Improving your Credit Score

When purchasing or refinancing a property your credit score (FICO score) plays a huge factor. Banks want to see a high FICO score. If your FICO score is too low they feel that you are a risky borrower which in turn results in them giving you a higher interest rate on the money you borrow.  To get those amazing interest rates we have been seeing you must have a good credit standing.  If you are amongst the many that are looking for ways to improve your credit score than please keep reading. The following information can help you!  Please be aware of quick fix scams from companies that promise to improve your score fast.  Improving your score takes time and patience.

The following tips are provided from http://www.myfico.com/

Payment History Tips

• Pay your bills on time - Delinquent payments and collections can have a major negative impact on your FICO score.
• If you have missed payments, get current and stay current. - The longer you pay your bills on time, the better your credit score.
• Be aware that paying off a collection account will not remove it from your credit report. - It will stay on your report for seven years.
• If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. - This won't improve your credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

Amounts Owed Tips

• Keep balances low on credit cards and other “revolving credit” - High outstanding debt can affect a credit score
• Pay off debt rather than moving it around - The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score
• Don't close unused credit cards as a short-term strategy to raise your score
• Don't open a number of new credit cards that you don't need, just to increase your available credit. - This approach could backfire and actually lower your credit score.

Length of Credit History Tips

• If you have been managing credit for a short time, don't open a lot of new accounts too rapidly. - New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips

• Do your rate shopping for a given loan within a focused period of time. - FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
• Re-establish your credit history if you have had problems. - Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
• Note that it's OK to request and check your own credit report. - This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use Tips

• Apply for and open new credit accounts only as needed. - Don't open accounts just to have a better credit mix - it probably won't raise your credit score.
• Have credit cards - but manage them responsibly. - In general, having credit cards and installment loans (and paying timely payments) will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
• Note that closing an account doesn't make it go away. - A closed account will still show up on your credit report, and may be considered by the score.

UNDERSTANDING THE CURRENT SANTA CLARA COUNTY MARKET – IS IT A SELLERS MARKET?

As a homeowner, and a prospective seller, you may be wondering if now is a good time to put your home on the market. But how can you tell if the market is in your favor at this time? Will you lose money or make money? Is it a “sellers market”?These are all very important questions. And the answer is in the market statistics.

As a seller, one of the first things you must evaluate is the desirability of your location. Market conditions are extremely localized statistics. While the national economy and housing market tie every area of the country together to a certain degree, markets and their conditions range widely from state to state, community to community, and even neighborhood to neighborhood within a community.

You must ask yourself, and your real estate agent, “Is my neighborhood up and coming or has it already come and gone?” If you live in a neighborhood that is highly desired due to its school system such as Cupertino, or areas of status and Prestige such as Los Gatos and Saratoga, then you may find yourself in a continual sellers market, where you will always be in the advantage. 

Looking at the most recent sales in your surrounding area is very important. How much are homes selling for? And how does your home compare in size, location, upgrades, and condition?  Unfortunately, an issue completely out of your control can have a direct effect on your ability to sell your home, and for a good profit. Foreclosures in your neighborhood affect your home’s value. This isn’t fair, but it is how the market works. Buyers look for the best home for their dollar. If they are able to buy a home on your street for a foreclosure price, then suddenly your asking price must decrease in order to compete. Be sure to ask your agent for tips on how to make your home stand out again to buyers, despite this issue.  Another important statistic you should be aware of is “days on market.”  This means how long it takes a home to sell from the time it hits the market. In general terms, anything less than 6 months is considered a sellers market. If the average time is longer than 6 months, then the market is in favor of buyers.  This should be a consideration for when you look to buy your next home. Unless you are prepared to carry two mortgages, you will want to make sure your current home has sold before looking for the next. 

How is the local job market faring in your city? If you live in a town that has a healthy economy, then chances are you live in a sellers market. People who have steady jobs are more inclined to look to buy. The bigger the unemployment figures, then fewer buyers on the market. 

Another consideration is “appreciation.” In a healthy market, a home should increase in value each year. Many of the areas of the country, however, experienced a “bubble burst” after seeing years of record appreciation rates. As we all know, California and more specifically Santa Clara County was amongst these areas.  Homes bought during the bubble may very well be worth less now than their owner owes. However, it is important to understand the long term effects the market will provide. Although Santa Clara County has experienced dips in appreciation about every 10 years, the long term data shows that this market continues to consistently appreciate. 

Be sure to discuss all of these issues with your local real estate agent. They will be able to help you determine whether now is a prudent time or not to put your home on the market. 

To give you an idea of how the Santa Clara County market is currently doing we have included the most recent statistics on home appreciation and average sales price for this area.

Santa Clara & San Mateo County Housing Inventory Averages

Santa Clara and San Mateo County Housing Inventory averages on July 28, 2010.

 

*Numbers based MLS data for the specified date