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Credit Improvement (Loan Officer in California)

Tips for Credit Improvement and Repair (Real Estate Broker in Northridge, CA)

Probably the most obvious and also the most important is always pay on time. Keep in mind that once you are more than 30 days late on a credit account, there will be a derogatory on the credit report.
Have a variety of credit types extended to you. For example, credit cards, car loan, student loan, mortgage loan, etc. These are all different types of loans as seen by the credit bureau.
Since length of credit files helps your score, keep you oldest accounts open with a zero balance. Do not close these accounts because it will drop your score.
Don't max out your credit lines. Keep your credit card balances at less than 30% of your credit limit. After you have been paying on time for 6 months, you can request a credit limit increase. Hopefully they will give you an increase without running your credit.
There is a common misconception that paying off collection accounts will help your score, however this is not necessarily true. A collection will show "paid collection" and will still have a negative effect on the credit score. You will get more bang for your buck by saving or paying down revolving balances.

When working with my clients, I help them prepare for the buying process. Wheather just getting starting to build credit or many derogatory items which need attention, I will help with the process. I understand that it takes sometimes over a year to buy a house and will help each step of the way.

Posted by Jason Hector on 03/18/2008 07:55 PM

Comments (6)

credit repair, fico score, credit improvement, first time home buyer, debt, credit cards

This post has been included in California Information

6 Comments on Credit Improvement (Loan Officer in California)

When a buyer is going FHA or VA and have old charge offs or collections, it will help their credit score and the loan approval process if those old debts are paid off at loan closing.

If you have a buyer with no credit score and they have time to build a score, encourage them to open a 'Secured Credit Card' and a Credit Union or other bank that reports to all 3 credit bureaus. Our local banks will allow low or poor credit score borrowers to buy a Certificate of Deposit and take a small loan against it to build back their credit score.

Hope this helps.

03/18/2008 08:04 PM

by Molly Lionberger (First Bank and Trust of Mississippi)

I have tried to get people to open secured credit cards and they don't put forth the effort.

03/18/2008 08:19 PM

by John Walters (Specialized Real Estate)

Molly,

Two great points you bring up. Thanks, Jason

03/18/2008 08:20 PM

by Jason Hector (U.S. Market Finance Center)

John,

Thanks for your comment on my blog. I worked in banking for some time and the people who get secured cards are usually new to the country or have some money sitting in the bank they can use. There are also cards for bad credit I have seen on www.bankrate.com . They all have an annual fee but don't need to be secured.

03/18/2008 08:26 PM

by Jason Hector (U.S. Market Finance Center)

Your post is very nice since it gives 5 simple yet really important bullets for people to follow, most people who get into a bad credit situation don't know how to get out. your points give a clear road upon which to rebuild bad credit.

Thanks for putting something out there thats clear and to the point.

03/18/2008 08:31 PM

by Christopher Bonta,Realtor/ Integrity and Honesty (The Masiello Group)

Hi Jason,

Welcome to activerain. Go to http://www.colonialpacificfinancial.com/ to see our commercial loan products. Colonial Pacific is a direct commercial lender and lend in all 50 states. Call me if you have any questions or want to run a scenario by me. Thank you for your consideration.

03/18/2008 09:47 PM

by Glenn Prieto-Commercial Real Estate Lender (Colonial Pacific Financial)

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