Check Your Score Before You Wreck Your Score!

Hey, Nick here!

The saying, “Money talks,” doesn’t always ring true. You could be Donald Trump and not be able to get a mortgage if your credit rating is in the (diamond studded) toilet. Your salary isn’t the only factor when trying to get financing for your new McMansion. Your FICO score, AKA credit rating, plays a major part in that as well. If your credit is less than stellar, then you are going to want to read my tips on how to get those numbers up.

Trying to understand how credit ratings work will give you a headache bigger than your credit card debt. Basically, anything above 700 is considered excellent and is extremely attractive when applying for a mortgage. It’s definitely a score that you would want to bring home to mom. Only a select few are in that range so don’t worry, 620 – 699 is considered just fine as well. Whew! A score lower than 620 is going to be a tough. So, my best advice for you in that case would be to increase your score slowly but surely. 40% of your score is derived from your payment history, so make sure that you at least get all your minimum payments in on time. It also couldn’t hurt to sacrifice a latte or two a week and put a few extra $$$ towards your payments every month. If you happen to miss a payment it only takes 30 days for it to show up on your credit report, so don’t go getting other credit cards to help boost your score until you pay off the old ones. Focus on past debts that you owe first, because those can linger on your credit report for upwards of 7 years. YIKES! Don’t throw your credit cards out the window just yet. If you do that, some passer-by may pick them up and go on a shopping spree in your honor and not pay it off. That would really bring your score down.

You’re probably thinking to yourself, “Oh no, I’ll never be able to get a mortgage!” That’s not true. If you’re reading this blog post, then you’re probably married (or soon-to-be), so if your spouse has better credit (like mine does) you can always apply for a loan with the better score. True, your buying power won’t be as high with only one salary on the books, but just like using your credit cards, it’s best to buy a home below your means.