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Answering all those burning questions you didn’t know you had about home ownership.

Credit Mysteries, Explained (Part 2 of 2)

Picture of Jessica Dabkowski

Jessica Dabkowski

Helping you with all things homeownership!

This week we’re tackling Part 2 of Credit Mysteries, Explained. If you missed Part 1, you can catch up HERE.

Start Monitoring Your Credit Score Today

Not knowing your credit score can lead to an unpleasant surprise when you apply for a loan.   In this age of ID theft, you need to watch your credit like a hawk watches a rabbit.  (How is that for aggressive imagery?)

You should monitor your credit…basically continuously. You should get hyper-vigilant about your credit score about 3-6 months BEFORE you start looking for a home or plan to refinance. The earlier you start, the more time you can repair any credit issues or call in the clean up crew, if necessary.

It’s easier now than ever to track your credit score. You can sign up online for or other credit monitoring companies.  The other big one is  It is a great way to get an overview of your credit report and to find out which factors are driving a low score.

That being said, I have had a lender tell me she has seen a 100 point swing in a person’s score between their Credit Karma scores and their official FICO credit pull.  The best way to ensure your score is accurate is to review your credit report with each of the credit bureaus and make sure it is up to date. (Technically, there is a fourth credit bureau but no one ever remembers its name or that it exists, poor guy.)  

You are entitled to one free copy of your credit report from each of the three credit bureaus every 12 months. You can get it through Most experts recommend you stagger these reports so that you get one every four months, which is a good way to regularly monitor your credit reports for free.

Put Your Credit on ICE (ICE, BABY)

While we are talking about the credit bureaus, consider whether you should freeze your credit at all three bureaus.  After the great Equifax hack (debacle?), people became much more aware of how much information the credit bureau had about us.  

Credit freezes are easy to place and lift with each bureau.  A freeze prevents an unauthorized person from applying for new credit in your name.  

The Mathematician recently applied for a new card, and it took me about 8 minutes to complete a 1-day lift on all three of his credit freezes.  The credit freeze automatically snapped back into place after 24 hours so I didn’t have to go back in and lock them down.

TIP FROM DABS:  When you place a freeze, the credit bureau will issue you a pin to use when you remove the freeze.  DO NOT, under any circumstances, LOSE THIS PIN!  

Today’s advice comes from the wisdom of experience.  The last time I went to purchase a car, I could not find my pin to unlock my Equifax credit.  I called to verify my identity over the phone…AND I FAILED!  

I failed my own identity test.  Remember that Capital One card I talked about in Part 1?  I hadn’t used the card in years, so of course I couldn’t tell the guy the credit limit on that card.  What kind of obscure question is that anyway?!  So I failed and they had to mail me my pin because I couldn’t prove my own identity.  

Now that I have had my rant for the day, let’s move on.  

How to Raise Your Credit Score

If you need to impress a potential lender in the coming months, here is the 411 on how you can improve your credit report and increase your score:

  • Analyze why your score is low, and then create a plan of attack to rectify the issue.  The bureaus and sites like Credit Karma will often tell you exactly which component of the formula is dinging your score.  
  • Make payments on time, all the time. No matter if it is a few dollars or thousands, a late payment will hurt your score. Your payment history makes up 35% of your FICO score. (That’s why in Part 1, I referred to this one as “the Big Daddy.”)
  • Increase your score by having a higher credit limit on your cards but maintain a low balance. The credit bureaus want to see that you have available credit you aren’t using. Even though it sounds counter-productive, go online and request a credit limit increase … but don’t actually use the extra credit they give you.  This is one of those tricks that feels shady but is totally allowed!  By increasing your limits, your credit usage percentage lowers, which can boost your score.  
  • Never make major purchases during the time of your loan process.  Remember the 10 Commandments to maximize purchase power? Now is not the time to buy a boat and have more credit inquiries on your report.  If it looks like you are racking up new debt, it could lower your score and make potential lenders nervous.
  • Think twice before you cancel a credit card. You can increase your score by continuing to build on years of positive account history, showing that you have handled credit responsibly.
  • Keep credit card balances low since high balances can affect your score. It’s best to keep your debt-to-credit ratio 30% or better yet (much better) even lower (divide your total balances by your total credit limits). This utilization rate is about 30% of your score.  Bonus points if you implement the trick I mentioned in Part 1 – pay off your credit card(s) weekly to keep your running balance low, low, low, low, low.  (Apple Bottom jeans, boots with the fur.  WITH THE FUR!)
  • Negotiate with creditors if you’ve been a good customer in the past and then had one or two late payments because of unemployment or other circumstances. You can ask for a “good-will adjustment” and have them remove that blunder from your report.  This scenario is the one where you catch more flies with honey.
  • Look out for errors or anything suspicious on your credit reports that could affect your score. You can dispute any information that is not correct, and the credit bureaus will work with you to fix the report. (Okay, let’s be real, you will need to badger the heck out of them until they fix it just to make you go away.)
  • Pay off your parking tickets and even library fines. You don’t want these “trivial” fines to be turned over to a collections agency. These little slip-ups could do significant damage to your score.  (I’m looking at you, City of Plymouth residents!  I think like 80% of the city’s operating budget comes from parking tickets.)

Being proactive and protecting your credit score is MUCH, MUCH easier than trying to repair your score after the fact.  However, if your score isn’t great, it is never too late to get starting on repairing your credit.  

This wraps up our series on credit mysteries, explained! Now that you know everything about how your credit score is determined and how to increase it, you’ll be on the way to getting the best interest rates and loan programs available.

As always, I’m here to help you with all your homeownership questions, goals and dreams!  Reach out if I can help you (or your friends!) with anything home-related.  

Photo by Olya Kobruseva from Pexels

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