Know the Score: Three Steps to Better Credit

If you are looking to buy, invest in, or obtain a better rate on your current mortgage now or in the coming months, your credit is going to play a more significant role in today’s tight-fisted credit environment than it has in the past. It’s that simple. Would-be borrowers need to address any and all credit issues now to avoid having to pay for it later.

But, here’s the kicker: a great number of all credit reports contain errors of some kind. The credit reports contain mistakes so egregious that applicants could actually be denied credit! Don’t let this happen to you. Read more

Credit: Biggest 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 are looking 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 30-75 points.
• 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/BEACON 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.
• 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 their available limit at all times 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 do it alone. If you feel that the credit challenges you’re facing are too much, or you don’t have enough time to do the work necessary to improve your own credit, don’t lose hope and give up.

Written by Danuta Levitzki. Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
For current interest rates or to get more information on mortgage financing feel free to visit her website or call direct at 1-800-605-6154.

Credit Scoring: Dealing with Challenges

Typically, a person with a low credit score is in this position because they lack structure in his or her life. There are, of course, cases where unplanned health or employment complications are to blame, but for the most part, these are individuals who lack the discipline to pay their bills on time or curb their spending.

This is your opportunity to be the “knight in shining armor” that provides them with a simple roadmap to get back on track. Let’s take a look at some examples that can help to quickly improve less-than-perfect credit scores for the potential homebuyer:

Let’s say we have a borrower with a credit score of 664. She has a concentration of credit card debt on one card; let’s say $17,000 on a card with a $20,000 limit. At the same time, she has four or five additional credit cards, all with a zero balance. I would advise the borrower to distribute the debt over a number of her cards. Remember, a borrower’s credit to debt ratio represents 30% of his or her overall score. By simply changing the ratio of available credit to debt, the borrower in this example could possibly increase her credit score to something closer to 700, saving thousands of dollars on her mortgage.

Another thing to take into consideration Continue reading Credit Scoring >>

Buying with zero cash down. Is it really possible?

The first time you see the ad Scotia Bank 100% Mortgage Program, you may ask yourself…What’s the catch?
Perhaps Scotia Bank still requires the 20% down, but gives you the option of a line of credit?
OR…they really offer to finance you 100% BUT with rates a lot higher than the regular mortgages?

Something to ponder about.

The real answer is none of the above and it was confirmed this afternoon, after speaking with a mortgage specialist Nadine Emony from the Scotia Bank who informed me that the only thing needed in order to be eligible for a 100% Mortgage is to have very-good credit.

Not bad, uh?

In addition to that, you need to:

· Have a min of 2 years of good credit history with one of the major credit cards: Visa and/or Mastercard.
· Have a steady job.

There probably are a few more requirements to be eligible for a 100% mortgage, but for the most part, these are the two most important factors.

Information and link was kindly provided by Mortgage Specialist Nadine Emony. Visit her page for more details.