Making my credit rating better?
I recently got a credit rating report and ther were qute a few things still on there that I had paid off years ago. I still have quite a high balance on a catalogue and a store card, plus lately have been overdrawn quite alot due to companies taking cheques out two weeks later than expected which means that I have become overdrawn and had several overdraft charges. Reason I am asking whether I can improve my credit rating is because in the next year or two my partner and i are looking to buy our own house and don't really want to get knocked back due to my credit rating. Which we did not so long ago. I am making regular payments, high payments than the minimum to try and get things paid off. I also would like to know is, say in a year I manage to pay everything thing off and all balances are 0, will my rating improve and be able to get a mortgage?
Public Comments
- there are links on this page for various types of credit repair and other info on the subject http://www.researchitforme.com/wesayes/loans
- With credit reports the bad outweighs the good. Mortgages and loans are determines by your fico score which is calculated by the info on your credit report. 35% is based on your payment history and the more recent a missed payment the more it hurts your score 30% is the current usage of credit, meaning how much on a current loan do you still owe, how much of your credit limit on your cards is used. If your balances are close to the limits it has a negative effect on your FICO score. 15% is the length of credit history, how long have you been using credit, 1 year, 10 years, the longer you've been reliably using credit the better. 10% is based on your applications for new credit. Applying for too many new accounts is bad for yor FICO score. It's based on how many places have requested a credit report on you, so even if you apply and don't get it then it still reflects negatively on you. New accounts include car loans, store credit cards, regular credit cards, etc... The last 10% is based on how well you've been able to pay off different types of debt. It's in your best interest to get your FICO score as high as possible before applying for a mortgage because it's the key to secure the lowest available interest rate. If you've ever seen an ammortization schedule then you'll know that over the life of a mortgage interest alone can be equal or more than the purchase price of the house. If you want to crunch the numbers and see if it'd be worth it to wait a little longer on the purchase to save more for a down and improve your FICO it may be a wise decision in the long run.
- Close open accounts and pay your bills on time
