5 Ways to Jumpstart Your Credit Score in 2017

Improving your credit score is usually considered a lengthy project. Many factors that contribute to a good credit score — such as payment history and age of accounts — take time to establish. And if you have no credit history or a poor credit score, your best bet for credit improvement may be to establish a long-term plan for establishing good credit habits.

But if you're thinking about applying for, say,  a mortgage in the new year or have another financing need on deck in early 2017, you may want to know how to quickly improve your credit score in 30 days or less. While no activity is guaranteed to improve your credit within a time frame that short, there are quick, simple actions you can take to try for fast results. Here are a few ways to jumpstart your credit score. 

1. Become an Authorized User

"One tried-and-true trick is to have someone with great credit add you as an authorized user to a card that they've had for a long time," says Casey Fleming, author of The Loan Guide: How to Get the Best Possible Mortgage.

Using this method, you can piggyback off someone else's good credit. Authorized users benefit from responsibly managed accounts because these accounts will be listed on the user's credit report. But both you and the account holder need to be wary – if they aren't as financially responsible as you think, or if they use their card irresponsibly, your plan can backfire and both credit scores could suffer. (Note: Authorized users can request delinquent accounts be removed from their credit reports; primary cardholders not-so-much, so be sure you're not overcharging.) 

2. Request a Credit Limit Increase

You can ask your credit card providers to increase the limits on all the cards you own. If you have a history of timely payments with your credit card provider, there's a good chance they will negotiate. By increasing your credit limits, you'll be improving your credit utilization rate, which is the amount of debt you're carrying versus your total credit limits — and is a major contributing factor to your credit score.

Note: This will only work if you don't increase your spending. If your credit card issuer raises your limit by $1,000, and you immediately start racking up charges that eat up the difference, the increased limit won't do much good. Experts recommend keeping your credit card usage at no more than 30%, with an ideal balance at 10%. (You can check your credit utilization rate by viewing two of your free credit scores on Credit.com.)

Keep in mind, too, a request for a credit limit increase could result in a hard inquiry on your credit report, which can ding your credit scores, so use this strategy carefully.

3. Pay Down Your Cards

To the point above, your credit utilization rate will also improve if you pay down your credit card balances. If you have some extra funds, consider making extra payments on your credit card rather than dropping $100 at Chili's this weekend. Doing the former can make a real difference and is a decision you're unlikely to regret.

"Paying down your credit card balances to under 30% of the limits" will net results, says Fleming.  

4. Check for Credit Report Errors 

There could be an error on your credit reports that are weighing your scores down — and, is so, its removal could quickly improve your standing. You can pull your credit reports for free each year at AnnualCreditReport.com. If something is amiss, be sure to dispute it with the credit reporting agency in question. Most credit report disputes must be resolved in 30 days; a few can take up to 45 days.

5. Ask About Rapid Rescoring

If you're applying for a mortgage, one lesser-known trick is to ask your lender about a rapid rescore. Rapid rescoring services are usually provided by mortgage lenders when applicants are on the cusp of qualifying for a better interest rate.

Rapid rescoring can to help update credit reports or fix errors quickly. If you recently paid off a debt, or have proof that a negative item on your credit report is inaccurate, you can provide that documentation to the lender. The lender will then request a rapid rescore on your behalf, and either absorb the cost or pass it on to you. You'll want to ask your lender ahead of time whether you should expect charges for the service. 

"If you are working with a mortgage company for a loan, they would handle this for you and it should not [drastically] mark up the costs," says Tal Frank, president of PhysicianLoans, a niche mortgage company. "The rescore is the quickest way to see a change in your score once balances have been paid down and repairs have been made. It can be as quick as a one- or two-day turnaround time."

7 Steps to Take Now If You Plan to Buy a House in 2017

Is 2017 the year for a new house? If so, it’s time to prepare before the spring real estate season gets underway. There are a number of steps you can take during these dreary winter months to make your house hunt more successful once the weather — and the housing market — warms up.

