Link to this page Print RSS  

Top 5 Ways To Improve Your Credit Score

Waiting for the perfect time to take advantage of low refinancing rates? These days, timing isn't your only consideration. Equally important is your credit score. Like it or not, a score that got mortgage brokers' attention when you first purchased your home might not be good enough today.

What separates a good credit score from a great one? Not long ago, scores in the low 600s could reap a lot of financial benefits. But now, getting the best rates requires a credit score in the mid 700s. Even a credit score of 740 is subject to a rate adjustment. What's worse, each 20-point drop after that means another rate adjustment.

Sadly, the good old days are over. If you want today's best refinancing rates, you must make sure your credit score is the best that it can be.
Surprisingly, most aren't. But if you know what to look for, you might be able to bump your score 10 points, 20 points, and maybe even more. Better yet, you could pull this off within a month.

Here are 5 steps to help you do just that.

1. Know and analyze your score.

It's your score and you should know it. So find out, and understand how your credit score affects the loan rates you're offered. Loan officers usually have tools that can analyze credit scores. These tools work by examining the information reported on each of your three credit reports. They look for things that may influence on your score including errors, omissions, inaccuracies, and inconsistencies. These can all pull your credit score down unnecessarily so ask your loan officer whether these tools are available to you.

2. Clear up discrepancies.

You can do this yourself by contacting the credit agency's dispute resolution department and following the steps you're given. A faster way is to let your broker handle this process. With proof of a reported discrepancy, brokers can work with more efficiently with credit agencies to clear up any issues and possibly improve your score.

3. Decrease balances or increase credit limits.

The goal here is to use as little of your available credit as possible. The less credit you have available, the more your credit score is penalized. Ideally none of your balances should exceed 30% of their corresponding available credit amount. Remember, the lower each balance the better, with a zero balance being the best. This is a great way to see a noticeable improvement in your credit score.

4. Determine if a single income is enough to qualify.

If so, put the loan in that individual's name only and transfer whatever account balances you can to the other party.

5. Take advantage of rapid rescoring.

You'll pay a couple hundred dollars for this service but it might be worth the cost, especially if your loan process needs to resume momentum. In about a week you'll know whether the changes you've made have had a positive impact on your credit score it. Your lender together with a company that specializes in credit rescoring can take care of this for you.

If refinancing is in your future, don't delay. Use these tips to start improving your credit score today.

Link to this page Print RSS