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Improve Credit Scores

When thinking about buying a house or a car, a person's credit score is a very important number. The interest rate one will pay for the money borrowed will be determined, in large part, by this three-digit number. The range for a credit score is 300 - 850, with 300 being the very worst possible and 850 being the very best possible. A credit score over: 700 is considered excellent, 660 to 700 is average, below 660 usually means some work needs to be done.

The mantra for getting a great credit score is...and this may sound obvious but…
1. Pay bills on time or in advance
2. Keep account balances low
3. Take out new credit only when needed

Speedy upgrade: Suppose there is a need to improve a score to get a better rate when applying for a loan on a big purchase.

1. Get a credit report and credit score to check the standing. A FREE Report from each of the three credit bureaus is available once per year by going to www.annualcreditreport.com. The credit score is an additional charge of approximately $8.00. If the score is over 720 or more don't worry about it. Improving ones score from a 720 to a 740 won't get better terms.
   
2. Look for errors in the report, such as accounts that don't belong, late payments that were actually paid on time, debts that where paid off that are shown as outstanding, old debts that shouldn't be reported any longer.
   Negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years.
   
3. Pay down balances on credit cards
   
4. Spread out debt between a few cards vs. maxing one card out

A Big No-No!!! Don't close unused accounts to improve a credit score. If you do close an account it is suggested to do it after the intended purchase has taken place. Also, it is better to close new accounts vs. old ones. Keep in mind, if an older account is closed, it may make one look like a newer borrower.

The bottom line is that people are not powerless when it comes to their credit scores. Understanding what your credit score is now and what's influencing it today will pay off when it's time to make a big purchase.

This information is not legal advice. If you have specific questions contact an attorney.

If you, your friends, or family are thinking about buying or selling real estate don't hesitate to call or email Andrew.

(206) 930-8238

info@SeattleHomeKey.com

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