Understanding Your Credit

Credit Consultation

Let’s face it, credit scores influence a lot of your financial profile. When someone has low credit scores they often have outstanding debt or financial skeletons that are looming. On the other hand, a clean credit history allows for higher credit to be extended, and lower interest paid on loans and debts.

A lower credit score is not beyond repair. Some are more damaged than others, but there are calculated steps that can be taken to get back to a solid credit standing. In this blog post I will mention some of the factors considered by the credit bureaus, and how to increase your credit scores with either a short or long term approach. Sometimes there are immediate actions that can be taken to increase credit scores, and in other situations it might take some time. Either way, I’m here to give you the blueprint.

FICO credit


CREDIT RESTORATION

Pay all of your bills on time, every time
– Even if your payments are a few days late, this can have a negative impact on your credit score. A 30+ day late payment will be reported to the credit bureaus and show as a derogatory mark on that trade line.

Revolving balances/Credit cards
– Keep your credit card balances low. High outstanding debt can negatively affect a credit score. The rule of thumb is to keep revolving balances below 30% of the credit limit.
– Don’t close unused credit cards. If a credit card has been open for a long time, and has a low balance, it is good for your credit standing.
– Don’t open a number of new credit cards that you don’t need, just to increase your available credit. This could backfire and potentially lower your scores.
– Have credit cards – but manage them responsibly.

Get current and stay current if you have missed payments
– The longer you pay your bills on time after being late, the more your scores should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever. Derogatory marks fade as time passes and as recent good payment patterns show up on your credit report.

Collections
– A paid collection account will not automatically be removed from your credit report. These will stay on your report for seven years before falling off.
– Once a collection hits your credit report it has done its damage to your scores. Paying off the balance will not increase your credit scores since it stays as a derogatory mark, but updates to a $0.00 balance. Focus on other items prior to collection accounts since other activity will actually help the scores increase.

Family Credit


CONSULT A LENDER

At First Home Mortgage have tools at our disposal that can help show your potential credit increase. Once we take a look at your credit history we can utilize our “What-If Simulator” which is basically a crystal ball to show what would happen to your scores if you execute certain credit activity.

After a brief consultation we will be able to determine your current qualifications, or put you on a plan with an estimated time-frame to improve your credit and finally reach qualifying range.

Apply online or call today to schedule a free consultation! 301-327-5817 or tsisson@firsthome.com. The sooner you begin your journey, the sooner you can make home ownership a reality.

Credit House

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