888-586-2261

Additionally, credit advice for general purchases or buying a car can differ from home-financing tips, not to mention, your FICO score can vary, depending on who pulls it. A consumer-pulled score will likely differ from when a car dealer looks…which will probably be different than when a mortgage consultant pulls your credit score. It also matters which financial institution that’s looking at the credit history and the score. A store offering zero-down credit with their store card, for example, may not look as far back as a mortgage banker, or they may not look at medical collections the same way, either.

A lot is riding on your FICO score when you’re looking to buy a house. So, it benefits you to have a few tips to keep in mind if you’re considering a purchase in the future, near or far?

“Highlight” these 6 credit tips when you’re getting on the road to mortgage-ready credit.  Tweet This…

1 – Pay your payments on time, all the time. Whether you’re 6 months away from buying a house or 6 years, paying your bills on time is a big one. Late payments can negatively affect your credit score for years. Sometimes “things come up,” and a late payment just happens. Fortunately, some bills have grace periods. Make sure that if you’re going to be late on a payment, it’s one with a grace period. The ones without, should be paid first. Then make sure you pay the late ones as soon as possible. Again, late payments can have a major impact on your credit score. Payment history actually makes up about 35% of your FICO score.

2 – Don’t close credit accounts, yet. Paying down balances to zero is generally a great idea. However, don’t close that account just yet. Wait until you talk to a mortgage consultant about your FICO score in particular. A varied, seasoned credit history helps your score. That credit card you opened up your freshman year at college shows that you’re a long-term consumer. That helps. Don’t max it out, but keep it at about 30% of the limit or less. Keep it at zero, just make sure you use it occasionally. A long history with various lines of credit – credit card, car payment, insurance, cell phone bill – shows that you’re a “good borrower.”

3 – Keep an eye on your credit history. Checking your credit often is a great way to make sure no one is stealing your identity. You have the right to check your score with each of the major credit bureaus once a year. This means you can do it all at once, or each quarter check with a different bureau. Keep on top of fraudulent charges or other issues so you’re not surprised when a creditor pulls your FICO score. Preparation is vital.

4 – Don’t open line after line of credit. When you’re getting close to buying a home and you’re ready to get your mortgage pre-approval, it’s not a good idea to go buy a new car, motorcycle or a bunch of furniture on credit. Remember: your mortgage pre-approval is based on your current financial situation. If you change that drastically, your pre-approval could turn into a denial.

5 – Avoid major purchases. Even if it’s not on credit, a major purchase during your mortgage pre-approval time frame can sap your cash reserves. A vacation or new appliances might have to wait until after you close and move into the new house.

6 – Finally, try to avoid job changes. Whether it’s leaving your job, or a big change to your hours worked, changes in employment can sometimes have adverse effects on your home buying journey. If you worked a ton of overtime in the months leading up to your mortgage pre-approval, cutting way back on your hours before you close on the mortgage could affect your full, official approval. Keep things as even-keeled as you can.

One of the best things you can do as you consider launching your ship on a home-buying journey, is to talk to your local lender about mortgage pre-approval. Make sure you’re on the right track with your finances before you go house hunting. Tweet This…

2. Blaming others and whining
This may sound harsh, and it is not the intent at all, but if you want to improve your credit scores, blaming others and whining about your credit woes is NOT allowed. You can blame your spouse, or ex-spouse, your parents, the government or economy, the list goes on, but it won’t change a thing. No crying over spilt milk. Take responsibility and move on with a plan to change the future. Nuff said.

5. Robbing Peter to pay Paul
While writing this post, my daughter asked me to explain what this idiom means, and after explaining she asked me “why Peter, and why Paul?”. I didn’t have an answer for her except that it must mean that it is a very old idiom. This means this concept of taking, or borrowing from one place to pay your debt somewhere else goes back ages. It doesn’t work, though, for it is essentially an endless cycle. You never get out of debt. Rarely does this series of activities bring about a positive benefit. If you find yourself in this never-ending rut, stop it. I know it is easier said than done, but a plan must be put in place to be ruthless with yourself, and find a different way to satisfy your debors. A better solution is the snowball debt reduction method.

Personal Information such as name, address, date of birth, Social Security Number and employment data (where you work(ed) only) are included.

