What is your Credit Score?

Credit Score 700:
8 steps to a high credit score and new home


First-time home buyers, especially
young people, may have never seen their
credit score or even considered their
credit worthiness, but when they want to
buy a home, that changes.

These days, a credit score of 700 is
usually considered a good starting point
for a home loan. However, FHA
loans may be more lenient.

But the most important thing is to
start immediately to establish, build or
improve your credit.

Here is our One-Year plan for better
credit that works for everyone, not
just first-time homebuyers:

1** Go to annualcreditreport.com and
look over your free annual report from
each of the three credit reporting agencies.
Look for errors. Then immediately
take steps to correct them.

2** Pay your bills on time. You must
never be late even once.
One of the most common comments bill
collectors hear from young borrowers is:
I have the money, I just forgot to pay the
bill. Stop forgetting. You must establish
an ironclad history of paying your bills
on time.

3** Work on getting your credit balances
below 50 percent of your maximum
credit limit. That raises your score.
If you balances are below 30 percent, it
raises your score again.

4** If you don't have a credit card, look
into establishing a secured card. With a
secured card, you send the card company
a deposit and then they send you a credit
card. You can only use the card for the
amount on deposit. But when you get the
card, you should use it. Buy something,
and then make your payments perfectly.

5** Don't apply for a store account
every time the clerk says you can save 10
percent. Each time you fill out an application,
the company hits your credit report.
Inquiries like these count against
your credit. Don't make applications for
credit unless you actually need it.

6** If you have unused credit accounts,
don't close them if you are planning to
apply for a mortgage. That can actually
make your score drop.

7** During your credit improvement
year, don't buy a car. Lenders don't want
to see buyers committed to several large
credit accounts. Never finance a car before
you try to take a mortgage.

8** Plan to open three new credit accounts
during your credit improvement
year, even if they are secured accounts.
Be sure to space your new accounts by
three months. Use each account and pay
each off COMPLETELY every month.
This is the kind of credit management
that improves your
credit score AND
teaches you how to manage
credit.