Credit Score Tips

Quick Tips: Boost Your Credit Score For Better Mortgage Rates

February 9, 2012 by · Leave a Comment 

Credit scores play a huge role in today’s mortgage market — larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.

Mortgage rates are at an all-time low in Northwest Indiana. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting “the best rates” from your lender, and getting something worse.

The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics :

  • Why you shouldn’t close a credit card after you pay off a large debt
  • What is the maximize balance to leave on your credit cards, relative to your credit limit
  • What types of credit checks harm your credit scores, and which ones don’t

You’ll also learn several proven methods to raise your credit score quickly.

In the end, good credit scores are the result of paying bills on time and staying within your means. Those with the best credit FICO scores, get the best interest rates.

James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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Credit Score Tips

Borrowers Beware Don’t Be Exploited by the Credit Bureaus

March 22, 2011 by · 2 Comments 

Young Woman Shocked by Her Web Browser by Ryan LaneWhile it’s an illegal breach of privacy for real estate agents or mortgage originators to sell your credit information, it is perfectly legal for credit companies to do so.

For a price ranging anywhere from $25 to $100, your name and certain specifics about your credit report – including your address, phone number, mortgage history, and even your FICO score range – are sold by the credit bureaus to mortgage companies. The result is an onslaught of unsolicited phone calls and junk mail as soon as you apply for a home loan.

Unfortunately, no legislation exists to prevent credit bureaus from profiting at your expense. As a “trigger lead”, you are simply at the mercy of any number of marketing campaigns designed specifically to discredit the mortgage professional you’ve come to know and trust.

That’s why, prior to applying for any loan program, I suggest that you visit www.optoutprescreen.com to opt-out of future credit bureau solicitations and avoid this problem altogether. Not only will you avoid the hassle of telemarketers, but by opting out you could potentially add 10 to 15 points to your credit score!

In addition, if you do happen to receive phone calls from solicitors, ask them to place your name and number on their Do Not Call list. All telemarketing companies have their own internal Do Not Call list that they must abide by. Be sure to take down the name of both the company and the individual who made the call, and to let the solicitor know that you’re doing so. This way, you will have grounds to seek action against them, should they call again.

As you embark on what is likely the largest financial transaction of your life, you should place yourself in the hands of a professional – not some transactional loan officer who purchased your information from the credit bureaus. Remember, only a limited number of sources exist for lenders to obtain mortgage money, so it’s extremely unlikely that a borrower will find an unbelievably low rate without an unbelievably high cost.

If, however, you are curious about the programs these mortgage companies have to offer, then listen to what they have to say. Once they’ve offered you a rate that seems too good to be true, ask them a question or two from the following list.

  1. Where did you get my information? Who gave you permission to call me, and how much did you pay for my information?
  2. Why should I willing to speak with you when you weren’t referred to me by someone I trust?
  3. How are mortgage interest rates determined, and what impacts the rates that you are offering me today?
  4. What impact does the Federal Reserve have on the rate I will be paying for my first mortgage with you?
  5. What ar the specific closing costs associated with the rate and program you’re offering me today?

If you have any questions about your credit and trigger leads, or any other part of the home loan process, please call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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Credit Score Tips

Credit Repair Software is Best Solution to Fix Your Credit

October 17, 2010 by · Leave a Comment 

Voted Best Credit Repair SystemOver the past several years, the impact of your personal credit score has become more significant in every aspect your life. Even if you choose to pay all cash your lack of credit could still affect your ability to get a loan, insurance coverage, employment and/or medical treatment.

Having the best possible credit score can be difficult especially during tough economic and financial times. No matter the reason for why your credit score is not the best it could be, fixing your credit is extremely critical.

Here are five ways to fix your credit from worst to best:

Worst: Waiting It Out  Here is an old stand by that many will for whatever reason pursue. Sitting by the sidelines and just allowing time to cure the negative items in your credit report. Unless you do not need a good credit score anytime in the forseeable future, this could take you 7 – 10 years to fix your credit report.

Bad: Credit Repair Services  It’s tempting to simply pay a company to “do the work for you,” but all credit repair services (that includes law firms) have two dirty little secrets they don’t want you to know.

First, because they charge monthly for their service, they make more money –up to $2,000– if they deliberately drag out the process, which is why they often take two or three years.

