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    Don’t Ruin Your Credit – The Stephen Cooley Real Estate Show

    In today’s episode of the Stephen Cooley Real Estate Show, Stephen and Julie Storm talk about people’s credit and its effects on buying a home. In this video you will hear about 10 things you can do to get control over your credit.

    Here are just a few top tips:

    • make your credit payments on time
    • do not consolidate credit cards
    • do not close credit cards
    • avoid bankruptcy
    • negotiate with credit companies that you owe to

    For more useful information watch this video:

    Prefer to read? Here are the transcripts of the video:
    (Please excuse spelling and grammar errors)

    STEPHEN: Hello I’m Stephen Cooley and welcome to the Stephen Cooley Real Estate Show and it’s always an honor to have Julie Storm on the show with me. Welcome back to the show Julie.

    JULIE: Thank you Stephen, pleasure to be here.

    STEPHEN: We’ve been giving great information out for 18 years about local real estate and we’ll continue to do it today.

    JULIE: Yes, so I understand you’ve got an interesting topic today talking about people’s credit and how that affects maybe buying a home, some people think they can’t buy a home because of their credit and you’ve got some great examples and some good advice, so I’m interested to hear about that.

    STEPHEN: Yeah, thank you for bringing that up. Julie when interest rates are higher a lot of time in your house payments rent runs around the same thing but because interest rates are so low right now and rent has gone up so much you can own cheaper than you can rent. We just had a situation where some folks were renting a home and the landlord decided to sell the home that the renters were living in and the renters wanted to buy the house and so they were paying 1,500 a month rent and we sold them the home that they were already living in and now the payment to buy the home is less than 900 a month. So they’re saving over 600 a month by owning the home and this is even before they now are able to write off their payments, the interest in their payments. And you can’t write off rent and so they’re saving almost 600 a month over 12 months it’s over 7,000 a year that they have saved and now as the home appreciates in value they get the appreciation instead of the landlord. It’s just a great opportunity. A lot of folks, not everyone but a lot of folks are renting because their credit is not perfect. We’re offered credit cards now in high school and college and I haven’t seen a course that teaches you how to manage this credit that you’ve been offered and so once you have a credit card it’s very tempting to go out buy all the things that you really wanted and a lot of young people are getting their credit deigned early in life and then they have to rent so I just came up with about 10 things that you can do to get control over your credit and of course the best thing to do is never overextend your stuff in the first place. It’s fine to have credit cards that actually help your credit to have open lines of credit but if your credit card limit is $5,000 the less you owe on that limit the more space they see that you don’t abuse so it helps your credit. Opening a credit card, having a five or ten thousand dollar limit on it and then having a very low balance using the credit card but keeping a low balance or paying it off every month does wonders for your credit.

    JULIE: Shows a little bit of stability there.

    STEPHEN: Absolutely and the first thing I just want to say is you know some of us are just chronically late. I’ve got friends who are chronically late. My one great thing is I’m on time and my one pet peeves is people who aren’t but a lot of people run late on making payments. They make their older payments every time they make them a day or two late and that destroys your credit. So number one is just make your credit payments on time, make sure when you mail it if you’re not doing it online you’re getting room for it to get there before the deadline. One day, two day, three day late payments ruin your credit.

    JULIE: Maybe you should set a reminder on your phone or something to say ‘make a payment’.

    STEPHEN: Absolutely, stop charging is the best way to start reducing debt and that is just a simple thing that a lot of people don’t understand. Reduce credit card debt and I’ve just talked about that if you’ve got a $5,000 limit the more space you lived there that you don’t use it’s a sign to the credit companies that you can manage money. But if you’ve got a $5,000 limit you keep it at 5,000 that just proves that if they gave you a 10, you’d spend 10. Don’t apply for new credit. When you go into the mall everybody says would you like a blank card and it’s the name of the card. Just opening those cards can hurt your credit. You should have a credit card or two but having one to every department store and every gas station will hurt your credit. So don’t do those. Do not consolidate credit cards because it will take the balance of one credit card so high that it hurts you. Do not close credit cards. The better way to improve your credit, now close all credit cards but I’m not trying to get my credit any higher. If you’re trying to improve your credit quickly, reduce the debt on the credit cards to zero if you can then put the credit cards in a drawer and close the drawer. Don’t close them because having an open credit that you don’t use is a great sign that you are a great credit risk. If you’ve gone through a relationship breakup whether it’s the divorce or anything and if you’ve combined any accounts or any credit, separate those quickly because when that person is no longer in your life you don’t know what they’re buying and what they have control over which leads into something else do not cosign for a house, a car, credit cards or anything unless you’re going to make sure those payments are made and made on time because the person you co-signed for may be one of those folks that makes a payment a day late and the next thing you know you go and buy a home and you’ve got bad credit.

    And you said well oh I co-signed for someone, we have that happen so often. We want to help young people get their cars and get credit cards and get houses and cosign for their leases but when they make late payments that destroys not only their credit but yours. If you’re hurting your credit that’s one thing if you’re letting other people hurt it that’s another thing and it’s a very common thing that happens. Get a credit – go online and get a free credit report and correct anything wrong on it. Wrong things appear, you can appeal them and get them removed almost all of us at some point in our life gets something wrong on our credit so if you see something on there just get it off and apply for that. Do not apply for a lot of credit checks though because that can look like you’re up to something to them. At all cost if you can avoid bankruptcy because bankruptcy absolutely destroys your credit much worse than anything else. The last thing is negotiate with credit companies that you owe to. If it’s a medical bill, if it’s just something you haven’t paid and it sits in your past call them and see if they will negotiate the payoff and when they negotiate that get in writing that they’re settling for a lesser amount and that they will remove it from your credit score and oftentimes they will negotiate that not all of everybody you owe will negotiate that but if you haven’t paid somebody that helps you for almost ever and so if you will call and negotiate that sometimes they’ll take less money and then they’ll take it off your credit score. So those are just some things that can get some folks who are renting that’s iffy on the credit and then reach out to us we’ll put you with a mortgage lender that will then pull it up and say okay pay this off, don’t pay this off, do this and do that and it’ll bump it up one more time and then you qualify for a loan. There’s some loans out there for people with challenged credit it’s just higher interest rates and we want to get you in that low interest rate which requires a better credit store. Hopefully this is good information, your credit is everything when buying a home.

    JULIE: That’s one thing that I always taught my son, please never ruin your credit, pay your bills first.

    STEPHEN: Absolutely, young people need to hear that because we’re recovering from it, it’s a very difficult time.

    Thanks for coming by and visiting with me today and thanks for watching today’s show. We’ve got beautiful homes for sale in your area, please stay tuned and we’ll be right back. I hope you’ve enjoyed watching the Stephen Cooley Real Estate Show. If you’re interested in advertising your business on the program, please give us a call at 803-326-2777.

    Join us next week for more discussions on real estate topics and help in finding your perfect home. Thanks for watching.

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