Well, it’s that time again. I usually blog with news that you can use in the industry, guideline updates and general knowledge updates, however today I have some bad news coming down the pipe.
We at Plaza Loans are catching wind that many banks are going to be raising the minimum credit score for FHA loans from 620 to 640. I know I know…I’m sorry!
Plaza Loans has one where house lender that has already made the change however we still have the 620 score available, though if you have clients that have lower credit scores…NOW IS THE TIME TO RAISE THEIR SCORES TO BE SAFE!! Remember, banks fall in line with each other for protection…once the large banks make this change (B of A, Wells, etc) the others will follow suit.
So now the question is…how do I raise my scores? It’s very easy!
- First rule of thumb…NEVER allow your balance to available credit ratio to go over 50%. Example: Credit limit is $1300, make your maximum balance $650 and below.
- Plan for the credit you want to obtain. Make sure that when you are going to obtain credit, it is for a reason…the time for frivolity is over. Just because you CAN save 10% at Nordstrom’s by applying for a card DOESN’T mean you should!
- Never close credit cards, you don’t have to use them…just don’t close them!
- Have a good mix of credit; cars, credit cards, installment debts (furniture, jewelry etc)
- PAY YOUR BILLS ON TIME! I know; in these hard times…things happen. Remember…just because the payment is late DOES NOT MEAN it will show up on your credit. It must be 30 days late before it will report to the bureaus! So, if you must be late make sure that you get that payment to them WITH the late payment fee BEFORE it is 30 days later than the due date. Example: Due date is December 1st…it MUST be paid no later than the 30th of December! (I do not advocate this method however I am not naïve I understand things happen)
If you would like a consultation on your specific credit situation and further tips on how to raise your scores, please feel free to contact me!
Cory Polk
Loan Officer
Plaza Loans
408-754-3847 Direct
209-518-9462 Cell
408-978-2069 Fax
cory@plazaloans.com
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