Almost nothing in our lives is the same as it was just one month
ago. And every day brings new and more difficult challenges. The most important
thing, however, is that you and your families stay safe and healthy. Practice
social distancing and follow every recommendation of the CDC and the orders of
our Governors and Mayor.
Under Governor Hogan’s order, financial services firms such as RMC
are deemed essential. We are open for business and operating each day. We are
using every means at our disposal to eliminate face to face contact, such
as e-signature, video conferencing, secure document uploads, and good old
email and phone calls. Fannie and Freddie are assisting by offering more
opportunities to use “exterior only” appraisals, which eliminate the need for
the appraiser to enter your home. Closings are still a challenge, but the
closing agents we work with are using best practices such as gloves, masks,
separating parties, not trading pens and other precautions.
The bottom line is that we are here for you every day. We
sometimes work from our homes but come to the office regularly. If any of you
have a need for mortgage financing, you can rest assured that we can help.
Contact Margie for more information on our Covid-19 precautions or if you just
want to ask about rates.
We wish all of you good health, now and for the future.
Margie, Steve and Troy
This week, I will address those items that should be followed
by everyone regardless of score. Keep in mind that credit score
management is a marathon, not a sprint. Your actions will take one or
more months to come to fruition; sometimes a year or more in difficult cases.
Here are four tips that everyone should follow regardless of
1. Make Sure Your Credit Reports are Accurate
Most everyone has three credit reports, each one from the
major credit bureaus – Experian, Equifax and Transunion. Some credit
providers chose one of the three, but for mortgage credit we must have a
“tri-merged” credit report, which means a combined report including
information from all three bureaus. A recent study by the Federal Trade
Commission found that 20% of consumers had at least one error on their report. Your
credit score is based on the data in those three bureaus, so checking them
for accuracy is very important. You can do that for free once a year at AnnualCreditReport.com, the website run by the major bureaus under a mandate of the
federal Fair Credit Reporting Act. Once you get the reports, check for
errors in personal information (name, address, etc.), and review the list of
credit accounts for accuracy. Disputes have to be filed with each bureau
separately, and each individual dispute should be filed separately, meaning
three disputes for each error.
2. Build a Strong Credit Age
For young people especially, having a short credit history
will hinder your scores. A good average age for a credit history is five
years or longer with at least three tradelines, or creditors. Someone
with only a one year history will have significantly lower scores than
someone with the same on-time payment record but over five years. So
establish credit as soon as possible in your adult life (see the next section
on getting and using a credit card).
3. Get and Use a Credit Card
Apply for and maintain at least two credit cards. Three
would be better. Once you receive them, make at least one charge per
month on each, and pay off the balance each month so you don’t incur interest
charges. This will build your “Credit Age” as discussed above. But
fair warning, if you make payments late on any card, your scores will drop
substantially. Use your good credit wisely and don’t buy more than you
can afford to pay off in a short period of time (ideally by the end of the
4. Monitor Your Credit Utilization Ratio
One of the most important factors affecting your score is your
credit utilization ratio, which is the percentage of available credit that
you are actually using. Try to maintain a 15% ratio, meaning that if you
have a combined credit card limit of $20,000, your total credit card balances
should be $3,000 or less, even if you pay off the entire balance at the end
of the month. In any case, try never to exceed a 30% credit utilization
ratio, or your scores will drop substantially. This is also the reason
you should not close old credit accounts. Keep that available credit
limit to lower your ratio, even if you rarely use the card.
Have a great week!
Steven H Hofberg
Next week: More tips to improve your credit
On Monday, November 2nd, RMC hosted our 2nd Mortgage Information session for the men and women of the DC Gay Flag Football League at the Collaborative Practice Center of Greater Washington. We were lucky to have a great group of attendees who were eager to learn about what it takes to qualify for a mortgage to purchase or refinance a home. The players of the DCGFFL and their friends enjoyed food, drink, and a spirited game of Mortgage Trivia during the event. As always, we had a great time mingling with and presenting to our awesome guests! RMC has been a proud sponsor of the DC Gay Flag Football League for the past two seasons and we look forward to continuing our relationship with the league and its members in the future! (Above you will see Margie Hofberg, President (Right), and Steven Rabin, Loan Officer (Left), presenting at the mortgage information session for the DC Gay Flag Football League) Have a great week!Kindly,Steven Hofberg Operations Manager Residential Mortgage Center Inc.