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Credit yourself for good credit

Cash may be King but in the mortgage business good credit is worth a lot more. With cash you do not need to worry about getting a mortgage and interest rates mean nothing to you, but most of do need to obtain a mortgage if we are planning to buy a home. So if your credit is good, or better yet great, you are in shape to being approved for that mortgage.

There are three major Credit Bureaus that collect and compile a file a on everyone who have a social security number. Each bureau has a computer program that takes all the information that is on record for you and it calculates a three digit numeric score. This score is a major factor in determining your credit worthiness. So basically, the higher your score the better.

Credit scores run from as low as four hundred to the low eight hundreds. If your score were lower than four hundred I would believe that you would have a problem buying a pack of chewing gum on credit. On the other hand is your credit scores are in the eight hundreds you are the ideal candidate for a mortgage. Once again the higher the score the better.



To find out your credit scores you will need to contact the three credit bureaus, fill out their paperwork and send them a check for the report. Or, contact a mortgage professional and they can do the same thing, also at a cost of the credit report.

Plan on being surprised as to the amount of information the credit bureaus have on you. You may see addresses that are from twenty years ago and you may see employers from your high school years. Also plan to see errors on the reports. I would estimate that approximately one half of the credit reports that I run for my clients have some error, some very major but most very minor.



Since your credit scores are calculated by the number of credit lines you have, such as credit cards, mortgages, car payments and even student loans. The reports will show how much is left to pay, number of late payments, if any, and the date the account was originally opened.

If your score is low and no late payments are on record it can be due to the accounts are always close to being maxed. Or it could be to the limited number of credit lines you have open and current.

I suggest that you have no more than three credit cards and that you do not fall into the trap of rolling your balances from one charge card to another. Somehow the credit bureaus can track this and it does hurt your credit scores. Also, the longer you have a credit line, and it is without any late payments, it helps to bolster your scores.

So here is the bottom line. Have no more than three credit cards. Pay your bills on time and never ever pay the minimum payment, add a few bucks to the minimum. Plan on seeing an error or two and plan on it taking at least three months for the report to show any corrections. And finally, review your report annually, as you are responsible for your report, not the credit bureaus.

For answers to your mortgage related questions call Bob Kieber at (970) 262-1199 or e-mail him at rkieber@comcast.net. Bob is a local mortgage lender and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.


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