Keep Your Credit Scores In Check

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Things NOT To Do When Trying To Improve Your Credit Scores

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Your credit scores are very important when determining your qualification for loan pricing. Loan pricing includes your interest rate, your points and fees, etc. The number you want to have to be able to get the best rates is 740 or above. And identity theft is more common nowadays. Therefore, it is very important that you monitor your credit profile. (Note that when you apply for a mortgage, lenders check all three of the major credit bureaus – Experian, Trans Union, and Equifax). We recommend you review your credit report at least annually. This will minimize your chances of becoming a victim of identity theft. It will also allow you to catch any mistakes on your report.

Here is a list of things NOT to do when trying to improve your credit:

  1. Don’t Pay Off Collections or “Charge Offs”. If you want to pay off old accounts, do it through escrow, making sure that the debt is yours. Believe it or not, it is better to have an “open” unpaid collection account or charge off on your credit report than to pay one off right before applying for a loan. It is best to try and negotiate a “letter of deletion” from the creditor. Call us to review the best way to accomplish this.
  2. Don’t Close Credit Card Accounts or it may appear that your debt ratio has gone up. It also impacts other factors in the score, including credit history.
  3. Don’t Max Out or Over Charge Credit Card Accounts. Keep your balances below 40% of their limit during the process. Pay down balances if possible.
  4. Don’t Consolidate Your Debt.When you consolidate all of your debt onto one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized.
  5. Don’t Do Anything That Will Cause A Red Flag To Be Raised By The Scoring System – This includes adding new accounts, co-signing on a loan or changing your name or address with the bureaus.


We are always available to discuss credit issues and strategies with you. Don’t hesitate to call.


Ken Thayer, President of RFC