2019 Idaho Real Estate Blog

Five Factors Of Credit Scoring -- How Much You Owe (cont.) Main Boise Home Loans
We will now continue the discussion of how you can positively affect your credit score within the "How Much You Owe" portion (30%) of your credit score.

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Dear BuildIdaho.com reader:

As I mentioned in my last BLOG entry regarding debt ratio, there are lots of way to easily and permanently raise the debt ratio portion of your credit score. Let's continue...

DON'T CLOSE CREDIT CARDS EVER

Obviously, this may not be possible if you are a victim of ID Theft or fraud, or are going through a divorce. However, many consumers make the mistake of closing that old credit card that they just don't use any more. Don’t' do this! When you close an old account, you not only lose points in the Debt Ratio factor (30%) but also in the Credit History factor (15%). When you combine these factors, you are talking about almost 1/2 of your credit score!

DON'T OPEN ACCOUNTS YOU DON'T NEED

Just don't do this. My arch enemy as a mortgage professional is the "open an account today and save 15% off your purchase" offer. Not only do consumers receive a hard inquiry and get penalized for doing this, but I have had customers lose mortgage pre-approvals because a consumer's debt ratio has shot up by taking out new credit during the loan process. I always ask my customers to Opt Out from receiving marketing offers for new credit. By doing this, you also remove the chance of receiving an unauthorized hard inquiry into your credit profile. You can opt out by phone or internet:

1-888-5-OPTOUT

http://www.optoutprescreen.com

DON'T GO OVER YOUR CREDIT LIMIT EVER

If you go over your credit limit by even $1, or if you incur a revolving finance charge that takes you over your limit, you will lose 100 or more points immediately. The scoring model things you cannot hold to an agreement with a creditor and are getting overextended.

If you are interested in talking more about this post or a specific credit scoring issue you have or know about, feel free to call me at (208) 880-0316, or email me at [email protected] You can also visit my website at http://www.ericsloans.com.

Regards,


Eric Leigh, Mortgage Consultant
2965 E. Tarpon Drive, Ste. 150
Meridian, ID 83642
(208) 880-0316
http://www.ericsloans.com
[email protected]
 
Posted by Eric Leigh at 6/25/2009 2:15:00 PM
Comments (1)
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Took me time to read all the comments, but I enjoyed the article. Very helpful article! Makes total sense. It's always nice when you can not only be informed, but also entertained! I'm sure you had fun writing this article.
Posted by on 9/2/2009 9:49 PM
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Michelle Penick, Build Idaho Client Real Estate Services

Michelle Penick

Client Care Team
208.629.0217 | [email protected]

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