Tips On Quick Fixes To Boost Your Credit Scores
There are quick fixes to boost your credit scores. Your credit scores is one of the most important factors taken into consideration when applying for a mortgage loan. Your credit scores will determine whether or not you qualify for a residential mortgage loan and the type of loan programs you qualify for. Your credit scores will determine your mortgage rates as well as your insurance premium. Your credit scores will also determine the amount of down payment you need to put down on a home purchase. For example, if your credit scores are below 580 FICO, you need to come upwith a 10% down payment. If your credit scores are above 580 FICO, your down payment can be as little as 3.5%. If you have credit scores above 620 FICO, your debt to income ratio can be as high as 56.9%. However, if your credit scores are below 620 FICO, your debt to income ratio gets drastically reduced to 43%. If you are a potential home buyer and are looking to purchase a home in the near future, you should contact a mortgage loan originator and see what you need to do to maximize your credit scores. There a many quick fixes to improve your credit scores besides paying your monthly bills on time.
Things That Will Hurt Your Credit Scores
If you had prior bad credit and you have open collections or creditors who you owe money to, do not pay off any old debts. By paying off old debt or open collections, that will drop your credit scores by 50 or more points because it activates an old credit account and makes it a current derogatory. The chances are that the old negative credit accounts or collection accounts will leave you alone or be charged off where once you pass the 7 year statute of limitations, it will fall off your credit report. Bad credit accounts and collection accounts over two years old have extremely little or no impact on your credit scores. You can qualify for a mortgage loan with old bad debt and/or open collection accounts. Do not pay off any old bad debts with balances until you speak with a mortgage loan originator or a credit consultants.
Credit Inquiries During Mortgage Process
Don’t apply for new credit unless you absolutely have to. Each credit inquiry will drop your credit scores by as much as 5 points. There are cases where people apply for a dozen credit cards all at once. This will literally destroy your credit scores and will most likely disqualify you from obtaining a residential mortgage loan.
Advice On Quick Fixes To Boost Your Credit Scores
If you currently have credit cards and have high balances on them, this is hurting your credit scores. By paying down your credit balances down to 25% of your credit limit, your scores will greatly improve by the next credit reporting period and this strategy is some quick fixes to boost your credit scores. There are many cases where a consumers credit scores improves by more than 70 or more points just by paying down their credit card balances down to the 25% of the credit limit level.
Prior Bad Credit Or No Credit: Quick Fixes To Boost Your Credit Scores
If you had prior bad credit and currently have no credit, your credit scores are probably low and there are some quick fixes to boost your credit scores. However, if you can get a few secured credit cards, your credit scores will shoot up fast. One $500 credit limit secured credit card can boost your credit scores by 20 or more points. The ideal amount of credit cards for you to get is 3, $500 limit secured credit cards. If you have low credit scores or recent prior bad credit, do not bother and waste your time in trying to get approved for an unsecured credit card. The chances are that you will not get approved.