Give your credit score a makeover

A few moves could improve your rating and even save you some cash. Gerri Willis explains.
By Gerri Willis, CNN
March 21 2007: 1:53 PM EDT
NEW YORK (CNNMoney.com) --

Your credit score can be the difference between getting a good home loan and getting stuck with higher monthly payments. And with lenders tightening their standards, it's even more important that you improve your credit score as much as you can. We're going to tell you how.
Most mortgage lenders look at your FICO score. What exactly does this score take into account?
Your payment history, which makes up the biggest chunk of your score, looks at how often you pay your bills on time. The amount of debt you owe is considered equally important. The amount of time you've had your credit cards and how much new credit you apply for all play a role in determining your score.
1: Pay off your debt
You want to aim for a score in the 700s to get more favorable loan terms. The national average, according to Fair Isaac, is a FICO score of 723. And the best way to improve your credit score in the short term is to pay off the high balances on your credit card - that can raise your FICO score 60 to 70 points overnight, says Craig Watts of Fair Isaac.
Credit bureaus can predict how much of a credit risk you are by how you handle credit card debt more than any other kind of debt, like student loans. That's because with installment loans, like mortgage payments, there is a predetermined amount you pay each month. With credit cards, you're in control of what debts you have.
2: Minimize your balances
Even if you pay your bills off every month, the amount you paid will be listed on your credit report. And if you spend more than 50 percent of your credit limit, that's going to negatively impact your score. In fact, you could lower your score 60 or 70 points, says Watts.
And that could make the difference between getting a good mortgage rate and a bad one. If you're within three months from applying for credit, make sure you don't charge a lot on your cards, or split the purchases between a few cards, so you keep the balances down.
3: Hang onto older cards
As we mentioned, your FICO score looks at how long you've managed your credit. So the longer you've managed your credit wisely, the better your score. If, for example, you have a card that is at least 5 or 6 years old, it's not a good idea to close those accounts.
At the same time, opening any new lines of credit - whether it's a retail credit card or a new car loan - will almost certainly lower your score by a few points.
4: Don't sweat the little things
We've already told you what impacts your score. But here are some things that don't matter to your score at all. Your score won't be affected if you request your own credit record, or if you go for credit counseling.
It also won't impact your credit score if your employer or other lenders look at your credit score and try to solicit your business.

Field Guide toEscrow Accounts/Earnest Money

Field Guide toEscrow Accounts/Earnest MoneyBy Kerrie Bartlett Walsh, Senior Marketing Specialist



C O N T E N T S
Escrow AccountsEscrow AdministrationEarnest Money DepositsEscrow Fraud and Real EstateCase Summaries - Escrow MishandlingBooks, eBooks & Other Resources


Escrow accounts are funds that a lender collects to pay the monthly mortgage insurance premiums, homeowners insurance policy premiums and yearly property taxes. Earnest money, on the other hand, is a good faith sum of money given to bind a contract, for example an agreement to purchase real property or a commitment fee to assure an advance of funds by a lender. This field guide will provide you with details on escrow accounts (from the basics to escrow administration) and earnest money as well as information on escrow fraud. You'll also uncover a variety of case summaries on escrow mishandling, in addition to the numerous digital resources available from the Library's eBooks collection.
WHAT'S THE PASSWORD?
- Articles marked with a red Q are provided by ProQuest for NAR members only. Please enter NAR's Proquest password if required.
- Articles marked with the REALTOR® "R" are available on Realtor.org. Your Realtor.org ID and password may be required.


Escrow AccountsHow the term escrow relates to your real estate transaction, (About.com, 2007).Escrow account - everything you need to know, (Mortgage-x.com, 2007).The new word in home sales - "cancelled" - buyers back out of deals in record numbers, a $30,000 deposit lost, (The Wall Street Journal, Nov. 3, 2006). FAQs about escrow accounts for consumers, (U.S. Department of Housing and Urban Development, June 20, 2005).Do it yourself, (Kiplingers, Mar. 2003). How to keep escrow shocks to a minimum, (Money, June 1998). Escrow AdministrationEscrow and trust record keeping - 10 tips for safer escrow accounts, (REALTOR® Magazine Creating and Monitoring Business Systems Toolkit, 2007). 6 musts for escrow and trust record keeping, (REALTOR® Magazine Creating and Monitoring Business Systems Toolkit, 2007). Post-contract pitfalls, (www.realtor.org, Mar. 24, 2006).

Know Your Client's Rights - Six Must-Know Escrow Facts
Escrow instructions should specify in writing how and under what conditions monies will be disbursed, especially if the transaction doesn't close.Escrow is a fiduciary relationship but is limited to the duties involved in the escrow. The escrow agent is a trustee of both parties and is equally responsible to both parties for the administration of the escrow. If a transaction fails to close as scheduled, monies may continue to be held in escrow provided there is no written demand from one party to cancel the contract. Monies are typically held after the closing date if a date to obtain the loan has passed but the parties still want to proceed with the transaction.If the transaction is cancelled by either party, the agent holding the escrow monies shouldn't disburse any funds until all parties agree in writing how to disburse them.If parties can't agree on how to disburse funds, the escrow agent may file an interpleader, which names all the parties that might have an interest in the monies and asks a court to decide how to disburse the money. Otherwise, an escrow agent may be obligated to keep funds indefinitely.If a transaction is cancelled by the parties, real estate brokers and other third-party vendors may have first claim to escrow funds. That claim would depend on procuring cause.Source: The list issue: legal - 6 must-know escrow facts, (REALTOR® Magazine, March 2005).


Earnest Money DepositsThe earnest money deposit, (RealEstateABC.com, 2007).Earnest money deposits - protect your good faith deposit, (About.com, 2007).Questions and answers on earnest money deposits, (North Carolina Real Estate Commission, 2007).First-house buys can knock you off your foundation, (Washington Business Journal, Apr. 21, 2006).


Escrow Fraud and Real EstateMortgage scams: real estate closing fees kickback scams, (www.fraudguides.com, 2007).Growing ownership makes Hispanics target for predatory lending, (The Business Journal of the Greater Triad Area, Oct. 20, 2006).Title companies investigated, again, (Realty Times, Mar. 1, 2005).Don't be a victim of loan fraud, (U. S. Department of Housing and Urban Development, Aug. 18, 2