I love it when I take a continuing education course and learn lots to bring back to readers of the Shakadoo sites! Today I took a class on helping working- or low-income buyers find financing. There were some great ideas tossed around, but what I found most interesting is that in this new lending world, seems are not the way they used to be.
Here are some ways to improve your credit score – with some *asterisks* explaining what has changed.
1) Pay down your credit card balances. Of course these regular payments will show that you pay in a timely, responsible way.
2) Always pay your bills on time. What I said up there! When you pay responsibly, a lender will feel more inclined to give you a large amount of money because it increases their chance of getting it paid back!
3) Leave all accounts open. You read that right and it’s the FIRST big change of this brave new loan world. When you pay off the account, leave it open. A commenter on another site said that leaving it open improves your net to debt ratio, “If you have a lot, and you want to close a couple, then ok, but leave the accounts open that you have had the longest.”
4) Try to have available credit lines increase. Number TWO big change. Previously having available credit lines meant that you had more potential debt available to you. Why? An established history of good credit goes a long way.
5) Take no action on charged off accounts. If someone you owe a debt to finally writes off (or charges off) your account as “noncollectable” do not take any further action. You’ve already gotten one black eye from it, so just let it season. By continuing to make payments, your credit score will be constantly pinged – a negative affect on you.
6) And finally, opt out of pre-screened credit offers! When someone generously sends you a junk note in the mail that says you’ve been pre-approved for a credit card, they already checked your credit to see if you were qualified. PING! Opt out by going here.
Hoping this will help you get positioned to either buy a house or refinance!
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