Home Loan Focus

Archive for the ‘Credit Improvement’ Category

Last week I refinance some of my debt.  I’ll be upfront and honest, I have a lot of debt.  I maintain that did very well and with one exception I never miss a payment’s.

Last month I received a bill for more my credit card companies, one of my best credit cards had increased my interest rate to 20%.  That is too high.  The day after I received the bill I received an offer from the same company to perform a balance transfer from other credit cards to this 20% card at a fixed rate of 4%.  I suspect is an error by the credit card company and raising my rate so I gave them a call.

I asked them why the rated increased and it was a mistake.  After being transferred through three times, I learned that they had increased my rate due to my overall debt balance on all of my accounts.  There are many reasons why credit card companies will increase your rates, this one highlights the fact that they use your credit reports and your credit history to continually reevaluate the interest rate they should charge you.  The timeliness of your payments does not always work as the sole item contributing to the interest rate you pay.

In general they have to continually monitor how risky you are to them.  For this they use a combination of their own personal history with you and on your accounts, and external information provided by credit reporting agencies.  In my case the external information caused an increase in the rates.

So this triggered my call and that led me down the path of refinancing part of my debt.  I’ll discuss more factors about the refinancing in a future article.

Your credit can almost always be better.  Life happens all the time and this takes a toll on your good planning and hard work where your credit is concerned.

You need to prepare in advance to prepare for your next home loan.

What does that mean?

First you have to understand the advantages of good credit.

The better the credit the more money you can qualify to borrow.

Better credit translates to lower interest rates and reinforces the first point because if you are paying less in interest that means you can pay a little more in principal and borrow more.

Good credit opens the doors to more cooperative lendors, loan officers, realtors and much much more.

Now, not too many people actively work to sabotage their own credit.  Many people try to make things better all the time, but there are several things you can do to make your credit better prior to going for that home loan.

We will cover many of these items and I will describe some of the tactics that I am personally using myself and how they are working.