Success Takes Time and Hard Work—Follow These 5 Steps to Stick With It to the End

Success Takes Time and Hard Work—Follow These 5 Steps to Stick With It to the End

Biggest Credit Myths, Mistakes and Misconceptions

Good credit is well worth the effort it takes to both achieve and preserve it. If you have good credit, the following tips will help you keep it that way. If you want to improve your credit, however, now is the time to get started. Give us a call. We'll review your credit and find out exactly where you stand. In the meantime, if you plan on entering into a loan transaction in the next 6 to 12 months, you simply cannot afford to make the following credit mistakes: Don't fall behind on existing accounts. This includes your mortgage and car payments. One 30-day late can cost you anywhere from 30-80 points or more depending on the other factors being reported on your credit reports. Don't pay off old collections or charge-offs during the loan process. Paying collections will decrease your credit score immediately due to the "date of last activity" becoming recent. If you want to pay off old accounts, do it through closing, and make sure that 1) you validate that the debt is yours, and 2) the creditor agrees to give you a letter of deletion. Don't close credit card accounts. If you close a credit card account, it will appear to FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure that it is an account you've opened more recently. Remember, 10% of your credit score is made up of your Mix of Credit, so it is important that you have at least 1-2 major credit cards open and in good standing. Don't max out or overcharge your credit accounts. This is the fastest way to bring about an immediate drop of 50-100 points in your credit score. Try to keep your credit card balances below 30% of the available amount on your monthly statement, and especially during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time. Don't consolidate your debt onto 1 or 2 credit cards. It seems like it would be the smart thing to do; however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above. If you want to save money on credit card interest rates, wait until after closing. Don't do anything that will cause a red flag to be raised by the scoring system. This would include adding new accounts, co-signing on a loan, or changing your name or address with the bureaus. The less activity on your reports during the loan process, the better. Don't give up. In many cases, small changes to your credit profile can yield big results that could save you thousands of dollars on your mortgage. *Note: American Pacific Mortgage Corporation is not a credit repair company; this information is for information purposes only. We are not licensed credit repair specialists or counselors.

David Parker Loan Officer CLS Financial Phone: (562) 594-6884 Cell Phone: (818) 263-7467 dave.parker@apmortgage.com 4450 Cerritos Avenue Los Alamitos, CA 90720 NMLS # 1850/1447810

© 2016 American Pacific Mortgage Corporation (NMLS 1850). All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply. Equal Housing Opportunity. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act; BRE 01215943 Our records indicate that CLS Financial may contact you by email to send you relevant and timely information. To opt-out of receiving additional promotional emails from CLS Financial, please click the link below CLS Financial David Parker 4450 Cerritos Avenue Los Alamitos, CA 90720

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I wanted to thank each and everyone of one of you for following me here on Twitter as I build my business through CLS Financial. Please feel free to send me a message if you have any questions about mortgages or current rates at dave@clsfinancial.com. Rates have significantly improved since Brexit .I also provide free Mortgage Fitness Checkups. Thank you again for following and please share this blog.

The Ins and Outs of a Credit Score

A credit score is more than just a financial “grade.” The rating represents something much more important, and could have a big impact on your wallet. Many first-time homebuyers are curious about improving credit scores, and how that will come into play when applying for a loan.

Credit bureaus like Experian, TransUnion and Equifax, crunch your personal financial data using an algorithm, or a financial model, to determine your creditworthiness. This analysis, in theory, can predict your ability, or inability, to pay your future debts. Understandably so, the information is invaluable when applying for loans. 

Unlike the suggested movies “you might like” on Netflix, this algorithm output cannot be ignored. The score is a direct reflection of your credit history, which is a financial inventory of things you’ve paid for. Credit cards, past loans, government information are all sources that make up your history. Other information includes the number of credit cards and loans you have and if you pay your bills on time. 

Your credit report is a little different. It includes personal information, including your social security number, the amount you owe and if you have been late, or delinquent, on a payment. Businesses and lending institutions want to know all about your creditworthiness and your credit score.

Credit scores are calculated by:

• Looking at your credit report
• How much money you owe
• Amount of available credit
• The length of your credit
• Repayment history

When it’s all added up, your score is an important factor in getting a loan and securing a competitive interest rate/APR. A difference of one percentage point can mean thousands of dollars of interest paid over the life of a loan. It’s a big deal, and luckily for you, you can do something about your credit score.

