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Sheena Saydam's Blog

By Sheena Saydam | Agent in District of Columbia

BEST Advice to Improve Your Credit Score

Today, while telling a police officer at Marymount University about why his nephew should attend the DREAM BIG First Time Home Buyer Seminar (Shameless plug: Arlington Central Library, Nov 3rd, 7 pm – 8 pm.), we got on the subject of credit scores. He wanted to know what kind of credit score his nephew needed to get a “good” loan. For the record, lenders take in a lot more into account than just your credit score when considering qualifying people for loans; nonetheless, your credit score is very important.

Worthwhile to note: The FHA now requires borrowers to have at least a credit score of 580 to qualify for their 3.5% down payment program. The average person’s credit score is about 693.

So, how do you maximize your score? Here’s some great advice, provided by Chris Kaucnik, Marketing Director for Home Warranty of America:

-Paying revolving credit cards down is generally more beneficial than, for example, paying down student loans, mortgage or auto loans.

-Always leave a 30% or higher gap between what you owe on the card and the card’s limit. Lenders look for this minimum gap.

-Use cards with care even if you pay off balances each month because depending upon statement dates, the lender may see big balances.

-Pay down the cards closest to their limits first for speedier credit repair. The lending bank will then see the “gap” it wants to see.

 

Read on!

Comments

By Jennifer Beeston,  Tue Oct 26 2010, 18:06
Great advice for credit scores. Credit is now more important than ever. Regarding FHA, most lenders have changed their FHA guidelines to a minimum of 640 credit scores. There are a few doing 620 but 580 days are gone for every investor I know,
By Sheena Saydam,  Tue Oct 26 2010, 18:20
Thanks for the comment! Yes, I haven't seen anyone see success with a 580 -- maybe with a really hefty down-payment!

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