1. Check your credit report. The credit scores that mortgage lenders use to set terms and interest rates are calculated using information on your credit report. You can see what information banks will get by pulling your credit report from the three major bureaus: Equifax, Experian and TransUnion. If you haven’t asked for your reports in the last 12 months, then it should be free to do so at annualcreditreport.com. Comb through each report to make sure each account is yours and the details are correct. Follow each bureau’s instructions on how to fix any errors.

2. Determine your budget. Make sure you know how much you want to spend on your home. The rule of thumb is to not spend more than 30 percent of your gross income on housing expenses, including taxes and insurance. Use an online calculator like this one from Zillow to help figure out how much house you can afford.

3. Get your down payment sorted. Figure out how much you’ll be putting toward the purchase of your house and where that money is coming from. If the money for your down payment is in different accounts, consolidate the cash into one savings account at least three months before you buy a home. That way, you can avoid having to show extra documentation to your mortgage lender to track where the down payment originated from.

4. Prioritize your wants and needs. Once you know how much you can spend, figure out what home features are the most important to you and which ones you can compromise on to stay within budget. Consider location, neighborhood schools, commuting time and nearby amenities like restaurants, grocery stores and nightlife. Also, think about house features. How many bedrooms and bathrooms do you need? What about a garage? Can you deal with a cheaper fixer upper or would you rather not have to do renovations? Once you have a priority list, it’s easier to strike off a potential house that doesn’t meet your top needs or wants.

5. Pay your bills on time. Be extra vigilant about paying your bills on time in the months leading up to your home purchase. Pay down any big balances on credit cards, too, if you can sacrifice the extra cash. Avoid ballooning those balances even more. You don’t want your credit score to slip before you close on a mortgage. If your score does fall meaningfully, your mortgage lender may adjust the terms or rate of your home loan to reflect that.

6. Don’t make any other financial moves. If you’re in the market for a car, wait until after you close on your house. Similarly, avoid opening new credit cards or applying for any other credit. If a mortgage lender sees that you’re seeking other kinds of debt, the lender may consider you a riskier borrower and offer less attractive terms or rates.

7. Get a pre-approval or conditional mortgage commitment. Make yourself the most attractive buyer by having a pre-approval or conditional mortgage commitment in hand. This tells a seller that not only are you serious about buying, but that a mortgage lender is ready to provide a home loan to close on a purchase. That may be enough to help you win a bidding war.

The Credit Score Range Scale

The Credit Score Range Scale

There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in. Here are the credit score ranges used by major scoring models:

• FICO Score range: 300-850
• VantageScore 3.0 range: 300–850
• VantageScore scale (versions 1.0 and 2.0): 501–990
• Experian’s PLUS Score: 330-830
• TransUnion New Account Score 2.0: 300-850
• Equifax Credit Score: 280–850

With all of the scores listed above, the higher the number the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.

If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “super-prime.” But if you have an 840 VantageScore 2.0, it’s not as spectacular because you’re 150 points away from the highest possible score.

5 Easy Steps to Get Control of Your Finances

About half the U.S. population doesn’t have enough money to cover a $400 emergency, according to a report from the Federal Reserve. If you’re among the 47% of cash-strapped Americans or your personal finances are otherwise pinched, now’s a good time to evaluate how to manage your money. Saving is important since it can prevent you from having to take out high-cost loans to cover expenses, which can damage your bank account further. Of course, it’s not always easy to pinpoint how to save money. One of the most important steps involves taking a good, hard look at the money you have coming in versus the money you have going out so that you can establish a solid budget — and stick to it. Here are five easy steps to help you get control of your personal finances.

1. Evaluate Your Income

How much money do you have coming in? Including your paycheck is a given, but don’t forget other income: A second job, alimony, child support or any other miscellaneous cash that you might have coming in. Write it all down and add it up.

2. Calculate Your Expenses

One of the most difficult steps in establishing a budget is determining how much money you’re spending — that is, how much money is going out. First, make a list of all your fixed expenses. This should include:

• Rent
• Mortgage payments
• Car payments
• Child care expenses
• Insurance
• Utilities
• Cable
• Other subscription services

Next, include variable expenses such as food, gas, entertainment, etc. Don’t forget about miscellaneous and maintenance expenses like property taxes, car maintenance, tag renewals, birthday gifts, etc. Once you’ve added up your outgoing monthly expenses, subtract them from your income and that’ll tell you whether you’re spending more than you earn. You’ll also get a better idea of where you can cut back.