 But first, let’s see how credit scores stack up. 

What’s a Good Credit Score?

Excellent credit is generally a score 720 and above; good credit is 660 to 719; fair credit is 620 to 659 and anything 619 and below is considered poor standing. Let’s break it down even more. 

Those with the best credit score, 800 and above, are said to be 1-percenters. (Remember, credit scores do not take into account your income, or even employment history). That is, of those with this exceptional FICO score, only 1 percent are likely to delinquent on their bills, according to Experian. They are also likely to experience an easy path to a loan with excellent terms.

• A very good score is between 740-799, and is above the average U.S. consumer score. It will also likely lead to a better-than-average interest rate on a loan.
• A good score is between 670-739, which represents the median credit score in the U.S. By these terms, you’re considered an acceptable borrower.
• A subprime borrower will fall between scores of 580 and 669. At this range, it may be difficult to get a loan (However there are loans still available). And those who do will generally pay a slightly higher interest rate.
• A poor score of 579 or below is unlikely to get you a loan.
• A FICO score is a standard or a particular brand of credit score.

Understanding how your score is broken down will help you improve your score over time. 

• The biggest factor is payment history. This accounts for 35 percent of your score. 
• The next biggest component is the amount you owe on your credit (30 percent). 
• The credit history length (15 percent), new credit (10 percent) and types of credit used (10 percent) are the other three variables that enter the equation. 

Tips to Boost Your Credit Score

Now, here are some actual things you can do to boost your score.

1. Sometimes your credit history may be inaccurate and can thus lead to an unfair score. You can dispute these claims with the major credit bureaus. Be sure to have your bank statements and receipts handy to show as proof. You can also dispute errors online.
2. Make sure your report matches up with reality. Sometime companies may be slow to update the amount you have paid off or a recent bump to your credit limit. Both omissions could impact your score in a negative way.
3. Do not close out a card. A sudden drop to your credit-spending power does not look good to the bureaus. You can keep it active by perhaps using it to pay a monthly utility bill.
4. Pay your bills on time. Obviously, no one wants to be late on credit repayments. But since it makes up for 35 percent of your score, we cannot stress enough the importance of paying on time.
5. Talk it out. You can write a letter of good-will and ask companies to remove or make adjustments on your credit history. Be sure to take responsibility for the delinquency and explain your circumstances that led to your inability to pay. You may have lost a job or your family income went from two to one. Try to tell a personal story. For those with extra cash, be sure to let them know that you can pay a large lump sum. 
   

Note: American Pacific Mortgage Corporation is not a credit repair company; this information is for information purposes only. We are not licensed credit repair specialists or counselors. 

Happy 4th of July

I'm proud to be an American, and I'm equally proud to be your trusted mortgage professional. I'd like to wish you a joyous July 4th holiday and extend my continued assistance to you in the future. 

Much like our freedom adds to the glory of our country, your referrals add to the success of my business. If you know of anyone who could use my services, please let me know.

Happy Fourth of July!

Five Ways to Raise Your Credit Score and Fast

If you want to improve your credit score quickly, the time to start is now. Here are some great strategies you can utilize right away to give your score a quick boost. And in addition I have some great resources that can help you understand the do's and don’ts of credit. Here’s one right here Prime National Credit Repair. They are great at helping people get back on track.

Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) on time, and as agreed, shows responsibility and will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick and significant jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card on your monthly statements. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Canceling those cards may inadvertently undo all of your hard work.

 Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances

Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don't report your information to all three credit companies - this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you're in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.

 Protect Your Interests: Your credit score is calculated based solely on the information available to the credit bureaus. If you have a Home Equity Line of Credit (HELOC), make sure it's listed as a mortgage or an installment account on your credit reports and not as a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported as included in the bankruptcy with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it's important to monitor your credit every four to six months.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. You can also get a free copy of your credit report here Annual Credit Report once a year.  

For the fastest results, visit the appropriate credit bureau's website and file a dispute online. Here isTrans Union. If supporting documents are necessary, you have to file your dispute by mail.

 You can also follow me on Twitter@dpdoeslns