If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history.

In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have.

New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use.

Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

If you feel you need some help with your credit score or would like to fix your credit report, it is best to consult with a specialist.  Find out your options before it’s too late.

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Second Credit Checks for Home Buyers: Effective Today (June 1, 2010)

credit report clipboard

Starting June 1, Fannie Mae has a new rule going into effect which requires the lender to check for additional lines of credit, such as a new credit card or a car lease, that a borrower may have obtained that have not been reflected on the credit report over the course of the loan process. With stricter regulations mandating a further credit probe before borrowers close their mortgage, real estate experts are advising prospective home shoppers to keep their financial situation static until the deal is finalized.

In light of the new regulation, we talked to a pool of mortgage brokers, who shared tips on dodging mortgage closing debacles and streamlining the process.

Tip No. 1: Get the house before the car

Across the board, mortgage brokers say that opening new lines of credit is the easiest thing to trigger the lender’s attention, especially with the news of Fannie Mae’s mandate. For example, this means opening up a store card at Lowe’s to get a head start on buying some new appliances or paint or leasing a car to have something shiny to park in your new garage.

New credit obligations, such as as credit cards, increases a borrower’s debt-to-income ratio (the amount of debt including mortgages, car loans, student loans, credit cards versus overall income). Fannie Mae sets the maximum for the debt-to-income threshold at 45 percent of a borrower’s gross monthly income. Breaking this cap –even after pre-approval–would result in a defunct loan.

Tip No. 2: Don’t switch professions (or tax brackets)

Brokers say its not earth-shattering to change jobs in the same field, especially if you are making more money at the new place of employment, but it’s complicated when a professional is moving job classifications, for instance, from employed to self-employed, or from a salaried-position to a commission job. “Moving from an employee to a contract basis is a dagger,” says Stern, as two years of federal tax returns need to be included with a loan application. “[In this case], it could take three years to get approved for a mortgage.”

As another precaution given the nation’s high unemployment rate, Stewart says it’s becoming routine for lenders to get a verbal confirmation of a borrower’s employment status on the day of the closing.

Tip No. 3: Try not to move around big sums of money — even deposits

One broker says keeping your financial situation unchanged is not only refraining from withdrawing large sums of money, but also avoiding making big deposits of money in any of your bank accounts from pre-approval to day of closing. To qualify for a mortgage, one of the requirements is proof of all assets, including checking, savings, stocks or bonds, and if this is checked at any future point, the borrower may need to provide records of the fund’s origins.

“That’s what tight lending is these days — providing documentation,” says Jay Sondhi, a mortgage consultant in San Francisco. “What they are concerned about is that a large deposit may be borrowed money.”

Though more money in your bank account is not going to sabotage your qualifications for a loan, complying with documentation requirements and time delays may make a closing a mortgage a bigger hassle.

Tip No. 4: Monitor the balance of your credit cards

Though the credit score formula is deemed an enigma by many, the balance that’s riding on your credit cards plays
a big part in determining your credit score
. Higher scores result in borrowers being able to secure better interest rates.

With tight lending policies and stricter, more spelled-out regulations in the post-boom era, getting a mortgage has become increasingly confusing for the consumer. But keeping your finances transparent and steady will help simplify the process.

Source: Megan Mollman (AOL Real Estate)

Need to fix your Credit Score? More information here…

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Credit Repair- Your Rights as a Consumer


RIGHT 1: The right to view your credit report.

This portion of the law requires that the credit reporting agencies supply you with a full report on your credit transactions at any time you request one. There is no charge for the first credit report you request annually. For every subsequent credit report you request, the credit reporting agencies are allowed to charge a reasonable fee. However, if you have recently been rejected for credit you are entitled to a free credit report even if you have already requested one that year.

RIGHT 2: The right to know who has inquired about your credit.

The law allows you to know every bank, credit card company, employer, etc. who has requested a copy of your credit report. This even includes all the times the credit reporting agency has pulled your file.

RIGHT 3: The right to request verification of information you believe is incorrect.

This allows you to have a negative entry checked. This guarantees that every time you tell a credit reporting agency that an item is incorrect, they will investigate the item. Without this portion of the law, the credit bureaus would be able to refuse to investigate your disputes.

RIGHT 4: The right to insert missing data into your credit file.

Often you will have credit granted to you that never makes its way into your credit report. This portion of the law allows you to report all this good credit information to the credit reporting agencies and have it entered into your credit report.

RIGHT 5: The right to automatically remove information from your credit report that is over seven years old (10 for bankruptcy).

This guarantees that past financial indiscretions do not follow you for the rest of your life.

RIGHT 6: The right to place your personal statement in your credit report.

Some people have negative credit due to extraordinary events such as loss of a job, sickness, divorce, etc. This law allows you to have a written statement of 100 words or fewer placed in your credit report. This can be used to explain to future creditors what caused the bad credit and why it was a one-time occurrence.

RIGHT 7: The right to privacy of the information in your credit report from anyone other than legitimate members of credit reporting agency.

This states that no one can look at your credit report without your permission. That is why creditors have you sign a form allowing them to examine your credit report. The only exception to this right is the credit reporting agencies. They are allowed to look at your credit report without your permission as long as it is for legitimate business purposes.

RIGHT 8: The right to have your credit report transferred from one area to another any time you have a relocation.

This provision of the law guarantees that your credit history follows you wherever you go. This allows your hard-earned good credit to follow you all over the United States. Unfortunately, it also means that any bad credit you have also follows you across the country.

RIGHT 9: The right to use the small claims court system to resolve any disputes with the credit bureaus about incorrect or inaccurate information in your credit report.

This gives you the right to your day in court. If something on your credit report is inaccurate and you can’t get it repaired through the credit repair process, you have the right to present your evidence in a court of law to resolve the dispute.

RIGHT 10: The right to know exactly why you were refused credit.

This means the creditor who refused you credit must inform you exactly why you were turned down. This request must be made by you to the creditor within 10 days of your being turned down.

For Consumer Debt and Credit Repair Laws visit us at


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