by There are a myriad of ways to rapidly increase your credit score, before, during, or after the loan modification process. It is very much important to have a high credit score; if your credit score is low, you may not be approved for financing on a home, car, or credit card. Additionally, the interest rates that you qualify at will be much higher if you have a low credit score that if you had a high one.
Having a higher credit score can save you thousands of dollars per year in just interest payments alone. If your credit score decreases, your creditors may lower the balance limits on your credit cards, which can make life difficult. To help avoid credit related problems, and to keep your credit in the best standing possible, here are a couple of simply, handy, and free tips to help you!
The very first strategy to increase your credit score is to pay down the amount that you owe on your credit cards. Typically, lenders prefer to have low balance in proportion to the amount of the “high credit limit”, or the maximum card balance that the borrower is approved for. Ideally, it is best to not owe more than 30% of the high credit limit. Always make sure that you are below the high balance limit, and not approaching the high balance limits. If you have a number of credit cards, focus on the cards that have lower balances and are closer to their limits.
Make sure that you do not completely pay off your credit card debt each month, as this will show no balance and no debt that you are making payments on. This may seem counterintuitive, however, your credit score is a rating of how well you can manage making monthly payments on debt; there must be debt there for you to pay on in order for it to reflect on your credit, which brings us to our next tip.
Our second credit score boosting strategy is to make sure that you always have at least three (3) open trade-lines. A trade-line is any debt that shows up on your credit report. There are three types of trade-lines: mortgage, revolving, and installment. Mortgage trade-lines of course would be your mortgage(s), revolving debt is credit card debt, and installment debt is pretty much everything else, such as car loans and personal loans.
A third strategy is to make sure that your credit report is accurate. Make sure you get a copy of your credit report at least once every three months, and verify all of the debt listed on your credit report is yours. If you feel that an error has been made and you do not owe a certain debt, or if your high credit limits are being reported as lower than they actually are, open a dispute with the three credit bureaus: Equifax, Experian, and TransUnion by visiting their respective websites.
The fourth strategy is pretty much common sense; make sure that you always make your monthly payments on time. The biggest part of establishing a good credit history and getting a good credit score is to show that you always make your monthly payments on time.
If you are going through the mortgage loan modification process, keep in mind that a loan modification does not actually hurt your credit. If you have missed mortgage payments, or will miss mortgage payments, then of course, missing those mortgage payments will significantly hurt your credit. If you are falling behind on your mortgage, make sure to engage a reputable attorney to handle your case and help you get the very best loan modification possible.
Recovering from a foreclosure or Bankruptcy can take 5 or more years, whereas following the above tips and maintaining a conservative approach to credit can help a homeowner recover from missing a mortgage payment within a year and a half.
This article was provided by ModificationZoom, your resource for loan modification information on mortgage loan modification requirements and guidelines to help you save your home and avoid foreclosure. For more information on all facets of loss mitigation, how to keep your credit score high, and other useful tips, please contact us by completing the “quick-qual” form. We can now connect you with a specialist that can help you consolidate your credit card debt. This process is known as debt consolidation.
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Valuable thoughts and advices. I read your topic with great interest.
I can vouch for checking your credit from time to time, even when you are not ready to make a big purchase. Get your free annual credit report, spend an hour to highlight any inaccurate information and then file dispute letters with each of the 3 main credit bureaus. If a response is not received within 30+ days, request that the negative information be removed from your credit report.
Hiya!. Thanks a bunch for the blog. I’ve been digging around for info, but i think i’m getting lost!. Yahoo lead me here – good for you i suppose! Keep up the great information. I will be popping back over in a couple of days to see if there is updated posts.