Are you in the market to refinance your home? But do you realize that your credit score will not get you far in finding a good rate? Well, this article is going discuss many tips that you can use to improve your credit score. Remember, it will be a gradual process, but it will be very worth it towards the end.
Here are some statistics and background about bad credit affecting us:
- More than 43 million Americans have damaged credit or bad credit. This can be because of many reasons. Some reasons may be:
• Loss of job
• Sudden medical problem
• Housing market
• Credit card debt in general.
You can fix these slight mistakes so it won't stay on your record forever. You just must realize to take imitative and realize how much better it will be for you and your family if you have these mistakes fixed, and the good news is that it is a fixable! Here are some simple tips and steps to follow to get you back on your feet and still get a mortgage with bad credit.
1. Find out your current credit score. Where do you stand? Make sure you get one of the top companies in the credit score business to give you an accurate result of what your credit score really is. You can use Equifax, Experian and Trans Union to find out. You are entitled to a free credit report once a year through annualcreditreport.com. Then compare your results with the FICO sore and standings.
FICO Scores & Ratings
720-850 Excellent Credit
680-720 Good Credit
640-680 Fair Credit
350-640 Poor Credit
000-349 No Credit
Here is the statistics of how Americans have
Their credit rating divided:
• 10-13% – Excellent Credit
• 28- Good Credit
• 33% fair credit
• 22% Poor or no credit
If you stand in the fair or poor areas, check the following tips to really fix your credit and try to be in the level of good credit or even excellent credit.
2. Fix any credit card errors – The credit scores are based on your credit card bills and paying. So if you spot any error, make sure you have it fixed because ultimately, it will harm you via your credit score. This can really impact your credit score.
• Late payments – If you have your payments late, have it marked as a courtesy.
• Make sure you credit card bills shows accurate amounts – check your credit card bill and make sure you aren't overcharged for anything.
3. Try not to add any more debt to your existing debt – If you have a big debt already, try not to increase it even more! That is just like shooting yourself in the foot. Big balances will really look bad on your credit report. If you have these pay of these debts and get your credit in control.
4. Pay your bills and pay them on time! – You would think this is then most easiest thing, but you would be surprised how many people fail to do so. You want to have regular monthly payments of your history. If you pay consistently for 12 months of more, lenders will look at you as someone who is reliable, and you will get a mortgage with bad credit. Sometimes some lender will erase your previous faults of your history if you prove you can pay consistently more a month or more.
5. Pay down your credit cards – If you can, try to pay down any existing balance on your credit card. This can really improve your credit score. Do this as soon as possible.
6. Keep old credit cards, avoid new ones – if you close your bad credit cards it really will not make your credit score better. Your long term history is what really matters. Your payment history makes 35% of your credit core so it is better to keep these old accounts open and active. If you don't use your account, the issuers may close it anyways. Also don't open any new accounts because the ones with more age have the most impact on your credit score. Work towards paying your balances on these and you will be set to go.
7. Create a budget and stick to it – This is also a simple one but many people don't follow it! Set yourself a financial goal and honor it. Set aside money for kids, leisure, traveling, buying a home, care, remodeling, and college. But still make sure you have enough money each month to pay off your credit card and other bills. You many need to work hard to get this to work but after a while it will become second nature. Again, make sure it is realistic. Also just stick to it, don't wander off.
Follow the tips mentioned above and you will be well on your way. Also make sure that you follow each one closely and be persistent to get your payment back to normal. If you can improve, you may even be eligible for a mortgage with bad credit!
Here are some statistics and background about bad credit affecting us:
- More than 43 million Americans have damaged credit or bad credit. This can be because of many reasons. Some reasons may be:
• Loss of job
• Sudden medical problem
• Housing market
• Credit card debt in general.
You can fix these slight mistakes so it won't stay on your record forever. You just must realize to take imitative and realize how much better it will be for you and your family if you have these mistakes fixed, and the good news is that it is a fixable! Here are some simple tips and steps to follow to get you back on your feet and still get a mortgage with bad credit.
1. Find out your current credit score. Where do you stand? Make sure you get one of the top companies in the credit score business to give you an accurate result of what your credit score really is. You can use Equifax, Experian and Trans Union to find out. You are entitled to a free credit report once a year through annualcreditreport.com. Then compare your results with the FICO sore and standings.
FICO Scores & Ratings
720-850 Excellent Credit
680-720 Good Credit
640-680 Fair Credit
350-640 Poor Credit
000-349 No Credit
Here is the statistics of how Americans have
Their credit rating divided:
• 10-13% – Excellent Credit
• 28- Good Credit
• 33% fair credit
• 22% Poor or no credit
If you stand in the fair or poor areas, check the following tips to really fix your credit and try to be in the level of good credit or even excellent credit.
2. Fix any credit card errors – The credit scores are based on your credit card bills and paying. So if you spot any error, make sure you have it fixed because ultimately, it will harm you via your credit score. This can really impact your credit score.
• Late payments – If you have your payments late, have it marked as a courtesy.
• Make sure you credit card bills shows accurate amounts – check your credit card bill and make sure you aren't overcharged for anything.
3. Try not to add any more debt to your existing debt – If you have a big debt already, try not to increase it even more! That is just like shooting yourself in the foot. Big balances will really look bad on your credit report. If you have these pay of these debts and get your credit in control.
4. Pay your bills and pay them on time! – You would think this is then most easiest thing, but you would be surprised how many people fail to do so. You want to have regular monthly payments of your history. If you pay consistently for 12 months of more, lenders will look at you as someone who is reliable, and you will get a mortgage with bad credit. Sometimes some lender will erase your previous faults of your history if you prove you can pay consistently more a month or more.
5. Pay down your credit cards – If you can, try to pay down any existing balance on your credit card. This can really improve your credit score. Do this as soon as possible.
6. Keep old credit cards, avoid new ones – if you close your bad credit cards it really will not make your credit score better. Your long term history is what really matters. Your payment history makes 35% of your credit core so it is better to keep these old accounts open and active. If you don't use your account, the issuers may close it anyways. Also don't open any new accounts because the ones with more age have the most impact on your credit score. Work towards paying your balances on these and you will be set to go.
7. Create a budget and stick to it – This is also a simple one but many people don't follow it! Set yourself a financial goal and honor it. Set aside money for kids, leisure, traveling, buying a home, care, remodeling, and college. But still make sure you have enough money each month to pay off your credit card and other bills. You many need to work hard to get this to work but after a while it will become second nature. Again, make sure it is realistic. Also just stick to it, don't wander off.
Follow the tips mentioned above and you will be well on your way. Also make sure that you follow each one closely and be persistent to get your payment back to normal. If you can improve, you may even be eligible for a mortgage with bad credit!