Emiley, Home Buyer in San Diego, CA

What are ways to increase credit scores? We are >680 but believe that's not competitive enough to get a great interest rate.

Asked by Emiley, San Diego, CA Tue Apr 2, 2013

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lendersnetwo…, Agent, Plano, TX
Sun Sep 1, 2013
Your rate with a 680 will be the same as someone with a 720, you will just have higher closing costs due to the fact it costs more points to get you the same rate.
4 votes
Royce Kemp, Agent, San Diego, CA
Tue Apr 2, 2013
Best tip, and I use this personally: create an account at CreditKarma.com

This will let you know where you stand, and you can simulate different things to see how it will affect your score.

Besides the obvious of making your payments on time, make sure your debt utilization is below 20%!
You want a decent amount of credit. If you only have one Credit Card, you don't have a lot of credit available to you. The sweet spot seems to be around 4 cards! Try to keep your cards, even if you don't use them, keep them open. You want to show that you hang on to your accounts (closing out accounts often can actually hurt you). Also, ask all your existing credit card companies to increase your credit limit. The higher your limit, the better your score b/c they assume the CC company has evaluated you favorably to extend your credit. Also having a good mix of credit helps, like Student Loans/Car Loans etc, but you don't want to make any large purchases just before buying a home!

I have lots of other great advice that I share with my clients, consider choosing a REALTOR who can help you get these answers!
3 votes
asirois, , San Diego, CA
Tue Apr 2, 2013
Be careful with disputes - disputed tradelines can invalidate a DU automated underwriting approval on Conventional loans. You may get a higher score, but a lender cannot issue full final approval with an invalidated automated approval. Often they will require the disputed accounts to be cleared and a new score issued. This causes time delays, additional work and stress.
1 vote
asirois, , San Diego, CA
Tue Apr 2, 2013
Each person is different - but look at the credit score disclosure and it will give you 4 reasons why you do not have a higher score. By addressing these 4 issues, you can improve your score. I typically see the biggest issue for people with otherwise good credit is the balance on revolving credit cards at or over their limit. Your revolving balances should not be more than 50% of the limit to have the best scores, also pay off and don't use department store cards. Having balances on those type of cards bring your scores down...yes, even if they are zero interest. Paying a credit repair company is usually unnecessary as most mortgage lenders will review your credit report for you at no cost, and make recommendations. Also - for my clients we can run a "Rapid Rescore" at no cost to correct any errors or update for any changes. Feel free to contact us to schedule an appointment for a no-cost review of what you can do to improve your score. We can meet in person at our office, if you'd prefer.
Web Reference:  http://www.guildMESAsd.com
1 vote
Maureen Mart…, Mortgage Broker Or Lender, San Diego, CA
Tue Apr 2, 2013
One tip that I got from one of my credit repair specialists is to get your revolving credit card balances at 5% of the limit of the cards. I always used to tell clients 29% of the balance, which I've seen work really well in the past, but when one of my clients did it at 5%, the scores shot up immediately! After the balances are paid down you can either wait for them to organically hit the bureaus, or your lender can do what is called a rapid rescore to get the scores up for you. The rapid rescore can get costly so if you don't yet have an open escrow, I would suggest to do it organically and just pull your credit next month. :) Best of luck!
1 vote
Emiley~ I reccommend getting started with a good lender who can review your credit report and advise accordingly. Maureen comes highly reccommended as a Lender. She has a sharp eye for stategy to get your score at it's best once she reviews the report..
Flag Tue Apr 2, 2013
Roy Bush, Both Buyer And Seller, Phoenix, AZ
Sun Aug 4, 2013
CFS Mortgage, http://www.cfsflex.com, has a flexible loan program. They allow a mortgage after a foreclosure, short sale, or chapter 7 bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes
Cindy Davis, Agent, San Diego, CA
Tue Apr 2, 2013
You're right - it's not! The best way I know to increase your credit score is to pay down your revolving charge cards to less than one half of your allotted credit limit or less.

Pay off any outstanding debts, and pay down credit cards...it's not magic...it's just the diligent work of paying things off!

Good luck.
0 votes
Jennifer Fur…, , San Diego, CA
Tue Apr 2, 2013
There are a lot of factors when it comes to your credit score, I would definitely look into your debt to income ratio, that will effect you a lot.

