Article by JoAnn Young, Real Estate Agent, Young and Young Properties
There were a few obstacles at the initial overview of her credentials but nothing major until we retrieved her credit score. She had four newer accounts having just started to acquire credit. Three of the accounts were revolving accounts - credit cards with very small credit limits. Two of the accounts were at their maximum use of the credit limit and one was at nearly 60% used. Her score was 39 points short of the minimum credit score requirement for lending. Since her credit is so new (within the 12 months) and her revolving accounts almost maxed, her credit score has already taken a blow. I've written an article in the past Credit Scoring Today. 30% of your credit score is how you use your credit. The ratio of credit line versus the amount you have used on the line.
I really did not have any options for her but I contacted my sales representative at my favorite lender's office. We went over several loan programs and each was eliminated. He then recommended a rescore product that is offered by my credit reporting company since she was close on her score and her credit was so new and she had no derogatory credit.
I contacted my credit vendor and we were able to have the service added on to my account. I can now run a simulator for "what if" scenarios.
I gave the simulator two scenarios:
1. to pay down the balances to 25% of the credit limit and
2. to pay off the accounts completely.
I could not believe the results! One of the credit scores shot up 97 points just by paying off the small balance and 69 points if she pays down the balance of the credit card to 25% of the limit! WOW!
The next step is to actually pay off or pay down those three accounts and then request the rescore from the credit vendor.
Next stop, the loan approval! Then....HOUSE SHOPPING!
If you would also like to find out more about raising your credit score, buying or refinancing a home, Call or email me, JoAnn Young, 321-243-4917.
