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Credit Scores
April 29th, 2014 1:53 PM

With real estate prices on the rise, more buyers will be financing rather than paying cash to purchase a home in the near future.  Lenders have tightened up the credit criteria needed to qualify for a loan, so it is extremely important for buyers to know and understand what they can do to keep their scores high. 

Pay bills on time.  Late payments and collections can have a serious impact on a FICO score.

Do not apply for credit frequently.  Having a large number of inquiries shown on your credit report can lower the score.

Get increases in credit limits and reduce credit card balances.  This will make the ratios of debt to credit limit more attractive.  Persons who are "maxed out" will find their score declines.

Be certain to obtain enough credit to establish a credit history.  Insufficient credit can negatively impact the score. 

Credit scores are not only used for purposes of loan qualfication.  Insurance companies can evaluate risk based on insurance scores and some companies use credit scores in the hiring process.  Credit scoring uses statistical samples to predict a person's level of risk and  financial responsibility.  FICO has recently developed a new credit score program that lenders may use for those with a very limited credit history.  This program evaluates "nontraditional" data, such as how well consumers handled payday loans, retail payment plans and even an individual's checking account overdraft protection.  

A credit score is an extremely important factor that can directly affect the future of anyone.  It treats each person objectively because the same standards apply to everyone, regardless of demographic or cultural differences.   So, do everything possible to maintain a high credit score . . . . . .  your future depends on it.

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Posted by Barbara Doeringer on April 29th, 2014 1:53 PMPost a Comment

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