FHA Loans - New Mortgage Insurance Premiums Effective 10-4-10
FHA Home Loans - A Collection of Informative Blog Posts

How to Improve Your Credit Score (FICO)

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Tara-Nicholle Nelson of Trulia in this post 6 Quick Fixes for your Credit Score provided some great tips in answer to this question:

What do you advise a financially fit homebuyer to do to increase their credit score or make themselves more attractive buyers, to qualify for the lowest mortgage rates?

Here is a summary - read the full blog post at 6 Quick Fixes for your Credit Score

1.    Pull your reports online – get them for free, no strings attached, at the government authorized website AnnualCreditReport.com.  This doesn’t get you your actual FICO scores, but it does get you the content of your report.

2.      Consider reopening accounts you thought were open but have been closed because you haven’t used them in so long - it will help boost your utilization ratio. 

3.      Pay down some debt.  This both decreases your debt-to-income ratio (36% is the goal, including the proposed mortgage payment) and increases your credit score, if you do it right (see the next tip).

4.     Don’t close any accounts.  Instead, spread your debt out. The ideal utilization ratio is about 20-30% of your available credit overall, and on any given account. 

5.     Use your credit regularly – and pay it on time, every time:  FICO scores are a measure that shows that you have a history of responsibly using and managing and repaying your debt on an ongoing basis.

6.      Finally, check in with your mortgage broker.  Have them pull your report and score. If you’re really close to a score level higher, that would empower you to qualify for a lower rate, they can actually run a credit diagnostic on your score and generate some recommendations for which actions you could take to raise your score by the needed few points.


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