Galen Call Reverse Mortgage Specialist Monterey California

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Galen Call September 11, 2012

Simple Tips To Keep Your FICO High

Fortunately in the world of reverse mortgages you do not need a wonderful credit score. Even  though credit is not a factor in the approval of the reverse mortgage loan an underwriter will look for several items that may be shown on the report.  The list includes items such as Federal debts or a judgement lien which must be paid at closing. It is important to have good credit but those who are interested in the reverse mortgage need not worry about their score!

FICO recipeFor today’s conventional home buyers and refinancing households, the value of “good credit” has never been higher.

Mortgage approvals hinge on your FICO score, as does your final mortgage pricing.

If you’re shopping for a home in California , therefore, or contemplating a refinance, be aware of how everyday credit behaviors can affect your FICO. Even small events can make a big impact.

Here are some common-sense steps to help improve your credit score.

First, keep a “cushion” on your credit cards.

30 percent of your credit score is linked to “Amount Owed” and a big part of Amount Owed is a raw calculation of (1) What you owe in dollar terms, against (2) How much credit you have at your disposal. The credit bureaus want to see at least 70% of your credit “available”.

If you can keep your cards at least 70% available, your credit scores should improve.

For example, if all of your credit cards give you access to a combined $50,000 and you are using $10,000 of that available credit, you have 80% of your credit available to you and this is “good”.

Raise your balances to $30,000 and this is “bad”.

Second, don’t make major purchases on credit prior to making a mortgage application. This includes opening a store charge card to save 10 percent or more on a washer/dryer set, for example; or for any other appliance or furniture piece.

The reasons why are two-fold. One, store charge cards are often opened with a limit matching your initial charge, rendering them 100% utilized. This is bad for a FICO, as discussed above. And, two, opening a new charge cards has a negative FICO impact anyway.

Charge cards are associated with high default rates.

Third, make all of your monthly payments on time — even the ones in dispute. You may not want to pay that $80 wireless phone bill, for example; the one that you think you owe, but remember that Payment History accounts for 35% of your credit score. Even one late payment — or payment in collection — and your credit score can drop.

It’s often less expensive to pay a bill in dispute than to be relegated to a higher mortgage rate. The payment is dispute is remedied today. The payment on that mortgage rate lasts for 30 years.

Filed Under: Personal Finance Tagged With: Credit Lines, Credit Scoring, FICO

About Galen Call

Galen Call is a Certified Reverse Mortgage Professional (CRMP) in Monterey, California. She manages the Reverse Mortgage Division at TreeHouse Mortgage Group, a Division of American Pacific Mortgage Corporation (CALDRE #01215943 | NMLS# 1850). Galen can be reached at 831-645-1164 or by email.

Galen has been originating reverse mortgage loans since 2006 and active in the mortgage lending industry since 2003. She helps clients aged 62 and older with Home Equity Conversion Mortgages (HECM) and proprietary jumbo reverse mortgage loans. Galen brings a proactive and collaborative approach to reverse mortgage lending.

GALEN CALL
Manager, Reverse Mortgage Division
American Pacific Mortgage Corporation
dba TreeHouse Mortgage Group
Call Today: 831-645-1164
Fax: 831-643-1161
Galen@TreeHouseMortgage.com
NMLS #226129 | DRE #00908338
APMC DRE #01215943 | APMC NMLS #1850

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Copyright © 2021 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.

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