Because I’m not a “credit expert”. Unfortunately for you, a good deal of the people who claim to be aren’t either.
I can’t tell you definitively how to acquire a great credit score. In fact, I would be extremely wary of anyone who tells you they can get your score to a specific number within a specific time frame.
Danger Danger!
Credit repair scams are rampant, and you have to be extremely careful.
I can tell you what I have seen. And I have seen a lot since November 2005, which is when I started in the mortgage industry.
I can also tell you is there are tried and true methods to increase your score if you have negative items on your credit.
How much your score improves is based upon your entire credit history, so it is impossible to say how many points you can add to your score.
Think of credit improvements like cake frosting. I know, I’m a repeat offender with the cake references.
Credit Repair...Delicious!
You may have a favorite cake frosting. There may even be a particular cake frosting that you would eat with a spoon, sans cake. However, the flavor profile of that frosting changes depending on the variety of cake you put it on.
In this instance, the cake is your credit history.
Recipe for good credit
Disclaimer: I am going to “bookend” this advice with the proviso that this is based on anecdotal evidence.
Let’s say you have a few high-balance “tradelines”. Tradelines are accounts that report to the credit bureaus.
Let’s further say that you are only a few points away from your target credit score. Again, you have few tradelines, but the balances are high. Like over 50% of the high credit limit.
You might think this to be discouraging if you don’t have the cash to pay them all to zero.
via Jean.julius
If you are making your payments on time, that means these tradelines are contributing to your credit history in a positive way. It’s the ratio of balance to credit limit that’s hurting you.
So, instead of applying all of your available resources to paying one or two of them off, see if you can pay them all down below 30% of your credit limit.
Again, no guarantees, but I have seen this do wonders for people with an otherwise good credit history. Again, disclaimer: there are nearly countless factors that go into your credit score. This may not be the fix for you.
I’m going to make this the beginning of an ongoing series on credit issues. There is simply too much to cover in one post. I hope this helps folks understand a little bit more about credit, whether they are applying for a home loan or not.
Questions about credit? Hit me! Call 503.799.4112, email jason@mypmb.us, or use the following “no-spam-guaranteed” contact form. Your info will be kept private.
