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Ann Arbor—October 10, 2003--With
mortgage rates near historic lows, many consumers are
taking advantage of the low rates and purchasing a home
or refinancing into a different loan program. Consumers’
credit scores are a major factor in determining the
interest rate one will qualify for, and with that in
mind, the Michigan Mortgage Brokers Association (MMBA)
recommends that consumers meet with a licensed mortgage
professional to discuss how to improve their credit
score and profile.
During the meeting with their mortgage
originator, the MMBA recommends that consumers consider
the following tips to improve their credit score and
profile before purchasing the home of their dreams.
- All credit card balances should be paid to below
30% of the available credit balance.
- Do not consolidate credit card accounts to one or
two cards and close out other accounts. Consolidation
of your credit card balances will noticeably distort
the appearance of your credit use. Having a low balance
on a few cards is better than having high balances
on several cards.
- Keep the number of credit card accounts you have
open and actively use to a minimum number. Do not
close accounts without the advice of a knowledgeable
mortgage broker.
- Review your credit report for accuracy for at least
a 90-day period before applying for a mortgage. Have
any inaccurate information corrected at the repository
that is reporting the faulty information on your report.
Also, you may ask for a credit dispute form from your
mortgage broker. Attach any documentation you have
to support your claim and mail the form to the reporting
repository with a return receipt requested. Within
30-days the repository will modify any corrections.
A request for an updated credit profile can then be
made.
- Paying off a collection account or judgment will
not eliminate it from your credit profile. Paid or
satisfied negative credit items will show a zero balance,
but will not disappear from your credit profile for
a seven-year period. A late or collection account
will still be reflected on your credit profile even
if it has been paid off recently.
For additional consumer information,
visit the Consumer Section of the Michigan Mortgage
Brokers Association web site at www.mmbaonline.com.
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