Buying a Home.. Tips for Good Credit Scores
Is it really some revolutionary idea that good credit helps us buy stuff? Of course not, but we need to understand the system to maximize our chances.
When getting a home mortgage you will be evaluated primarily by the Fair Isaac credit scoring system. This is a proprietary credit scoring system out of which comes scores associated with your history.
The reality is most people don't have the foggiest idea of the makings of their score. Most people think credit scoring is mainly about payment history.
Although a good on time history of payments is no doubt very important to a good credit score it is far from being the total picture. Other equally important factors play a role to complete the picture.
Since we started with payment history you should be aware that you're not late until thirty days post the due date. Keep that in mind when in a pinch. You pay all the way up til the end and still have a clean payment history.
When you have lots of available credit which is relatively unused it looks better on your scores. It basically means you have discipline and cushion to fall back on if in need.
You definitely don't want to be maxing your cards out. That is bad juju, even if you pay them on time.
Credit scoring likes some open credit. So, if you are credit averse and don't have hardly any trade lines open, go get two or three.
Be careful about being too aggressive getting cards. You don't want to all of the sudden get 20 of them. The system could perceive that as an attempt to run up credit.
Make very moderate purchases with your small number of cards and be sure to pay the entire balance off by the end of the month. In a year you won't believe your scores.
As far as credit bumps, bruises and scrapes, the more time they exist in your past the better your scores. If even considering looking for a home be extremely careful. Just one recent 30 day late can kill scores.
Most of credit scoring makes sense. Use logic when developing your credit picture and you'll be just fine.
When getting a home mortgage you will be evaluated primarily by the Fair Isaac credit scoring system. This is a proprietary credit scoring system out of which comes scores associated with your history.
The reality is most people don't have the foggiest idea of the makings of their score. Most people think credit scoring is mainly about payment history.
Although a good on time history of payments is no doubt very important to a good credit score it is far from being the total picture. Other equally important factors play a role to complete the picture.
Since we started with payment history you should be aware that you're not late until thirty days post the due date. Keep that in mind when in a pinch. You pay all the way up til the end and still have a clean payment history.
When you have lots of available credit which is relatively unused it looks better on your scores. It basically means you have discipline and cushion to fall back on if in need.
You definitely don't want to be maxing your cards out. That is bad juju, even if you pay them on time.
Credit scoring likes some open credit. So, if you are credit averse and don't have hardly any trade lines open, go get two or three.
Be careful about being too aggressive getting cards. You don't want to all of the sudden get 20 of them. The system could perceive that as an attempt to run up credit.
Make very moderate purchases with your small number of cards and be sure to pay the entire balance off by the end of the month. In a year you won't believe your scores.
As far as credit bumps, bruises and scrapes, the more time they exist in your past the better your scores. If even considering looking for a home be extremely careful. Just one recent 30 day late can kill scores.
Most of credit scoring makes sense. Use logic when developing your credit picture and you'll be just fine.
About the Author:
Near or far from Austin this is a great site for a home mortgage refinance calculator. Make sure you go there.
posted by Credit Counseling at
5:45 PM
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