Written by Your credit score is growing more and more important, especially in leu of todays recent market activities. Underwriters are requiring credit scores to be pristine in order to qualify for loans on purchases such as real estate, cars, etc. There are several things that we can do to improve our credit score, all of which require time and planning. However, there are also matters of information that keep a credit score from being as high as it should be.
For instance, did you know that having an incorrect address on your credit report can cause serious issues with your credit score? A small misspelling is not cause for immediate action, but having, let’s say, a former address where your current address should be can cause many red flags to appear. If an underwriter for a mortgage were to see this, they may think that you are attempting to purchase a secondary home, rather than a primary home. This can cause an unnecessary delay in the loan process, and may even be reason for some lenders to deny the loan, on account of not disclosing accurate information. Also, this may signal to credit agencies that someone is attempting to take out a line of credit under your name, which leads me to my next point.
It is important to keep an eye on your credit score, especially during the months before you plan on needing a significant loan. If someone is attempting to steal your identity, you are going to need time to resolve this. Trying to fix identity theft during the time you are trying to take out a loan can add unnecessary time and effort to the processes. Even if the credit line taken out has a balance of zero, the number of credit accounts you have plays a role in determining your overall credit score.
Another area of importance in reviewing your credit report is the limits listed for each line of credit. While this may seem trivial, a major area in determining your credit score is how much credit is available to you, as well as how much of that credit you have taken out. Having limits on your credit report that do not accurately reflect your actual limit will skew this ratio, and drive your credit score down lower than what it really is.
Finally, it is important to make sure negative hits on your credit have been removed by the time they were supposed to. Certain events have a predetermined amount of time that they are supposed to be on your credit score. It is up to you to follow through and make sure that these items are removed.
