Hello Everyone! Dean Watson here with Sunset Mortgage! Thanks for tuning in today! Today I’m going to make a video on our Mortgage Credit Hack- Everybody always asks me, “Mr Watson, how can I increase my credit score? I’ve got some bumps on my credit
I've got this issue, that issue” So, today’s video is going to comprise of just revolving credit So, all revolving credit is a credit card It could be a line of credit, MasterCard, Visa, Discover, American Express, department store credit cards, any kind of credit card that you have in your wallet is under this heading right here So, without being obvious the first thing that you need to do is make sure that you don’t have any late payments
I'm not talking about a week late or a couple of days The credit bureau and the scoring system determines your score – any late payments over 30 days So, you want to make sure that you do not make any payments late, after the billing cycle ends Okay? So, that's very important The second thing – a lot of people have a problem with is the lack of credit
So, most times low credit scores are derived from not having any credit at all So, no departments stores, no Visa, no MasterCard A lot of people don't have credit cards because they don't want to get into debt They don’t want to get into problems But, not having any credit cards is worse than having a whole bunch
So, just keep that in mind And, the reason for that is because the credit scoring system, the way the model works, is that up to 1/3 of your entire credit score is determined by revolving credit So, if you don't have any revolving credit cards your scores are going to be naturally lower than somebody who has three or four or a couple Okay? So, keep that in mind too And, number four
This is the one that gets everybody jammed up here It’s the credit limit versus the outstanding balance Okay So, what I mean by that, is; just as an example, let’s use some round numbers Let's say you have a credit card for $1,000 limit, and you get the credit card, and you go and charge it up, and every month you max it out and pay it off
Well, a credit score snapshot is a snapshot in time So, whenever we poll the credit bureau, whatever your balance is at the time of that pull the credit bureau is going to reflect in your immediate credit score So, what I'm trying to say is, a credit score is kind of a moving target So, it's kind of hard to pinpoint So, my suggestion, and this is what I tell everybody to do, is to make sure, before you apply, make sure 30-60 days before you apply for a major credit line, this goes for mortgages, car loans, any kind of personal loans that you're trying to get at your bank or credit union, always try and pay your balances off 60 days prior to applying for the loan
Or, we go by what’s called the 30% rule, okay? And, what we would like to see is that your outstanding balance is approximately 30% or less of the outstanding balance Doing this and doing that; paying the balance off, will ensure the highest possible credit score for that particular credit card Thanks for tuning in, Folks! And if you have any specific questions about your mortgage needs, you can always call me at Sunset Mortgage Or, you can visit our website Thanks again! Have a great day!