3. Trim The Fat

Now that you’ve gotten the hard part out of the way, it’s time to look at where you can cut back. If you’re spending $60 a month at the local coffee shop for your daily double mocha lattes, consider only splurging once a week and switching to coffee at home. One way to easily determine areas where you may be able to cut costs is to evaluate which expenses are actual “needs” or “wants” or “nice-to-haves.” This can add a whole new perspective to your budgeting efforts and give you the extra push you need to cut the expenses that aren’t necessarily “needs.” Other ways to scale back on your overall spending and/or design a better budget include:

• Shopping around to see if you could secure a cheaper contract with your service providers, including your cable company or cell phone provider
• Calling existing service providers to see if you qualify for a lower rate or discount
• Looking into budgeting apps that can help you monitor your monthly spending and provide alerts if you’re spending more than you should overall or in specific categories
• Paying credit card bills more than once a month to prevent balances from climbing too high
• Considering a balance-transfer credit card that offers a 0% introductory annual percentage rate to minimize the costs associated with any high-interest credit card debt you’re carrying. (Note: Most balance transfers will cost a fee, usually around 2% to 3%.)  

4. Pay Yourself

In today’s economic environment, it’s more important than ever to have a financial cushion for emergencies. Don’t forget to leave room to pay yourself. Setting aside enough money for savings or an emergency fund can make all the difference in the world when you’re blindsided with an unexpected job loss or financial emergency. Ideally, you should aim to have at least three to six months’ salary in your emergency fund, but even having $1,000 as a backup is better than no backup at all. If you’re struggling and can only afford a little each week, setting aside even $10 a week is better than nothing.

5. Stick to It

So you’ve established a solid budget and have a great plan in place — but how do you stick to it? It’ll take some dedication on your part, but the reward is well worth the effort. If you have a spouse, work together to hold each other accountable for any spending oversights. If one of you overspends, set rules that the guilty party has to contribute more to that month’s savings fund — a sort of quarter-jar method with a twist. It’s much easier to do when you’re working at it together and you can make it more of a competition to keep it interesting. If you’re single, consider creating a support group among your friends with a monetary reward for reaching your budgeting goals. Whether it’s a vacation fund or a night on the town, the extra incentive will help keep your eyes focused on the goal and make it fun in the process.

Monitor Your Credit

Keep in mind, too, that having a good credit score can also be instrumental when it comes to controlling your finances, since it ensures, should you need financing for an emergency, that you can qualify for the lowest interest rates. You can pull your credit report for free each year at AnnualCreditReport.com andview two of your credit scores, updated every 14 days, at Credit.com. If your credit looks shoddy, you can try polishing it by disputing credit report errors and/or establishing a good payment history with a new line of starter credit, like a secured credit card or credit-builder loan. You can also work to pay down existing high debts.

What’s Your Score?

What’s Your Score?

Don’t assume your score is good (or isn’t) just because you have always paid your bills on time (or haven’t.) The only way to know whether you have a good credit score is to check. You can get your credit score free every other week at Credit.com. This is a truly free credit score – no payment information is requested. In addition to the number, you’ll see a breakdown of the factors that affect your score and get recommendations for making your credit as strong as possible.

What Can I Get With A Good Credit Score?

What Can I Get With A Good Credit Score?

Some of the best credit cards — from rewards cards to 0% balance transfer offers —go to consumers with strong credit scores. You’ll find great credit cards for good credit here.

A good credit score can also get you a lower interest rate when you borrow. That means you will pay less over time. For example, if you’re buying a $300,000 house with a 30-year fixed mortgage, and you have good credit, then you could end up paying more than $90,000 less for that house over the life of the loan than if you had bad credit. So, in the end, it really pays to understand your credit scores and to make them as strong as possible.

CREDIT RESTORATION SERVICES

A credit restoration service examines and evaluates your credit report. They work out a solution by determining which items can be abolished and how. Sending dispute letters is a mode of inquiry removal that may be employed to remove unauthorized information.

Our consultations are FREE; 1.800.442.1591