Credit Tips for Lower Interest Rates

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A good credit score typically translates into a lower home loan interest rate.

The better your credit score, shows creditor that your debts are paid in a timely manner. The lower your credit score, shows creditors that you are less likely to make payments on time. For those with lower credit scores, lenders may adjust  loan interest rates to accommodate for the additional credit risk on  the issued loan.

If you wish to improve your credit score, there are many ways to do so! Here are just a few:

Focus on recent derogatory credit. Concern yourself most with past due balances, charge offs and collections that have occurred in the last two years. Items more than two years old have less impact on your current credit score. In fact, if you pay off delinquent items over two years old, this can significantly reduce your credit score.

Keep existing credit card accounts open.Never cancel your credit card!Your established credit history matters! Even If you have old credit cards that you don’t use often, you still have the benefit of the history they represent.

Try to distribute debt evenly across your credit cards. If you can’t pay off all your debt at once, try to keep balances as close to zero as possible, aiming for under 30 percent of the available credit limit. One way is to transfer balances to a card offer no interest for a period of time. Also, if your credit provider increases your credit line, the ratio of debt to available credit is automatically reduced. The goal is to keep the amount you owe as low as possible on each card.

Remove errors on credit reports. Check your credit reports every year for any errors and delinquent information. Follow the dispute process to challenge any inaccurate information. You can do this free through credit karma—credit reporting agencies must respond to you in 30 days. If they are unable to verify they must remove the account from your credit report.

If you or anyone you know has questions regarding available home and hard money loan options, please get in touch. I’m happy to help!

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