Laure Feld, President
- PEORIA, IL, October 16, 2007 - By increasing their scores, borrowers often secure loans at better terms and lower rates than they would with lower credit scores.
"It used to be that there was very little that an individual could do to affect the underwriting decision," explains Laure Feld, President of American Mortgage Lending, Inc., a mortgage brokerage company based in Peoria, Il. "But now, I inform my clients that they can improve their credit scores and thereby save tens of thousands of dollars over the term of the loan. I have seen many borrowers go from denied to approved, in fact."
Feld is conducting a series of FREE Telephone seminars educating families on credit and credit scores. Improving credit scores can save families thousands of dollars annually in lowering insurance costs and mortgage interest rates.
There are several simple steps that borrowers can take to raise their credit scores on their own, but consumers have avoided taking many of these actions simply because they seem counterintuitive based on hearsay and erroneous assumptions about the intricate and complex credit scoring process.
The first step is to check your account balances. According to the Fair Isaac Corporation, the leading provider of decision management solutions powered by advanced analytics, 30 percent of an individual's credit score is based on amounts owed. Incorporated in this equation is not only the outstanding debt itself, but also the debt ratio of the account in question. Therefore, consumers wishing to increase their credit scores should check their credit limits and evenly distribute the balances they're carrying so that each balance accounts for a minimized debt ratio. If the maximum limit for each account is not reported, the credit scoring software will evaluate the account as though it's at its limit, which makes the borrower appear to have an unreasonably high debt ratio. Lower debt ratios are more favorable. According to an article by Cheryl Allebrand on bankrate.com, a good rule of thumb is to keep credit card balances to 30 percent or less of their limits.
"Reallocating debt is a fairly simple action that a borrower can take to make a definite impact on his or her credit score," says Feld. "Even though it's very simple, it can really make a powerful difference. In some cases, this can be the difference between a great rate and a less-than-favorable one."
Laure Feld, has passed the qualifying exams to earn the Certified Mortgage Planning Specialist (CMPS) designation granted by the CMPS Institute, Ann Arbor, Michigan, a training, certifying and ongoing membership organization created to help mortgage professionals integrate financial planning concepts into the mortgage process. CMPS designees can offer clients strategies that encompass mortgages, debt, home equity and real estate investment.
"My focus is to help my mortgage clients build and protect wealth by better managing their home equity and personal cash flow."
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