Why Did My Credit Score Drop?

Aside

Credit Score - Good to Know

Why Did My Credit Score Drop?

If you’ve seen a change in your credit score recently, you may be wondering why. There are a number of factors that contribute to a dropping credit score and it is important to know what may be causing that! When buying a home, it is important to maintain your credit and not make any major purchases that could impact your score. Here are the top 5 reasons for a drop in credit:

YOU MADE A LATE PAYMENT

Accounting for about 30% of your total rating, your payment history has a big impact on your credit score. If you make a loan or credit card payment more than a month after the due date, it could cause your credit score to drop. A payment 60-90+ days late will have an even greater impact on your score.

YOU MADE A LARGE PURCHASE

Your credit utilization ratio can largely impact your credit score. Your ratio is how much of your credit you use in relation to your total available credit. The goal is to have a lower ratio so if you’ve been using more of your available credit lately, you may see a drop in your score. If for any reason your credit limit is lowered, it can impact your credit utilization ratio and impact your score.

AN ACCOUNT GOES TO COLLECTION

Timely payments on all accounts is an important part of your credit journey. Late payments on credit cards, loans, to medical facilities, student loans and utilities can be sent to a collection agency, which could in turn show up in your credit report.

YOU OPENED A NEW LINE OF CREDIT

When you apply for new credit, you are giving lenders the permission to access a copy of your credit report, which is known as a hard inquiry on your credit. If your credit report indicates that you’ve applied for multiple new credit lines in a short period of time, your credit score may be impacted.

YOU CLOSED A CREDIT LINE

Closing a card means losing available credit, which could increase your credit utilization ratio. As a result, your credit score may drop. If closing a card helps you stop spending, it may be a good idea. Otherwise, it is usually wise to keep lines of credit open. The length of time you’ve had accounts open shows that you have a solid payment history, so that could be another reason to keep that card you’ve had awhile open if you are using it wisely!

Great Lakes Home Team is here to help you with your real estate questions or needs. We have helped so many families sell their home or find their dream home. Do you want to know how much is your home worth is worth, Click here?
Get your FREE Booklet – 10 Things Every Homebuyer Needs to Know. Get started on the correct path to finding your Dream Home!

 

Protect Your Credit

Aside

Planning to buy a home? Protect your credit score

credit score

Whether you’re thinking about buying your first home or your next home, your credit score will play a huge role in determining what kind of mortgage rates are at your disposal. That’s why it’s vital to keep your score as pristine as possible throughout these unprecedented economic times. If you’re having trouble paying your bills, follow these tactics to keep your credit score protected.

 Contact Your Lenders

There’s nothing wrong with asking your lenders for help in your time of need. In fact, some may already have programs in place to help individuals affected by the downturn. See how the Consumer Financial Protection Bureau recommends discussing these issues with various types of lenders.

Know ALL of Your Accounts

Between student loans, car loans, mortgages, credit cards, and all the other lines of credit at your disposal, it’s sometimes hard to remember all of your accounts, but nothing could be more important. Knowing your accounts, and their statuses, is the only way to know if someone opens or closes an account without your consent.

Monitor Your Scores

That’s right, “scores.” There are three credit bureaus (Experian, TransUnion, and Equifax), each with their own scoring system. Different lenders trust different bureaus, so it’s important to know where you stand with each of them.

Read Your Reports

While scores are a great gauge of your credit, reports are where you’ll see all the information each bureau uses for their calculations. By keeping a close eye on your reports, you’ll be able to address any suspicious activity before it gets out of hand.

Great Lakes Home Team is here to help you with your real estate questions or needs. We have helped so many families sell their home or find their dream home. Do you want to know how much is your home worth is worth, Click here?
Get your FREE Booklet – 10 Things Every Homebuyer Needs to Know. Get started on the correct path to finding your Dream Home!

 

Your Financial Health

Aside

How to look after your financial health in times of uncertainty

Financial Health

During these uncertain economic times, many people are having difficulty paying their monthly bills. Whether you fall into that group or not, it’s important that you take steps to protect your financial future. Here are some considerations to take today to save you from budgetary burdens tomorrow.

  1.  Prioritize Your Expenses

The first and most important step to safeguarding your savings is to decide which bills are most vital to your livelihood. This worksheet from the Consumer Financial Protection Bureau can help make those tough decisions a little easier.

  1. Cut the Excess

Once you’ve prioritized your expenses, you’ll have a good sense of what you need and what you don’t. Anything that falls into the latter category should be discontinued until a later date, and anything considered a necessity should be revisited each month to make sure it still belongs there.

  1. Know the CARES Act

The government’s $2 trillion emergency stimulus package is loaded with important information for US citizens. With benefits like eviction relief, a moratorium on foreclosures, and the opportunity to defer or reduce mortgage payments, the CARES Act has a lot to offer beyond a stimulus check.

  1. Try Negotiating

From landlords to cable providers, many bill collectors are showing extraordinary empathy during these unprecedented times. If they can’t defer or reduce your fees, they may be willing to add some other kind of incentive as a show of good faith. As the adage goes, “You’ll never know unless you ask.”

  1. Consider Your Credit Cards

Charges, whether recurring or one-off, can add up quickly on your credit card statement. Take the time every week to review your statements in detail and identify those one-off charges that are adding up. Then, consider which recurring bills are worth keeping and which should be cut. Lastly, consider calling up your credit card company to renegotiate annual fees or interest rates.

Additionally, don’t forget that refinancing your mortgage or shopping around for better rates on home insurance may lighten your financial burden. If you’d like to learn more about the low-cost, high-value options available through me – Keller Mortgage and Keller Covered – let me know.

These suggestions are only the beginning. If you’d like to discuss more ways to strengthen your bottom line, shoot us a text or phone call at any time. We may not have all the answers you’re looking for, but we will do whatever we can to find them.

