Help! How to improve credit to get the best mortgage rates?

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yellow1982
 
Posts: 1
Joined: Sat Apr 14, 2012 11:55 am
Location: Ohio

Help! How to improve credit to get the best mortgage rates?

Postby yellow1982 » Sat Apr 14, 2012 12:11 pm

Looking for any advice! My husband and I are getting ready (within a year) to build a house. We applied for a pre-approval to refinance our current home and were shocked when the interest rate came back higher than we are at now.

Chase (who we applied with) sent us information. It said my credit score was 741 (Experian), listing these factors:
  • Length of time accounts have been established
  • Too many accounts with balances
  • Too many inquiries in the last 12 months
I'm 25 so there isn't much I can do about the length of time accounts have been established. I've had a card since I was 18 and it's still open.

My husbands came back at 676 (TransUnion), Listing these:
  • Length of time since derogatory public record or collection is too short
  • Length of time accounts have been established
  • Proportion of balances to credit limits too high
  • FACTA: Inquiries impacted the credit score
He's 30 but spent time in the USMC and didn't apply for credit until he got home. The derogatory report we need to fix, it's a collection company with a children's hospital that is driving us nuts. They never billed insurance, finally got them to bill them and insurance paid it but they haven't taken it off his report. We'll handle that and I imagine that will impact his score quite a bit?

For cards I have:

  • Lowes
  • AmEx (closed today)
  • JCPenney (closed today)
  • Kohls
  • Maurices (intend to close)
  • Chase Freedom
  • Chase Disney
Husband has:

  • JCPenney
  • Big Sandy (intend to close)
  • Chase Freedom
  • Chase Disney
We carry a balance, but we pay it before it accrues interest. When we did the pre-authorization we, admittedly, had a lot sitting on the cards. We will straighten that up but are unsure of how much is "ok" to leave on them? Or is 0 better?

We had a loan on my vehicle, which we paid. His vehicle payment auto-deducts and has never been late. We've never been late on ANY payment, actually.

I'm unsure of what inquiries it's referring to, also.

It's all just a giant headache to me. We want to get our credit in the best shape possible so when we apply for the loan, we don't have anything slowing us down.

Any help or advice is appreciated! Thank you so much.


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