Last week I had the opportunity to sit with Tracy A. Becker, Founder and President of North Shore Advisory Inc., in Elmsford, New York. Author of the book Credit Score Power, Tracy and her team have been educating consumers and businesses on credit law and solving credit problems for clients since 1990.
As a Certified FICO Professional and Expert Credit Witness, Tracy shared three things that potential home buyers can do Today to begin preparing their for a mortgage approval:
- KEEP CREDIT CARD BALANCES BELOW 10% - When it comes to revolving credit, or those credit cards that have a credit limit, try to keep balances below 10% in the months before applying for a mortgage or seeking a pre-qualification. Remember that creditors typically report at the end of the month so making timely payments prior to this time will help to ensure that payments and low balances reflect on your the credit report your lender will pull.
- DON'T OPEN NEW ACCOUNTS - Most people have heard these warnings before, but age of credit is an important factor used in calculating FICO scores, so opening new accounts - even for a car loan could lower the overall age of your credit and reduce your scores.
- ONLY NEW CREDIT? BECOME AN AUTHORIZED USER - For individuals who are rebuilding credit or beginning to establish credit, for example college students, "new credit" or newer accounts may be all that exists. In these cases, an individual might look into becoming an "authorized user" on someone else's account as a way to strengthen your credit score. It's important to note that the account should already be in good standing with good payment history - late payments will affect an "authorized user" negatively as well., and the account should be 10-20 years old for the maximum positive impact. American Express cards are typically not the best cards on which to become an "authorized user" because unlike other cards they begin reporting to the bureaus from the date the authorized user was added as opposed to the date the account was opened; therefore, defeating the purpose of acquiring "aged" credit accounts for the authorized user.
Please Note: This article is provided for illustrative purposes only. It is not an offer or commitment to lend money, and it is not an advertisement for a specific mortgage or a specific interest rate. Contact me to run the numbers for your situation.
How Can I Help You?
As a mortgage loan officer with Jersey Mortgage Company, I can assist borrowers in New Jersey, Connecticut, Florida and Pennsylvania with getting pre-qualified for a home loan.
By offering information and educating clients on the mortgage loan process and servicing each borrower's individual needs, and partnering with Realtors to create a seamless transaction, I am able to exceed expectations and ensure that deals are closed on time!