Great Lakes Home Team is here to help you with your real estate questions or needs. We have helped so many families sell their home or find their dream home. Do you want to know how much is your home worth is worth, Click here?
Get your FREE Booklet – 10 Things Every Homebuyer Needs to Know. Get started on the correct path to finding your Dream Home!

 

Home Buying Myths

Aside

Home Buying Myths

Although the internet can be a great resource for a variety of information, a lot of that information is incorrect. One of the most important and expensive decisions in your life, home buying, tends to circulate a lot of misinformation. Most of that misinformation is in regards to how much of a down payment you need or what your credit score needs to be. Let’s go over the real facts about buying a home and knock those myths out, so they don’t hinder your ability to purchase!

CREDIT SCORES

Though it may come as a surprise, you don’t need a perfect credit score to purchase a home. Traditional bank lenders will work with credit scores as low as 640, but your agent can also get you connected with local lenders that accept credit scores as low as 580. Although there are other required stipulations to qualify for the loan, you don’t need a perfect score in the 700’s or 800’s to get approved for a mortgage.

DOWN PAYMENTS

You don’t have to sell an arm and a leg to be able to purchase your dream house. There is a huge misconception that you need to pay a minimum of 20% down to buy. That information is outdated. These days, there a large variety of loan programs that only need an average of 3-5% down. Based on your income or military status, you may even qualify for mortgage programs that require 0% down. Although you’ll expect to pay an additional 3% in closing costs, which is separate from the down payment, this is still significantly less that 20% of the purchase price. If you’re in a buyer’s market, you may even be able to negotiate for the closing costs to be covered by the sellers.

Let Great Lakes Home Team walk you through the home buying process. It starts with a pre-approval with a credible lender and sitting down with us for a buyer consultation. Don’t let online myths persuade you into thinking you can’t qualify or afford to buy a home. There are a variety of programs to help you get into your dream house.

Home Buying Myths

Aside

Although the internet can be a great resource for a variety of information, a lot of that information is incorrect. One of the most important and expensive decisions in your life, home buying, tends to circulate a lot of misinformation. Most of that misinformation is in regards to how much of a down payment you need or what your credit score needs to be. Let’s go over the real facts about buying a home and knock those myths out, so they don’t hinder your ability to purchase!

CREDIT SCORES

Though it may come as a surprise, you don’t need a perfect credit score to purchase a home. Traditional bank lenders will work with credit scores as low as 640, but your agent can also get you connected with local lenders that accept credit scores as low as 580. Although there are other required stipulations to qualify for the loan, you don’t need a perfect score in the 700’s or 800’s to get approved for a mortgage.

DOWN PAYMENTS

You don’t have to sell an arm and a leg to be able to purchase your dream house. There is a huge misconception that you need to pay a minimum of 20% down to buy. That information is outdated. These days, there a large variety of loan programs that only need an average of 3-5% down. Based on your income or military status, you may even qualify for mortgage programs that require 0% down. Although you’ll expect to pay an additional 3% in closing costs, which is separate from the down payment, this is still significantly less that 20% of the purchase price. If you’re in a buyer’s market, you may even be able to negotiate for the closing costs to be covered by the sellers.

Be sure to connect with Great Lakes Home Team to ensure you have the right facts. Don’t let online myths persuade you into thinking you can’t qualify or afford to buy a home. There are a variety of programs to help you get into your dream house. Since these vary by county to county, and state to state, it’s imperative you get the facts. We have credible local lenders we can put you in contact with as well.

http://www.greatlakeshometeam.com – Search for your dream home.

Improve Your Credit Score

Aside

creditscore10 Tips to Improve Your Credit Score 

There are no quick fixes for improving your credit score but over time you can raise it by consistently managing your finances.

  1. Pay your bills on time – This is the best way to improve your score.  It is never to late, find a system (calendar, App) to keep you on track. If you are going to be late, don’t avoid your creditors keep in contact with them.
  2. Keep credit card balances low – High outstanding debt can pull down your score. Don’t max out your credit cards all the time.
  3. Check your credit report for accuracy – It is possible there may be inaccurate information on your credit report that can be easily cleared up.  It this is the case, then you should contact the three credit reporting agencies to get it corrected (TransUnion, Experian, Equifax)
  4. Pay off debt rather than moving it around – Consolidating your credit card debt onto one care or spreading it over multiple cards will not improve your score in the long run.  The most effective way to improve your score is by simply paying down the amount you owe.
  5. Keep your credit cards – manage them responsibly – In general, having credit cards and installments loans that you pay on time will raise your score.  Someone who has no credit cards tends to have a lower score than someone who has managed credit cards responsibly.
  6. Don’t open multiple accounts too quickly – Opening too many accounts in too short of a time period can look risky because you are taking on a lot of possible debt.  Too many inquiries can hurt your credit score.
  7. Don’t open accounts you do not need – This approach could backfire and actually lower your score.
  8. Don’t close an account to remove it from your record – It is a myth that closing an account removes it from your credit report. In fact, closing accounts can sometimes hurt your score.
  9. Shop for a loan within a short period of time – FICO scores distinguish between a search for a single loan and a search for many new credit lines based in part on the length of time over which recent requests for credit occur.  If you shop for too many loans over a long length of time this could hurt your score.
  10. Contact your creditors or see a legitimate credit counselor if you are having financial difficulties –  This won’t improve your score, but the sooner you start managing your finances well and making timely payments will improve your score overtime.

Get my free e-book 7 Home Seller Tips before You Sell.  Looking to find a home, get the most up to date listing…Search Like an Agent.  Do you live in Northeastern Ohio/Cleveland area and want to know what your home is worth?  Find out Today.