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How to improve your credit score

These fixes will help you get better rates

A credit score tells lenders whether you're a safe bet when it comes to trusting you with credit. The number is an indicator of whether you pay bills on time and whether you have outstanding debt, so it helps lenders determine whether you qualify for a mortgage, credit card or loan, and for how much. We'll show you how to obtain your score and improve it so that you can get the best possible rates.

How your credit score is calculated

You actually have three credit scores, one for each of the three credit bureaus: Equifax, Experian and TransUnion. Each score is based on that particular bureau's information about your financial history, and as that info changes, so does your score.

Credit scores are also called FICO scores, because the scores are usually generated by software developed by Fair Isaac and Company. FICO scores have different names at each of the three credit bureaus, but they're developed using the same method.

Credit scores are calculated with information from five categories:

• Payment history (35 percent). If you've paid bills late, had an account in collection or declared bankruptcy, your credit score has taken a serious hit. Recent problems have greater impact than older ones.
• Amounts owed (30 percent). This area accounts for how much debt you have, what kinds and how close you are to your credit limit.
• Length of credit history (15 percent). Older accounts improve your score, because they indicate that you've been able to maintain good standing.
• New credit (10 percent). Opening a number of new accounts in a short time frame may decrease your score.
• Types of credit used (10 percent). Having a few different types of accounts (credit cards, retail accounts, installment loans, mortgages) has a positive affect on your score.

What's a good score, anyway?

Credit scores range from 300 to 850, and any score above 720 is considered a good score. If you have a score of 740 or higher, you will qualify for the best rates. On the other hand, if your score is 619 or lower, you will have a difficult time getting a loan or credit card, and if your score is below 559, it is unlikely that you will qualify for a loan.

Scores can vary from agency to agency, based on whether the information they have collected about you is complete and accurate. If there are varying scores, a lender will usually go by the middle score.

How do I find out what my credit score is?

Once every 12 months, you are eligible for a free copy of your credit report from each of the three national consumer reporting agencies. These reports show whether you pay your bills on time, have filed for bankruptcy and even whether you have been sued or arrested.

While you're entitled to free credit reports, you'll have to pay to find out your credit score. You can order your score from each of the three reporting agencies' websites.

To bump up your FICO score, try these tips:

• Dispute incorrect information in your credit report. If you find errors, complete the dispute form included with your report or write a letter to the reporting agency. In your report, identify the mistakes and clearly state why they are incorrect. Send photocopies of your report with the mistakes circled, and include copies of documents that support your argument.
• Pay your bills on time. Delinquent payments make a big dent in your score, so do whatever it takes to make sure that you pay your bills on time. Set up automatic debits and payment reminders so that you don't miss another due date.
• Minimize your debt. Pay off your debt as quickly as you can. Keep balances on credit cards as low as possible and pay off the debt, rather than transferring balances from card to card.
• Settle any debt in collections. Contact the collectors to negotiate a pay-off settlement. Make sure you receive the collector's agreement in writing before you send in any payment.
• Recognize that negative information will stay on your report for a while. Most negative information, if it is accurate, stays on your report for seven years. The exception to this rule is bankruptcy, which remains for 10 years.

www.mvprealestategroup.com

In a sellers' market: 3 ways for buyers to win a bidding war

Barely 12 months ago, buyers could confidently peruse piles of listing sheets before making a lowball offer and getting a nice discount off the list price.
Not anymore. Last month, there were about 44% fewer homes on the market in Chicago than in February of last year, according to Midwest Real Estate Data. The city had only a 3.8-month supply of housing units, compared to an 8.9-month supply a year ago.
Surprise: it's a seller's market. And that means many homebuyers are likely to find themselves in a bidding war.
I've seen it more than a few times over the last year. You hunt and you search and you think you've found a winner. You and your agent pour over comps and market stats. You figure out what the seller paid for the home and what they owe on it. Your agent grills the listing agent to find seller hot buttons. You construct the perfect negotiation strategy, and submit your offer, ready to get the deal of a lifetime.
Then you get the call, and hear the crushing news that more buyers are hearing these days: "We have received multiple offers. Please submit your highest and best offer by tomorrow at 5 p.m."
So now what? A good listing agent won't tell you much about the other offer. It could be $20,000 less than yours or $20,000 higher. There could be one other offer or four. You're going to have to put your best foot forward. Here are three tips to help you fight for your new home and win:

#1 Remember: It's not all about money
Sometimes it is about timing. Pick a closing date advantageous to the sellers. Can you close quickly, saving the sellers money? Or can you close later, giving them time to find a new home? Find out what matters to them.
Have your agent select a brief (five days or less) attorney review and inspection period. This will minimize the amount of market time a seller could potentially lose if you were to back out of the contract as a result of something found during the inspection. It will also give the seller more time to confidently search for a new home.
Important: This requires you to have your act together. Who's your inspector? Who's your attorney? Call both of them before you put the contract in so you still have time to do your due diligence. Finally, make a large earnest money deposit - say 5 to 10 percent of price - to show the sellers you're serious. They know a buyer with some skin in the game is less likely to jerk them around and then bail on a contract.

#2 Make the seller like you
An offer with a well-written cover letter stands out, and it never hurts to try to relate to a seller. Are you newlyweds buying your first condo? Are the sellers moving out because they just had their first child and need more space?
Great. Play up the nostalgia. Have your agent tell the sellers a bit about yourself and why you like their property. When evaluating multiple offers as a listing agent, I find this is a nice touch. Agents often fire off contracts with no cover letter and little presentation. This gives the impression that their clients aren't as committed to buying the property, and I'm likely to convey that to a seller.
Then, go back to #1 and make sure your agent emphasizes those points in the cover letter. Tell them what you do for a living and how thoroughly your lender has pre-qualified you (Tip: get thoroughly pre-qualified). Sellers should get the impression that you are a buyer with no potential financing issues who is committed to buying their property.

#3 Pay what the property is worth to you
This one should go without saying, but sometimes buyers get caught up in the emotions of the process. Overpaying for a property isn't winning, and neither is stubbornly sticking to a lowball offer.
Have your agent put together a detailed comparative market analysis to determine the fair market value of the property. From there, as I always say: "add love, subtract fear." It's okay to pay a touch more if you really love the place, especially if you've been looking for awhile. But keep in mind, the property will need to appraise for this price if you're getting financing. And it's okay to bid a bit less if you feel you have other strong options.
I took a buyer to see three condos that each had been on the market for three months. That was a Thursday. My buyer left for the weekend to go skiing. When he came home, all three had offers in on them, and two of them had multiple offers. That's the residential housing market in Chicago right now.
My final word of advice: "buyer be ready." Get all your homework done before you make that offer. If you want to survive in this sellers' market, you have to be ready.

Where Angelinos love to run...

 Now this is a cool map! Check it out to see just where Angelinos love to run.

 

Using data from run-tracking app RunKeeper, Nathan Yau of FlowingData (via Deadspin's Regressing) has created very pretty maps showing where people (who use the app) run in 22 different cities. He writes "If there's one quick (and expected) takeaway, it's that people like to run by the water and in parks," and that's certainly true in Los Angeles, where you can see the path by the LA River, the area around Elysian Park, the Silver Lake reservoirs loop, and Echo Park Lake are all a dark purple. But people apparently also love to run around the Downtown street grid (and down to USC), and on Los Feliz and Sunset Boulevards. Westsiders all run at Equinox apparently. Yau says that besides being cool to look, the maps could also be useful to "city planners who make sure citizens have proper bike lanes and running paths."

More info here:  http://flowingdata.com/2014/02/05/where-people-run/