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Improve your score

Believe it or not, just a few short years ago, mortgage lenders used to base their credit decisions on a borrowers overall credit as opposed to relying heavily on a customers credit score. Now it is score, score, score and it is the rare lender out there that doesn’t place an emphasis on your three digit number. But how do you go about making sure your score is as high as it can be?

The obvious answer is to make sure you pay your bills on time. However, it is possible to pay your bills perfectly and still not have a good score. This is because a credit score also takes into account how much for instance you owe compared to your credit limit. For example, let us assume you have a high limit on your credit card of $2000. If you have an outstanding balance of greater than $1000 then that would start to have a negative impact on your score. The perfect percentage depending on whom you ask is anywhere from 25-35%.

Not that you want to head down a path of having more debt than you can manage to pay off on a monthly basis, but if you find yourself with a balance on a credit card that you are managing adequately, but your balance is greater than half of the limit, you should consider calling that creditor and asking for a higher limit. Again, just make sure a year from now you don’t find yourself owing twice as much on that same card as you do today.

Credit scores and lending practices and can be a tricky thing to explain. Just be aware that I am always available in my office if you have any questions regarding your credit.

Look out for more of my Information for Life on http://www.vernon-realty.com/

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