Hilltop Mortgage recommends that consumers consider the following tips to improve their credit score before purchasing the home of their dreams.

1.      All credit card balances should be paid to below 30% of the available credit limit on the card.

2.      Do not consolidate credit card accounts to one or two cards and close out other accounts.  Consolidation of your credit card balances will noticeably distort the appearance of your credit utilization.  Having a low balance on several credit cards is better than having a high balance on one or two cards where exceeding more than 30% of your available credit limit would indicate you were a higher credit risk profile. 

3.      Keep your credit card accounts open and active by using your cards at least once every five months, even if it is for a tank of gas.  When you receive the bill for a credit card you do not use that often, make sure to pay the bill in full.   Do not close accounts without the advice of a knowledgeable mortgage broker, as doing so may negatively impact the balance of the variables weighed by the scoring model in assessing your risk profile and credit score.

4. Review your credit report for accuracy at least 90-days before applying for a mortgage. Have any inaccuracies reported and have outdated information in your credit file modified by that  specific repository by sending them a written dispute requesting the item be reinvestigated and verified as to its accuracy.  You may want to ask your mortgage broker how you go about filing a written dispute with the appropriate repository.   
   
5.  Have clear and concise documentation to support your claim about why you are filing a dispute request and mail that documentation to the reporting repository with a return receipt requested.  The Fair Credit Reporting Act states that the process to make necessary modifications will take approximately 30 days.  As of September 1, 2005, individuals can obtain a free copy of their credit report and profiles by contacting Equifax, Experian or TransUnion at their respective websites
   www.equifax.com 
                                     www.experian.com  
                                                                         www.transunion.com 

6. Paying off a collection account or judgment will not eliminate it from your credit file.  Paid or satisfied negative credit items will show a zero balance, but will not disappear from your credit file for a seven-year period from the occurrence of the negative item.  A late or collection account will still be reflected in your credit file even if it has been paid off recently, as it was late or did go to collection therefore it is accurately reported.

7. Opt Out. Go to www.OptOutPrescreen.com and choose to opt out of credit card offers in the mail for the next 5 years. This may have a positive impact on your credit scores.