Second, you actually wind up doing MORE work than if you did it yourself. In addition to dozens of forms, the credit repair service requires YOU to personally choose which items to dispute, how to dispute them, and you have to constantly send them information that the credit bureaus send you.

Good: Follow Instructions From The Credit Bureaus  This is like the wolf instructing the sheep. The credit bureaus are NOT your friends. This approach costs nothing, but you get what you pay for. Don’t do it.

Better: Do-It-Yourself Programs (Typically A Printed Book, An E-Book, Or An Audio Program)  There are hundreds of these programs available, but they’re out of date. If you are very organized and have lots of free time available, the process these books describe will work fairly well. . .eventually.

Best: Credit Repair Software  There are several companies that offer credit repair software (not just an e-book). Although some are rip-offs (clue: unprofessional-looking websites), many credit repair software products combine the best of all worlds: simplicity, low price, and fast results. Better quality credit software ranges from $97 to $1,000 or more, but there’s no reason to spend the higher amounts. Look for satisfaction guarantees and a professional-looking website.

The best credit repair solution for the money is a downloadable software program called Credit Repair Magic. At only $97, it’s the fastest and most cost-effective credit repair solution we’ve ever found. Don’t waste your time with useless e-books or ridiculously overpriced monthly services. It’s fast. It’s easy. Aren’t you worth it?

WelcomeHomeNWI

WelcomeHomeNWI.com was created to demystify the national real estate headlines and to provide unbiased real estate trends and statistics relevant to Northwest Indiana. Our mission is facilitated through a collaboration of professionals who are dedicated to the Northwest Indiana real estate industry. Welcome Home NW Indiana! Welcome Home! WelcomeHomeNWI.com is Your Home for Real Estate and Mortgage News for the Best Communities in Northwest Indiana.

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Credit Score Tips

My Credit Score Just Dropped, What Happened?

October 4, 2010 by · 2 Comments 

My Credit Score Just Dropped, What Happened by jkbarath | Flickr.comYou’ve been working really hard to increase your credit score. You’ve done everything you thought you were supposed to do to present yourself as a creditworthy individual. So, why did your credit  score suddenly drop? What happened?

Unfortunately, this is a common occurrence with many consumers today, a situation that likely could’ve been avoided if you had only been working with a qualified credit improvement specialist from the beginning. Remember, there’s no shame in seeking help with your credit. Credit scoring models are based on a number of factors that, when combined, add up to a formula that might not seem logical to those who don’t deal with these kinds of issues on a daily basis.

The following are just a few examples of seemingly innocent actions that could cause your credit score to suddenly and dramatically drop.

“I paid off my biggest credit card debt and closed the account, but my score dropped anyway.”  This is one of the most frustrating situations for many borrowers. You would think that paying off your biggest debt and closing your account would be a good thing – and it is. But, because of the five factors of credit we discussed in a previous article, this action could reflect poorly on your credit score because you chose to close the account. Depending on your situation, the account you closed could’ve been your oldest credit account with the highest credit limit, two major factors in calculating your score.

“I maxed out my card and although I paid it off completely when I got my statement, my score still dropped.”  By maxing out your card, your overall credit ratios were adjusted. And even though you paid it off, your statement reflects your current status. In other words, your credit report shows that your account is maxed out, even if you pay it off the next day. The best thing you could’ve done here was to pay your bill before your statement arrived.

“I was only one day late on my payment but I still received a 30-day late on my credit report.”  Unfortunately, your creditors do not distinguish the difference between one day and 30 days late. You must pay your monthly bills on time every time to avoid this penalty. Depending on which credit cards you have, you could suffer an additional penalty for being late on your credit card payments, even just one time. It’s called the universal default clause, which could increase your interest rates on all your credit cards up to 28-30%, even if you’re in good standing with your other accounts!

“I paid off an old collection and my score dropped significantly.”  While it might seem illogical or even unfair, sometimes paying off a collection account can actually cause more harm than good. Remember, credit scoring models typically lend more weight to your recent activity than to the mistakes you might’ve made in the past. By paying off this old account, you may have inadvertently added more weight to this mistake by making this item current.

Don’t be shy about asking for help when it comes to your credit score. Remember, your credit is the most valuable financial tool you have at your disposal, and having an expert on your side is always smarter than learning the hard way on your own.

If you or anyone you know have questions about credit, contact us today. We’ll be glad to review your credit and see what, if anything needs to be done to help you meet your financial goals and homeownership needs.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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