San Diego Home Mortgage – FICO Score TipsBy
When looking for a San Diego home mortgage, good credit is more than worth the effort it takes to both achieve and preserve. If you have good credit, I hope these tips will help you push your scores even higher. If you have less than perfect credit, now is the time to start rebuilding it so that you can qualify for the right San Diego home mortgage. If you are planning on buying a home in the next 6 to 12 months you cannot afford to make these mistakes!
Do not get behind on any existing accounts. Just one 30 day late payment will drop your credit score 25 to 75 points. If you miss a mortgage payment you may be disqualified from getting a new San Diego home mortgage completely.
Do not pay old collections, charge offs or medical bills. I know that this one sounds crazy but paying on old collection account will immediately make your FICO score drop. You should not pay off old accounts before or during your escrow unless the underwriter for your new San Diego home mortgage is the one instructing you to do so.
Do not close credit card accounts. In the past BEFORE the FICO score model some banks and lenders would want you to close accounts because if you had access to the credit the assumption was that you would use it. Now when you close a credit card account it will make your credit score drop on the next bureau update. A big part of the credit scoring model is how much debt compared to the amount of your available credit. On your revolving accounts you should be sure to keep your balances low. Having balances under 35% will give you the maximum credit scoring results. For this reason you don’t want to consolidate your credit card balances onto one or 2 cards. The length of your credit history is also very important. So if you have to close an account make sure it is a newer one.
A question that I get all the time is, “How fast can my score go up 100 points?” ,unfortunately the only way that the credit score moves fast is DOWN. When you are trying to get a San Diego home mortgage doing NOTHING is better than doing anything fast. The FICO system and credit scoring model is set up to reward stability. If you start changing things around (especially doing the wrong things) and your credit usage habits change drastically, it will almost always make your credit score drop.
If you have any credit or San Diego home mortgage questions or would like a copy of our Credit Scoring booklet give me a call at (619)285-2921 today.