By settling or eliminating some debts, you can improve debt ratio and increase your buying cost range. Have you made any payments that have been over 21 days late? So it’s important to not miss a payment or be late.
Do you know what a credit rating is? Furthermore, do you know what your own personal credit score is? Most people don’t think they need to worry about it. They do. Even if you don’t ever borrow money you need to be concerned. Let’s say you need to buy a new car, and like most of us, cannot pay cash for it. You will need a car loan. At some point in your life, you will probably want to buy a home. You will probably need a mortgage! The most important factor the lender considers is your credit history and credit score. This wil factor into the interest rate offered to you. You need to understand this important part of your financial life in order to manage it to work in your favor. If you ignore it, it will probably work against you.

Your payment history is the largest portion of your score at 35%. This means that it is vital for you to make at least the minimum payments, on-time, every time. A potential lender wants to see that you will hold your end of the bargain in paying back the loan. A clean payment history is one way to show this, even if it is not completely paid-off. If you have been late on a few payments, start making them on-time and you will see a steady increase in your score.

This ratio has several implications. First, the value of the house you can shop for cannot exceed a certain amount. Second, if you have a high debt load, it will limit your price range. Further, if you have an extremely high debt load, your debt ratio will not support any kind of price on a house. Since we are talking about is a personal loan revolving or installment, let’s see how relates to it. In other words, you’ll be denied no matter how good your credit if you have too much debt. This is a personal loan revolving or installment the power of the debt ratio.

Should you need to know how to improve your credit score because it’s in bad shape due to blemishes, the road will also take some time to traverse. The truth is building and/or repairing credit takes time. Patience is absolutely key in learning how to improve your credit score.

And remember, you don’t need to carry a balance on a credit card to have a good credit score. Paying your bill off in full is the best way to keep your finances in shape and build your credit at the same time.

2, Another trick to raising your credit score would be to pay down any current revolving balances you may have on credit cards. The formula for calculating your credit score looks at your available credit limit compared to how much of it you have used. If you are very close to the max, this will lower your credit score and bringing down this balance will help to improve your score by a few points.

2) Documentation Type (Doc Type) – You should know what documentation you are prepared to provide. This distinction is the first thing a loan officer is going to determine when filling out your application and BEFORE he gives you a rate or closing cost. Lenders require that you PROVE: income, assets, employment, length of self employment, reserve assets, housing/ rental history, proof of insurance, collections are paid. Be prepared to show proof of anything that you dispute on your bureau with either a letter from the reporting party or undisputable proof that you are right. If you are unable to prove these things you may still get the loan….but the price is going up.

You’ll want to screen your card issuer carefully because there are a lot of bad guys in this particular niche of the credit world. Some charge outrageous application or annual fees and really high interest rates.

The longer the credit history the better. Long credit history paid as agreed has a positive impact on your credit score. So don’t close accounts, especially if you’ve had them a long time, that is a negative impact on credit score.

This material is, by no means, the whole picture when trying to price a mortgage. However if you know the answers to these questions before you go you will be a better informed customer, know what questions to ask and as we said in the beginning. “The best informed customers always seem to get the best deal”.