TODAY’S MONEY LENDING IS GAUGED BY A CONSUMER’S CREDIT SCORE. THE KEY TO IMPROVING YOUR CREDIT SCORE IS UNDERSTANDING HOW CREDIT SCORES AND RATINGS WORK. REFER TO THE VIDEO BELOW TO GET STARTED ON IMPROVING YOUR CREDIT SCORE TODAY!” 

-Richard Dixon
Mortgancial Planner

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CREDIT TIPS

Credit scores are measured by three credit agencies: TRANS UNION, EQUIFAX, and EXPERIAN.

Credit agencies use consumer’s pay history of open accounts, one of them is known as revolving credit, to determine your credit rating. In most cases, 40% of your credit score is determined by revolving credit accounts.

The key to improving your credit score is to keep credit card balances under 30% of available credit.

Always try to address any and all collections, judgement liens, and any potential credit damaging matters before they report on your credit.
If you have zero or very little credit established, start by opening up a secured credit card at your bank or credit union. Every secured credit card is created by opening up a savings account. Your credit limit is then determined by the amount you deposit and hold as a steady balance in that savings account.

If you want to improve your credit rating and have old (over 24 months and currently not re-reporting) open collection accounts on your credit report, paying them off will not help your cause. In some cases, paying off old negative credit may negatively affect your credit score ratings!

It isn’t fair, but by paying off old negative credit you are in fact doing the right thing at the wrong time by reactivating an old negative account with a fresh new date. If you have and wish to pay off some collection accounts, please go to the CONTACT US page so I can give you some advice before doing so.

GET OUT OF OVERWHELMING CREDIT CARD DEBT

If you are only able to make the minimum payments, and it is not lowering the balances (if you are just paying interest) then you may want to: CONTACT YOUR CREDIT CARD COMPANY AND ASK THEM TO LOWER THE RATE (EVEN IF THEY HAVE TO CLOSE YOUR ACCOUNT TEMPORARILY).  This process can help you pay the principle balance(s) down sooner. I only recommend this procedure if you do not foresee personal income increases. Seek legal counsel if needed.
STOP using credit cards, unless it’s an absolute financial or medical emergency. IN THE SAME RESPECT, I DO RECOMMEND KEEPING A COUPLE OF CREDIT CARD ACCOUNTS OPEN, BUT TO NOT — USE THEM UNLESS IT’S AN ABSOLUTE EMERGENCY.  Remember, it’s always best to have a financial safety net for emergencies.
On on average, people pay 2 to 3 times more a month on unwanted credit card finance charges than towards the principle of their larger obligations (for example, their mortgage).

SOMETHING TO CHEW ON…
Say you pay $200 a month on credit card finance charges.  The next time you do something like go out to dinner and use your credit card to buy a $50 meal, keep in mind that the truth is, you now spent $250 for that moment….$50 for the meal, and $200 for that month’s finance charges.  Ultimately, you better make sure that meal was worth $250 to you!

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I work to give you the best advice for the current lending trends and give my clients the highest quality service possible.

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