Part II — Credit: Your Most Important Asset

By Jacquelyn Brinker, Branch Manager, Union National Mortgage Company

Improving your credit score might not be as difficult as you might think! There are several steps you can take to increase your score. Here are some tips:

Pay everything on time – This is the single most important item that keeps your credit score healthy. Even one late payment can dramatically decrease your credit score. This is the “cardinal rule” of maintaining a good credit score.

Evenly distribute your credit card debt – Lower the ratio of debt to available credit. Let’s say you have a credit score of 665. If you have a high balance on one card, and four additional credit cards with zero balances, evenly distributing the debt from the first card could move you close to, and possibly into a higher credit bracket. Be careful, however, to watch the interest rate and/or finance charges on the credit card accounts.

Keep existing accounts open and active – The average consumer is usually anxious to close credit card accounts that have a zero balance, but doing this can cause them to lose the benefits of a long-term credit history and increase their ratio of debt to available credit. Bottom line - don’t close all those old accounts! Dust off the old cards not and them to keep them active.

Keep credit inquiries to a minimum - Each inquiry into your credit history can impact your score anywhere from two to fifty points. When it comes to mortgage and auto loans, even though you are only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any fourteen day period as just one inquiry, so try to stay within that timeframe.

Remember, credit scores don’t change overnight. Improving them requires time and diligent effort on your part, so it is a great idea to get the ball rolling at least three to six months prior to submitting your application for home financing. Addressing credit issues can be uncomfortable to say the least. By taking steps now, you’ll be closer to obtaining the home of your dreams.

If true credit repair is needed, you can begin the process in several different ways, so phone our office for guidance on contacting reputable, professional credit repair counselors. We are always happy to provide guidance because “Your Home Loan Matters!”

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