So this “ask a broker” thing has gotten off to a good start, thank you! The winner was able to see the Warriors beat the Spurs and watched in horror as our superstar and savior Steph Curry got hurt, we need Durant to step up!...but I digress so let’s get back to the issue at hand, Credit! The overwhelming questions came in regards to fixing credit and bettering your credit. By now credit karma has become a household name; give their marketing department a prize! What credit Karma and all other credit websites do is they give you a consumer credit score and not a FICO score. If you’re reading this article I need to believe you’re somewhat interested in home loan financing so checking your credit on line and your phone app daily for a credit score is of little value. FICO scores is what all mortgage lenders use to decide how risky you are. That 780 credit score you’ve been bragging about and getting on line mortgage quotes with may actually be a 679 FICO score, rates are not the same at a 679 as they are at a 780. Ouch! Payment just went up and now you might not even qualify for the house you went out and promised your kids. As a parent I can tell you, don’t under any circumstances promise your kids something you can’t deliver. So before you make that promise come see me and I will guide you on the steps to get you to a 740. Your credit is your credit and by law, for the most part, it has to be reported the way it is. I tell you this because of all the credit fixing companies out there. For a sizeable upfront fee they will remove old collections that are not significant to your fico score and they will remove some newer collections and those will come back usually in 90 days once the collection company gets their act together and verifies that the collection was indeed yours. More advice (it’s my parental instincts taking over) beware of services that you pay for upfront, never a good idea.
I don’t want to be one of those guys that gives you a droplet of information and then keeps you in the dark until you call me. So here are a few things you can do to up your credit. Pay down credit card balances to about 38% of their credit limit. Paying down a car loan doesn’t help much. Use your credit! If you think the current bad credit is going to magically disappear, it’s not! Start using credit and don’t be late anymore! (I’ve got 4 kids). Leave a balance on your credit card monthly. I know you anti interest paying protestors don’t like this but it’s necessary for FICO growth. Don’t focus on old collections that have not reported in over 5 years. Believe it or not those do go away after 7 years and they have only a small impact on your FICO. Finally, if you do have an account with a long excellent payment history but one 30 day late payment (it happens); don’t be afraid to call and ask for forgiveness (along with a good story) as a courtesy often times they will remove the one late payment. Please keep sending in your broker questions you might be the next one watching the Warriors live. If another player gets hurt on the next giveaway I’m going to stop giving Warrior tickets and start giving Ella’s at the Airport gift certificates. Go Warriors!