A key indicator of your creditworthiness is your capacity to handle a certain level of debt. Lenders will review your current debt payments-to-income ratio. Based upon this, they will determine how much credit they will extend and at what interest rate. Lenders will be more reluctant to lend to individuals who are near the top of the acceptable range of 20 percent.

Use the debt payments-to-income ratio formula: Monthly debt payments/Monthly net income.
0 votes
allan erps,A…, Agent, Pearl River, NY
Tue Apr 2, 2013
Think you will get a very good rate but maybe an 1/8 to 1/4 below 740 FICO score. At these historic Mortgage rates you should still take advantage now!
0 votes
Cory La Scala, Agent, San Diego, CA
Tue Apr 2, 2013
Another great question, Emiley, one that many buyers don't want to visit at all!

You've received some good answers. I have some great credit information I've put together for my buyers. It explains your credit score and what goes into it, how to improve it, and how to dispute any mistakes along with a sample dispute letter. There's information on the expiration of different types of credit issues.

When you do start the loan pre-approval process, you'll want to contact all the lenders within a 30-day period, or you'll start getting dinged for each inquiry. The information I have explains this.

Let me know if you'd like me to send that to you, just call or email me off forum.

0 votes
Nathan Plount, Agent, Carlsbad, CA
Tue Apr 2, 2013
Go to the websites of each of the 3 major credit companies individually. There you will find a link or form for disputes. Order your 3 score credit report (which you can do for free once a year). Look for any discrepancies. Dispute those discrepancies! If the creditor is unable to show proof as to why they have dinged your credit then that discrepancy is taken off your credit report. Usually this only takes about 30 days or less. Your score can increase by quite a bit. Then, if your already working with a lender already, order a rapid rescore.
This is the same stuff you pay one if those credit clean up companies to do...except you do it yourself.
0 votes
Wayne L. Bro…, , San Diego, CA
Tue Apr 2, 2013

I saw I believe your other post about home buying, but you already had a sufficient number of responses for me to post an answer.

Since I don't have access to your report, I can only answer in generalities.

First, your credit score begins to get lower on your revolving credit cards once you Pass 1/3 of your limit. If you are very near your limits, the bureaus will deduct even more points from your scores.

Next, if you have any late payments, collections, charge-offs, or Bankruptcy these will certainly affect your score as well.

Inquiries against your credit also lower your score. Usually about 10 points for each inquiry.

Exception: If you are shopping for a mortgage, and more than one lender pulls your credit, it is Only counted against you once as long as the credit pull is done in a 30 day time frame.

Lastly, if there is anything on your credit that is incorrect, you should address this immediately in writing. The downside however is that it usually takes at least up to 60 days to correct. Once you have chosen a lender, he or she can also help you in this last area. If you can obtain letters from the creditors in cases where there was an error reported on your account, your lender can do what they call a Rapid Rescore. This can be accomplished in a week or so. Additionally, if you are able to pay down any credit cards that are over 1/3 of your limits, with written proof of your current balance from your lender on their letterhead, your lender can also submit this under Rapid Rescore and improve your credit as well.

Hope this helps.

If you need any assistance, or would like a free consultation regarding a new loan, please contact me through my profile with my contact information.

Best of Luck.

Wayne L. Brown
Mortgage Banker
Security National Mortgage Company
NMLS # 343946
Company NMLS # 3116
0 votes
Lance King, Agent, San Francisco, CA
Tue Apr 2, 2013
These days you usually need a score of 740+ for the better rates. Talk with a reputable lender in your area to get some ideas on how to raise your score.
0 votes
Daniel Lehman, , San Diego County, CA
Tue Apr 2, 2013
Depends on the REASON for the lower credit. It could be inquiries, it could be derogatory accounts, and very commonly a VERY simple way to increase it would be to decrease your "debt to high limit". In other words, if you have a 10K limit on a credit card, you want to stay under 3,000 dollars, or 30% typically.

I dont charge for credit repair, but do a lot of credit repair for my clients to get them better rates/terms, etc when applicable. I also have a system where we can basically say "IF we were to do THIS, what would be the outcome", OR, we could say "We need 50 points. What do we have to do to get 50 points" and it will tell you exactly what you could do to increase your score.

If you want, drop me a line and I can take care of you.

Daniel Lehman
0 votes
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