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A Closer Look at Credit Scores and Credit Reports


If you’re thinking about buying a home, you’re going to need to have pretty good credit. Here are some tips to help get you on the right path.

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Potential homebuyers often ask me about what they need to do to improve their credit. Here is the advice I usually give them.

First, don’t pay anyone to repair your credit. It’s actually illegal to pay a person for credit repair. Here are a few more things you can do to make sure that you’re repairing your credit properly:

1. Payment history. This equates to 40% of your overall credit score. Pay everything on time because that’s the best thing to do.

2. Outstanding debt. 35% of your credit history is based on this. If you have $1,000 and you’re using $1,000, you have nothing left and it will pull your score down. Try not to use more than 30% of your credit at a time.

3. Types of credit. Credit with clothing stores won’t help you as much as credit lines with banks and credit unions.


Don’t let anyone pull your credit unless they have a valid reason.


4. Age of credit. How long have you been paying your credit on time? This will count toward 10% of your score.

5. Inquiries. Don’t let anyone pull your credit unless they have a valid reason. It’s against the law for them to pull your credit without your signature. This accounts for 5% of your score.

If you need to increase your credit score from where it is now, here are a few things you can do:

1. Financial fitness programs. These are nonprofits that can give you good professional advice on how to raise your score.

2. Consumer credit counseling. They charge a minimal fee, if anything, for their services and advice.

If you have any questions for me about your credit situation or about anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

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