Home Buying Tip - Improving Your Credit Score in Minnesota

  • Check your Credit report periodically, even if you are not seeking a loan. This will help identify and prevent any mistakes on your report.

  • Pay bills on time.

  • Get current and stay current on all open accounts.

  • If a collection account is paid off, it will stay on your account for 7 years.

  • If you are having trouble making payments, meet with your creditor and work out a payment plan. This may avoid negative submissions to the credit agencies if creditor is aware you are trying to work it out.

  • Keep balances low on credit cards. Do Not move debt around from one creditor to another, this is a red flag to credit agencies.

  • Opening new accounts and paying them on time will improve an otherwise low credit score.

  • If “rate shopping” do so within a limited period of time, such as 2 weeks.

  • Use and pay off balances on credit cards. This will increase your score over a period of time.

  • Apply for new credit cards ONLY as the accounts are needed.

  • Closing old accounts does not make them go away. Only close accounts in good standing if possible. Remember, taking the above steps may not result in immediate raising of your score, it may take 6 months to 1 year to begin to see improvement.

Be Careful:

  • Cosigning on a loan, you are ultimately responsible for the payment!

  • Giving out your SSN and Birth Date, these are commonly used for Identity Theft.

  • Watch for inaccurate information. If a person with a similar name has a past due account, it may show up on your credit report.

If Errors or Mistakes are found on your Credit Report:

  • Contact the credit agency containing the mistake. (Put it in Writing)

  • Credit Agency has 30 days by law to investigate and respond to the error. This does not necessarily mean that the error will be fixed within the 30 days.

         

Scott Wollmering

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