How to Massacre Your Credit Score

Here are some of the things that consumers do that all but massacres their credit score. Again, they know the broad picture, but not the details. Many consumers know that there are some actions or inactions that they can take that will help or hurt their score.

Credit reports are not static. This is one of the most important reasons why consumers must keep an eye out for mistakes or omissions on their reports. First of all, consumers should understand that lenders and creditors are constantly updating the information that is on a person 's credit report.

Some actions or inactions that can kill a credit score follow:

Not examining credit reports often enough is one of the most common problems that consumers face. These reports are used to determine your credit score. If there are mistakes, you need to get them corrected. The truth is one in four credit reports contain errors that are serious enough to hurt a consumer 's chances of getting loan.

FICO credit scores are calculated from five categories listed on credit reports: your payment history, amount of money owed, length of credit history, new credit obtained, and types of credit used.

The second thing many consumers do to hurt themselves is to pay late. Late payments are recorded on your report and they usually stay there for seven years. In general, payment history accounts for 35 percent of the credit score.

The third thing that can cause problems is simply having too many credit inquiries. A credit inquiry occurs whenever someone wants to look at your credit file.

Rate shopping for a car loan, a home mortgage, or a credit card can damage your credit if it is not done properly. Lenders you approach ask credit bureaus for a copy of your report for review. This request shows up on the credit report as a hard inquiry, which affects your credit score.

Minimize the potential damage by rate shopping within a short period of time, such as a couple of weeks. According to myfico.com, "Multiple inquiries from auto or mortgage lenders in a short period of time are typically seen as one inquiry and have little impact on your score."

Believe it or not, closing your old accounts can damage your score because, in essence, doing so may shorten your credit history. Credit history makes up about 15 percent of the score, so you do not want to shorten it unless it is absolutely necessary.

Closing accounts will also affect what is called the credit utilization ratio. This is the amount of credit you are using relative to the amount of available credit you have. Closing an account will cause your ratio to go up because closing the account drops your total available credit while not reducing the amount of credit you are using.

Consumers should be very aware of the amount of debt that they have on the books. Amounts owed will make up nearly 30 percent of the score. The more you owe, the lower your score will be.

If the other person does not pay on time you will most likely see a reduction in your credit score. Lastly, consumers should be careful about cosigning for another person.

Keep track of what is on your credit reports and you will have done a lot to maximize your credit score.

Refinancing Solutions Provided By Canadian Mortgage Brokers

Do you renew your mortgage with your existing bank or lender, or should you shop around to see if better rates and terms are available from another lender? Home owners face a perennial refinancing decision each time the term on their existing home mortgage expires.

Difficulties can arise, however, when there has been a material change in the borrower?s circumstances. Mortgage renewal is a no-brainer for a bank?s loan officer, who is often able to shave a half-point of interest off posted rates or match the offers of competitors who are trying to entice an existing borrower to take his or her business down the street. particularly if the borrower does a little leg work and finds out the competitive rates from other lenders. Most banks and institutional lenders will offer their existing borrowers competitive interest rates when it comes time to renew a mortgage ?

The two instances in which borrowers are most apt to run into difficulties securing refinancing from their existing lender are when (a) their employment profile or income stream has changed, and (b) when the price of their home house prices has decreased in value. While the Canadian housing market has stabilized and house prices have maintained their value and continue to grow, albeit at a more moderate rate, there are some local markets where housing prices have dropped. Moreover, there has been a general tightening in Canadian lending practices as credit markets have tightened globally due to turmoil in the U.S. mortgage and housing markets. As a result, some Canadians who have less than optimal credit scores, who have been affected by job losses and/or who have seen the value of their homes drop are reportedly facing greater than normal difficulties in obtaining refinancing for their existing mortgages.

Borrowers from banks and other federally regulated lenders are required to purchase mortgage insurance for high-ratio mortgages where the value of the mortgage exceeds 80% of the value of the mortgaged property. As a result, some homeowners who have seen the market value of their property drop below the high-ratio mortgage threshold may be required to obtain mortgage insurance from the Canadian Home Mortgage Corporation, or one of the private federally recognized mortgage insurance companies. Obtaining mortgage insurance can prove difficult in such circumstances for individuals with a bad credit history and poor credit scores.

?People with a shaky credit rating, who relied on so-called 'B' lenders for a mortgage, could be left scrambling to find a new lender if their mortgage is coming due soon,? according to Chatham, Ontario?s Daily News. Homeowners in some Ontario cities affected by manufacturing job losses and falling housing prices have reportedly fallen into the gap created when they go to refinance with federally regulated lenders who now require mortgage insurance, but mortgage insurance is not commercially available based on their financial circumstances and/or past credit history.

for people looking to refinance with poor credit. People with poor credit finding themselves unable to renew their mortgage is "happening quite frequently now," reports a local Chatham, Ontario mortgage broker, noting that the ?market is very, very shallow right now? Home owners experiencing difficulties in obtaining refinancing, as well as savvy consumers looking to find the best rates and terms available from competitive lenders are increasingly using the services of mortgage brokers when it comes time to refinance.

Most often Canadian mortgage brokers are able to find a refinancing solution that banks cannot offer, and are often able to offer homeowners better terms and rates for refinancing than are available from the bank that holds their current mortgage. Rather than relying on loan specialists at their local bank to obtain refinancing, home owners - particularly individuals with marginal credit scores and credit difficulties - are turning to mortgage brokers who offer a much, much wider of mortgage products from a broader spectrum of publicly regulated and private lenders.