Credit- Glorious Credit!

I started last week talking about the process of buying or selling a home. This is part 2 of that- I will post things once a week that deal with this and what you should and shouldn't do. So this week is about credit. We all have access to our credit reports these days. Make sure you check yours! Most people don't have any idea what is on their credit. Before you even start looking or thinking of putting your house on the market and purchasing a new home I recommend pulling your credit and see what pops up. There are numerous places you can get this information from and you are eligible to one free credit report per year. You can pay to have your scores included but it is not absolutely necessary.
Nothing is worse than putting your house up, getting a contract and THEN trying to get a loan. What happens if you don't qualify for the new loan and here you are with a contract to sell and you have no place to go? Be proactive with your credit!
Some things to remember in keeping your scores up:
First, ALWAYS pay on time! As soon as the bill comes in, pay it -even if you can only pay the minimum. If you can pay the entire balance then pay the entire balance all but about 5.00 so there will be something to report.
Second, DO NOT close accounts. Everyone thinks they are helping their credit when they close accounts, but you aren't. By closing accounts the creditors have nothing to report which in turn hurts your credit.  Keep them open, just don't use them.
Third, keep the balance to credit limit at a 50 percent or below ratio. If your credit limit on a credit card is 2,000.00 the balance you should have is 1,000.00 or below.
Fourth, any new credit will lower your scores. Don't think because Honda Financial approved you at 0 percent interest on your new car that you will also now be able to buy a new home with a garage to store new said car. Doesn't work that way because your scores just dropped when you signed on that dotted line.

If you have things that are reporting in error you need to get them corrected. You can do this yourself or you can pay a credit repair company to do this for you. I will add that if you do choose to use a repair company, make sure you do your due dilligence in researching them (I have a couple I recommend if you need someone). The one thing I do like about using a repair company is, there are numerous laws that a creditor has to follow in order to report negative on your credit. The repair companies know what these are and go after them based on this. Just remember, it takes time to get your credit cleaned up- it is not something that magically disappears overnight.  There is no way to determine how long it will take to get things corrected but usually you are looking from 30-60 days for some items- sometimes it can take longer.
The days of 580 credit scores are long gone. Lenders now require a minimum 640 score or higher, some loan programs still allow a 620 score and all the lenders have to go by is what they see on paper, so make it look good! They love the warm fuzzies they get when they see good credit!