Real Estate News You Can Use
November 2008
Risé Johns ASR®, CRS®, GRI
High Scores Win!
Interest rates have reached historic lows. If you are thinking of buying a home in the near future, your credit score is more valuable than anything the government sets. The better your credit score, the lower your interest rate will be. A few points up or down can dramatically affect your interest rate or result in being denied a loan.
Almost half of all potential borrowers have credit scores less then 720, the minimum score most lenders like to see. There are a few steps you can take that will have an immediate impact on your credit score.
1) Keep your credit card balance under 30% of your limit. Your debt to maximum limit is called the “utilization rate” and lenders like to see low utilization rates. For instance, if your spending limit on your credit card is $20,000, you should keep your balance under $6,000 (or 30% of the $20,000).
2) Have at least 3 revolving credit lines. This gives you a higher credit score as long as your utilization rate is low. If you have more credit lines, don’t close any account as that could negatively impact your score.
3) Verify the information on your credit report. Approximately 80% of all credit reports have at least one error. Removing incorrect information from your credit report could improve your score 10, 20 or even 50 points!
4) Protect your credit. Once you have corrected any errors on your credit report, plan to keep that good score. Create a budget, spend carefully and review your credit report periodically.
Once you have taken these steps, you will be able to take advantage of the low interest rates available. If your current mortgage has a high interest rate, a good credit score will make it easier to refinance.
Risé Johns has been involved in real estate for over 27 years. Her knowledge, experience and customer service will make your next real estate transaction a smooth one. Call Risé at (512) 267-LAGO for “World Class Service.”
