4 Ways to Increase Your Credit Score

Whether you're looking to buy or rent, your credit score is a really important factor for everyone!  Most people can't buy houses or cars with cash.  Everyone has debt.  Our credit scores are calculated based on many criteria and can vary between financial institutions.  But they basically are giving you a rating as to how likely you are to pay your debts.  The higher the score, the more likely you are to pay your debts back and on time.  The lower the score, the higher the risk you are for a financial institution to lend to you.

Here are 4 things you can do to increase your credit score right now:

1- Watch Your Credit Card Balances:  1 Major factor in credit score is how much revolving credit you have vs. how much you use.  The smaller the percent the better for your score.  So try to increase your debt limits but use less.

2-  Eliminate Balances:  This is especially important for small balances on multiple cards.  It's better to have 1 or 2 'go to' cards to use for everything.  Pay off your debt instead of moving it around from card to card.

3-  Leave Old Debt On Your Report:  Good debt that is handled well and paid off, like a house or car, is good for your debt and credit score.  Some people erroneously try to get debt removed from their report, which they can do after 7 years.  But you want to show a longer history of debt, and debt that has been managed well shows you are reliable.  So leave good debt on there.

4-  Pay Bills On Time:  This seems simple but 1 of the biggest thins you can do to have a good credit score is simply pay on time month after month.  Helpful Tip:  Setup Auto-pay so you don't forget or have to remember, put reminders in your calendar to help you be on time, pre-pay things if you can.

It's really helpful to talk to a good lender when you are first considering buying a home.  They can help you identify your credit score and if it's too low, they can help create a plan to increase your score and know how long that will usually take.  They can also get you a pre-qual letter that lets everyone know you are really qualified to make an offer on a home.  This pre-qual will also help us identify what price range of home we should be searching in.  I'd love to help you talk to a qualified mortgage lender.  Just let me know.

Down Payment for an Investment Property

So you are thinking about an investment property but want to know how much you really need to get it started, here's the scoop:

*On a conventional loan, you can put down as little as 5-10% for a down payment.
*If you are taking out an additional loan and/or it's for an investment property, the minimum amount you need for a down payment is 15%.  At 15% you will have to pay extra fees and PMI. With 20% down, you get a lower rate and no PMI.  This is really your minimum needed.  If you put 25% down, you can get even better interest rates and deals on your loan.

The average home price in AZ is $250,000.  This means you need at least $50,000 for your down payment to get you going on your investment property.

Now, where can you find $50,000.  Here's some ideas...

*Save It
*Cash out Stock Options or Stock Investments
*Use your Bonus, or several Bonuses
*Refinance Your Current Home, and Pull the Money out of That
*Get a Line of Credit on Your Current Home
*Use Equity from a Rental Property You Already Own  (Once you get started it gets easier to get more investments going)
*Get Gifted Funds From Family (ie. inheritance)
*Sell Collateral (Motorcycle, RV, Camper, etc. that you no longer use)
*Go In on the Project With Family or Friends, then You'll Need to Bring Less Money To the Table

Let me know if you have more questions about getting started with an investment property.