Account information. Account information includes loan amount, credit limit, balance, payment dates, payment rating and history, to name a few.

Collections by 3rd party collection agencies.

Public records like judgements, tax liens, bankruptcy, etc. are reported.

Inquiries, when and where, but not for how much, and why you applied for credit. Inquiries initiated by you are called “hard” inquiries, which are results from applying for new credit such as credit cards, vehicle loans, mortgage, etc. Go here for more on inquiries and the myth surrounding their impact on your credit score.

Information NOT included in credit reports:

No salary or income history whatsoever is included

Medical history is not included, although medical collections via a 3rd party collection agency may be.

No arrest or criminal records are reported.

Property tax records are not included.

Insurance premiums or insurance claims are not reported.

Personal information like gender, marital status, race, religion, nationality, political affiliation and personal lifestyle is not a part of your credit reports.

Payday loans (unless in collection), debit cards and prepaid debit cards are excluded

Inquiries initiated by you online, called “soft inquiries” are not reported and have no effect on your credit score.

Financial Institution accounts like checking accounts, savings accounts, CD’s, or investment accounts. NSF checks will appear if sent to collections.

While some of the above information like income and assets may be considered by lenders such as mortgage banks, and auto finance companies, etc., in their decision process, you need only be concerned about the information that is reported on your credit reports as far as your credit score in concerned. Information not reported on your credit reports does NOT impact your credit score.

By Blair Warner (see About US page for more info.)

You have finally done it! Congratulations! Your hard work paid off! You pulled yourself out of credit card debt and restored your credit rating through credit repair, and now, no doubt, want to avoid making the same mistakes that drove you into debt in the first place. In one sense, it is easy, but, as we all know, it is just as easy to get back into credit card debt again unless some habits are changed, and systems in place to avoid it.

Consider the following simple strategies for credit and financial management.

Make a budget

The best way to avoid going back into credit card debt is by making yourself a budget. You will want to be realistic about your budget. Think about what your spending was before that got you into debt and figure out how you are going to avoid overspending on the same things. The secret to budgeting success is to keep on track with your budget. You may want to enter in your expenses every day, weekly or pre-determined, regular times so that you do not get behind without realizing it. If you spend too much in one area, try to make up for it from another one.

Think about whether you really need all of your credit cards, and possibly get rid of some.

Some people will just spend what they have available. If you do not need all of it, which most people don’t, then you might want to start cutting down on them. This is a tricky one, though. You don’t want to get rid of all of them, yet you have to be a bit strategic on which ones to close and which ones not to, so that the hard work of building a new credit score is not wasted. If done right, it might also help your credit rating. Here are some suggestions:

You might want to start with all of the miscellaneous store credit cards that you have. Not only might this make it less likely for you to go shopping when you really don’t need anything, but store cards often charge more interest, and don’t report to the Transunion, Experian and Equifax as often as credit cards like Visa, Mastercard, Amex, etc. — not adding as much benefit to your credit scores.

You do NOT need a gas card. It is better to use a general credit card and then pay it off each month. Things like gas and groceries really shouldn’t be bought on credit anyway, but if you want to use your credit card as a type of debit card (it is not, though. It is indeed credit), then paying it off each month is important.

During your previous credit repair journey you should have been advised which cards to close and which ones to leave open. If you have not done that yet, consider closing the younger ones first, and/or the ones with higher interest rates. Again, this must be done somewhat strategically. Ask your credit specialist for advice.

Pay with cash most of the time.

Some people who are survivors of credit card debt want to deal with credit cards as little as possible. They may just take out how much cash they want to spend at any given time and just bring that with them when they go to the store. They will not have the option of overspending.

Do not go shopping. (easier said than done, right?)

Some people just cannot help themselves when they are at the store. Do you get a “Must have it, gotta have it, can’t live without it” mentality when you go shopping? If this is you and caused you problems in the past, then you might want to just avoid the stores altogether. That also goes for the online shopping websites if that is your weakness.

When you get the urge to spend, think about how hard you worked to get out of debt and repair your credit. Be proud of yourself when you see your bank account growing and as you see yourself getting in charge of your finances. This simple tips above will help you stay out of credit card debt for good.