NJ First-Time Home Buyers

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Collection Accounts and New Car Loans - Did YOU know?

I just finished another one of my Credit Scoring Seminar classes tonight, and after countless times doing this, I still chuckle.  Where do people get their knowledge of credit scoring?  This specific class was great and intelligent so this isn't directed at them. But really, who ever told us that doing the following was good?  Especially while applying for financing ...

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Pay Off Collections - NO NO NO!  This is almost always a bad move.  Paying off a collection account often brings down one's credit score.  Why?  Because it brings the collection "current" - which looks like you just had the collection put on your credit this month.  And the more recent the blemish, the worse your score.

Close Credit Cards - Nadda!  Closing credit card accounts, especially older ones, can hurt your "history" segment of the credit scoring model (History is 1 of 5 main catagories).  Closing all of your credit cards could be really bad depending on other factors.  How else can the credit agencies know your wonderful history if it isn't reported?  Just leave them open.  It's ok.  Really. 

Buy a New Car!!! - What?  Something triggers in people's minds when buying a home. To this day I don't know the scientific word for it - let's call it "The Crazies".  People have the strongest desire to buy a car while trying to buy a home.  If you are new at this, realize that just because you may be pre-approved, doesn't mean your loan is done with and ready to close.  Not only could the new car loan lower your FICO score, but more than likely the new, higher car payment could blow your loan ratios out of whack and therefore nullify your approval. 

Budget

Like so many successul relationships in life, it is all about communication.  Just be proactive and let your loan officer know what you are thinking of doing.  If he/she is worth a lick they'll be able to advise you correctly and save everyone a huge headache.  As always, if you have any questions regarding credit, credit restoration, or credit scoring, just drop a line or visit one of my classes.  I'm always happy to help. 

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Treasury Mortgage - 550 Bridgeton Pike, Mantua, NJ 08051 - 1810 Springdale Road, Cherry Hill, NJ 08003

Licensed by the NJ Department of Banking and Insurance

Comment balloon 1 commentRichard & Carol DeGrace • October 14 2008 10:21PM
Collection Accounts and New Car Loans - Did YOU know?
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I just finished another one of my Credit Scoring Seminar classes tonight, and after countless times doing this, I still chuckle. Where do people get their knowledge of credit scoring? This specific class was great and intelligent so this isn't… more
Updated First-Time Home Buyer Rates for NJ (Again)
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New Jersey First Time Home Buyer program rates have changed, again. I hosted a very similiar message just over a week ago. In the past these programs would only change every so many months. Not only that, but these rates were usually lower than… more
New Jersey First Time Home Buyer Program Update
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First-Time Home Buyers in New Jersey and for Realtors in NJ who are working with first time home buyers, the rates for first time home buyer programs have changed as of Sept 30, 2008. Due to Wall Street Market volatility that has increased the cost… more
Understanding the Keys to Credit Scoring and Buying a Home
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These seminars are designed for the public, but I would highly encourage professionals to attend (with or without their clients) as I promise you will learn something important. Understanding the Keys to Credit Scoring Some of the topics… more