Each week we will introduce you to Spokane area realtors and experts with inside tips and tricks to buy and sell your home as quickly and easily as possible. This week we are taking a break from the Realtor interview and chatting with Sam Parker. Sam is a Credit Expert. For many people poor credit and thoughts about poor credit are a barrier to home ownership. Sam has great insights on fixing your credit and getting mortgage ready.
Sam Parker is the CEO of My Credit Guy Credit Restoration, He has 16 years of experience in the business and is focused on getting people loan ready
Here is a glimpse into our discussion…
How do they create a credit score/FICO score?
5 different components of your credit score
- 35% Payment History Do you make on-time payments? late pays hurt you more the higher the credit score. Collections
- Credit usage – Credit card section – treating them like money that you don’t have or treat them like a tool? Balances below 50% of the total but 30% is better, but if you are using it like a tool you will want to keep it between 5 – 8 %.
- Length of payment history – so don’t close out all of your accounts or pay off car loans, ets.
- New Credit – FICO score doesn’t like new credit, but in 2 years the score will be better as long as you pay on time.
- Mix of credit – Department store, car loan, visa/mastercard Build a strong resume of credit.
How far is my credit going to go down if I have my credit pulled?
Within 30 days within a like industry you could have multiple pulls and you would only see your score go down 1 to 3 points.
What does a perfect score look like?
You can’t have too many credit cards as long as you can pay them on time. But, he suggests 2-3 credit cards and monthly auto pay at least the min, auto loans, student loans, mortgage.
Putting everything on a credit card and then paying it off at the end of the month; is that a good strategy?
As long as you are making your on time payments. It is fine to do that, but as long as you are not trying to get a mortgage. Stop that about a month ahead of the time before you have your credit pulled.
The credit card companies usually report to credit bureaus between the 16th & 24th of the month. If you are going to have your credit pulled next month make sure your payment the month before is in on or before the 15th of the month so you can catch the reporting cycle.
Paying down credit card down because Tony or Sam told you to; when is the best time to pull the credit?
After you have paid it down then have your credit pulled after the 8th of the following month.
Planning ahead is very important, so if you are planning to get a home loan you might want to check your scores about a month ahead of time so you know where you are at.
Why is Kredit Karma, mortgage lenders and car dealers credit scores different?
There are different algorithms for different lenders so pay attention to the data that the score is made up with as the score is going to be different but the data is going to be the same. However, as a note once you have your credit pulled from on mortgage lender that is the same score as you will receive with all mortgage lenders because they all use the same algorithms.
Credit Inquiries will affect your score from 0 to 3 points.
What are some of the simplest things that people can do to improve/manage their scores?
If you don’t have credit you need to establish it responsibility by getting a credit card. You need to know when your payments are, what your balances are, when your reporting date is and you need to pay it on time every month. You can also pay down a credit card. You can have someone add you to their well maintained credit card as an authorized user, but only if you are part of making the payments. If you have negatives on your credit report and you disagree with them you can get a deletion, but you should know what you are doing as there are a lot of dos and don’ts. You can actually hurt your scores if you don’t know what you are doing.
The reason that you have bad credit is one of two things: bad things happen to good people or good people make bad choices, but it is more likely that you didn’t make your payments on time or didn’t make them at all.
How long does it take to establish credit?
There are 3 groups of people:
- No Credit at all (Here is a link to the Credit Builder Card)
- Some Credit but not all the proper mix of credit to generate a score
- People who have had credit in the past but all they have now is bad credit on credit report
For all 3 types of people they need to fill in the missing pieces. They need positive credit. They need at least 2 revolving credit. Then repull credit after 30 days. But for #3 they need to work on removing the bad credit.
Pretty good credit, but you are applying for a credit card. What should you be looking for?
Do they report to all 3 bureaus, what is the APR and terms and do they do auto payments
What are the most common mistakes?
Maxing out credit cards, not paying on student loans & late pays
Where can you find more info on My Credit Guy?
On Facebook at My Credit Guy Credit Restoration
If you are wondering if you would qualify or are overwhelmed by credit stuff. Lets talk here is a link to get started