San Diego real estate blog - Peter Toner

Here’s hoping we’re all on the higher end of the scale! For those who are trying to mend their credit history it is quite simple and it doesn’t require hiring someone to help you, as many companies would like you to believe…. it just requires the knowledge necessary on working with the “numbers”.

If you are planning to buy a home in San Diego in the future it’s never to early to work on your credit score. Following up on these tips now will help you qualify for better terms and interest rate: 

  First off - review a copy of your credit report from the three main reporting bureaus TransUnion, Equifax and Experian. The TransUnion website has a link that guides you on how to obtain a free copy of your credit report. Find the details here on how you can get a free credit report - http://www.transunion.com/corporate/personal/factAct.page.

  Once you have your report review the details and make sure the information is correct. Check your current and previous addresses, phone numbers, previous and current employers etc. If any of the information is not accurate, you will need to contact the credit bureaus to correct it prior to applying for a loan. Updating your information with the bureaus will be a timely process so make sure you give yourself enough time to complete it prior to applying for a loan.  (Discrepancies are frowned upon by lenders.)

  Next look at the numbers - review the details below each credit bureaus FICO score. Too many inquiries, high revolving balances, late payments, and too many open lines of credit not only lower your FICO score, but also are big red flags to lenders saying “I might be an at risk borrower”.

  Pay down your credit lines that are up to the high limits. Lenders don’t like to see high balances and to the max cards, plus the credit bureaus make deductions on your FICO for having cards maxed to the high balance.

  With the holiday shopping season around the corner don’t give in to the temptation of applying for a credit card at the register! Doing so at each store hits your FICO hard with too many inquiries, each time you apply you get an inquiry. BUT if you are applying for a mortgage this doesn’t apply….  as long as it is within the same 30 day period you can apply with different lenders and its only counted as one inquiry (read more about consumer protection on the bureau websites).

To read more about the details behind how your FICO score is determined and your rights as a consumer check out this website - http://www.consumersunion.org/creditmatters/creditmattersfactsheets/001633.html.

Written by Shawn McDonald