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7 Tips to Improve your Credit Report

As the spring home buying season gathers momentum, you'll want to make sure you're ahead of your competition. The competition is other Buyers who want the same home you do. Anything you can do to give yourself an edge is a worthwhile effort, and making sure your credit is up to par is a great first step. Here are some ways to make sure your credit history doesn't prevent you from getting a mortgage for the home of your dreams.

Tip 1: Close charge accounts or lines of credit you don't use. Unused accounts or lines of credit are red flags of possible future spending. If you don't need the accounts, get rid of them. The AVAILABILITY of credit is something that can pull your credit score down. Getting rid of accounts will push your credit score upward.

Tip 2: Don't close your unused accounts all at once! If you do, lenders may think you are in financial trouble. Close no more than 3 at one time. Wait about a month, then close another 3 (if you have that many). Continue this pattern until all the accounts you want closed are done.

Tip 3: Don't max out your credit lines. In fact, try not to use more than 60% to 75% of your total credit capacity on EACH of your cards. If you have a MasterCard with a maximum credit line of $10,000 and a balance of $9,000 on it, you would be better served to move $3000 of it to another account. This way you'll only be at 60% of your available credit line on this account. This strategy will move your score upward.

[Note: Move your balances back to the lower-rate cards AFTER you have your mortgage!]

Tip 4: Frequent credit inquiries lower your credit score. As a general rule, you shouldn't apply for credit to more than four or five places in a six-month period. This will minimize the effect of inquiries. Be mindful NOT to give your social security number to anyone who might pull your credit report.

Tip 5: Pay all your bills on time. Often easier said than done. You can automate your payments through your bank or any reputable on-line service. This way you won't forget to make payments. Just make sure you have enough funds in your account(s) to cover these automatic withdrawals.

Tip 6: If you're late with a payment, ask the creditor to waive the late fee. This way, it won't show up on your credit report. I have experienced this personally. It works as long as you don't repeat this behavior. Most creditors are understanding, and the person you speak with will usually have the authority to accommodate you.

Tip 7: Check your credit report. Very often, these reports contain errors. Check your credit report at least once a year, and DEFINITELY do it a few months before applying for a mortgage loan. That way, you have time to correct erroneous entries or improve your credit record before you apply for the loan. You can order a copy of your credit report from any of the three major credit bureaus:
Equifax, (800) 685-1111,
Experian, (888) 397-3742,
TransUnion, (800) 888-4213,

Credit improvement is a major part of your ability to qualify for any mortgage financing. From this starting place, your mortgage professional can help you determine the program that is most suited to your particular situation and help you fully explore your options. Armed with this knowledge, you'll be in prime position to shop confidently for your new home.

Mark Atkinson is a Mortgage Professional with A&M Mortgage Solutions, a resource for those buying, selling or refinancing real estate. He can be reached by phone at (860) 350-8400. E-mail at


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