I recently had a client who, despite having paid his bills on time, had a relatively low credit score.  This was due to his credit cards and other revolving balances being at or near the credit limits.  With credit scores having a huge impact on mortgage rates and terms, I decided to share some of the information on www.myfico.com regarding credit scores and outstanding balances.

Credit balances make up 30% of your credit score.  This is next highest only to your payment history.  It is a good idea to keep your balances under 50% of your available credit on any given card.  If you can keep your balances even lower(30% or lower), try to do so.  If you are having trouble reducing your credit balance to limit ratio, you can always ask your creditor to increase your credit limit.  Ask in your request that they do so based on your payment history, rather than doing a new credit inquiry.  If you pay off a credit card, do not close it but rather keep a minimal balance to show activity with a low balance.

  It is always a good idea to obtain a free copy of your credit report annually as well in order to check for errors.  Good luck!

Michael Byrne
www.mortgageprosforum.com
www.refi-fhasecure.com