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Follow these guidelines to fix or help your current credit score.

What To Do

•    Order your credit report and search for errors. You can get free reports from    annualcreditreport.com. Dispute mistakes!  Please keep in mind there are an alarming amounts of  mistakes on Credit Reports because of the amount of credit people have and have applied for.

•    Pay your bills on time. Your payment track record accounts for about 40% of your FICO score.

•    Be patient. Negative information like late payments will generally drop off your credit report between five to seven years

•    Maintain a healthy mix of credit. A blend of revolving; such as credit cards and installment loans can help boost your score.  This is even more important over the past few years with some of the new regulations.

•    Apply for your own credit cards. Have 3 open lines of active credit at all times.

What Not to Do

•    Don’t max out your available credit. Keep credit-card balances low relative to your credit limit.  This is even more important under newer regulations (again – which ones?).  My personal suggestion is to never have a 30% credit balance or more borrowed on a credit limit.  Example: $10,000- limit on a credit card, never go above a $3000- balance on that credit card, etc.

•    Don’t dawdle when shopping for the best rate on a loan. Confine loan shopping to a few weeks so that credit inquiries won’t weigh on your score.  Please do not have 10 Banks pull your credit in 10 days.

•    Don’t open up a bunch of credit-card accounts you don’t need, thinking the higher lever of available credit will boost your score. Your FICO score will generally drop a few points with each new account.

•    Don’t close old credit-card accounts in an attempt to improve your score.  You’ll lower your total available credit, which could damage your score.
Ask me how to increase your score in 90 to 120 days?

Take out two new lines of credit (Yes, believe it or not I said take out two new credit cards) and use one for gas and one for groceries. I would suggest getting major Credit Cards (Visa, Mastercard, Amex, etc.) Use them, pay it off, use them, pay it off, use them, pay it off, etc.  Never adding any additional monthly debt, paying all of the charges off every single month.  This method will add 20 to 40 points to your Credit Scores in months.

Sources: Fair Isaac, WSJ Research

Questions? Comments? Use the form in the sidebar or call me!
bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.
 

By Brian Cav

The answer is most likely yes!

Borrowers are taking advantage of rock bottom rates to refinance their home mortgages. Mortgage interest rates are at all-time near record lows! Homeowners are using the opportunity to adjust the terms, payment and interest rate on their loans. This "rate fiesta" might be coming to a halt soon, though - in 2010 the government will stop buying mortgage-backed securities. Without this enormous customer, rates will start to climb. Here's what the Wall Street Journal had to say earlier this week about the recent surge in applications and the coming market changes:

Last week’s post-Thanksgiving shopping rush also saw a surge in mortgage applications, with loan application volume up 8.5% from Thanksgiving week on a seasonally adjusted basis.

But mortgage rates rose modestly last week, to an average 4.88% from 4.79%, according to the Mortgage Bankers Association, ending a six-week run of declining 30-year fixed rates.

The boost in applications was driven primarily by refinance interest, and the MBA’s Refinance Index gained 11% from the previous week, while the Purchase Index was up 4%. New home loan applications were driven almost wholly by demand for government-backed loans from the Federal Housing Administration and other federal agencies.

Mortgage rates have been at near-record low territory for the last couple of months, but the big question is what will happen next year, when the Federal Reserve is scheduled to end its purchase of mortgage-backed securities that has helped push rates down for much of 2009. (Nick Timiraos, WSJ real estate blog, 12/9/09)

Refinancing could save you a considerable amount of money over the life of the loan and potentially improve your overall financial outlook!

How would refinancing now help you?

•    Refinance to a lower interest rate which will lower your monthly payments.  What is your current Rate?
•    Convert your current Adjustable Rate Mortgage (3/1, 5/1, 7/1, or 10/1 ARM) to a fixed- rate loan, which will keep your payments safe from possible interest rate increases. The 30 year fixed is at a all-time low, lock it in and give yourself piece of mind
•    Shorten your loan's term to save even more money. 25 year fixed? 20? Can you afford a 15 year fixed mortgage payment?
•    Combine a first and second lien to a single loan for simplicity and savings. Debt consolidation to one loan!

You may also be able to tap into your home's equity with a cash-out refinance and use the cash to fund home improvements, college tuition, or other major expenses.

What To Do:

1.  Submit a Refinancing Application via Phone, Email, Web, etc.
2.  Mortgage Refinancing Application gets Processed and Approved
3.  Pass along your Approval Conditions and Disclosures, Appraisal gets completed and Approved
4.  Schedule a closing 45 (+/-) Days from Application Date

• Wikipedia - Refinancing http://en.wikipedia.org/wiki/Refinancing
• bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry.

Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021
Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.