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Do You Need Help with Your Credit Scores?

January 3, 2013

Lenders have tightened their lending standards and many homebuyers now and into the future may need to improve their credit scores to get pre-qualified or pre-approved for a mortgage.  Read the following steps you can take for some speedy credit repairs to gain lender approval and the best possible rates, especially if you are months away from a purchase.

*  Paying revolving credit cards down is generally more beneficial than paying down student, mortgage or even auto loans.

*  Always leave a 30% or higher gap between what you owe on a card and the cards limit.  Lenders look for this as the minimum gap.

*  Pay down the cards closest to their limits first for speedier credit repair.  The lending bank will then see the “gap” it wants to see.

*  Do not ask a creditor to lower credit limits.  Generally, carrying smaller balances on several cards is better than one large balance on just one card.

*  Check your credit card limits t make sure the report is correct.  Limits may not be reported on all cards.

*  Never make a late payment on credit cards or any loan.  Late payments make the biggest hit on your credit reports.

*  Protest any unjust negatives such as late payment, collections that are not yours and any items not report as “paid as agreed” if you paid on time and in full.  Make sure you do this with all 3 credit report agencies.

*  Protest items listed as unpaid that were included in a bankruptcy, and items older than 7 years (10 for bankruptcy).

*  Focus first on the larger, newer negatives listed on the reports.

Also, one last “Buyer Beware” – if you will be looking to purchase a home in the next few months, hold off on making any large purchases, so that your credit balances stay low and the history stay clear.  If you have already applied for a loan, do NOT make any large purchases – such as that new refrigerator you want for your home, or that new car to celebrate this new home!  This could disqualify you for a loan since your credit may be run again just prior to granting the loan and the amounts they needed to see months ago, are no longer the same.

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