Friday, March 13, 2009

How to improve your FICO score in 2 months

As it gets more difficult to get a mortgage lately, I wanted to pass on some tips to improve your FICO score so you will be able to get the best possible interest rate when you buy a home.

35% of your score is based on your ability to pay your bills on time. If you have late payments that you believe are inaccurate-get them updated or removed. The next step is to pay down the balances on your account. 30% of your credit score is determined by your debt to available credit limits. The lower the better! If you have a $5000 credit limit on your credit card, don't carry more than a $1500 balance on the card.

Lastly, you can go to www.optoutprescreen.com and Opt Out from companies that buy lists from credit bureaus. I am not sure exactly how this works, but I assume the scoring model sees that you do not get the "approved offers" in the mail and are less likely to get new credit cards.

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