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Ways to Improve Your Credit Score

by Scott Darling

Your credit score is a number that helps lenders predict how likely you are to make your payments on time. This score affects your ability to obtain credit and helps determine what you pay for credit cards, auto loans, and mortgages on Chester County homes. Even your insurance rate is related to your score. The higher your score, often referred to as a FICO score, the more apt you are to be approved for and pay a lower interest rate on new loans. Scores ranging from 650 and below are considered bad and indicate to the lender that you are a very high risk. Chances are you will be unable to secure a loan, or if you are, it will be at a much higher interest rate and/or require a cosigner.

credit reportWhat If there Are Errors

What to do if you have a low score and do not qualify for a mortgage on a Chester County home? Your first action should be to check your credit report for errors. If you find erroneous information, you need to act immediately by contacting both the credit bureau (the three major ones are Equifax, Experian, and Transunion) and the organization that provided that information.

  • The credit bureau/agency: Send a certified, return receipt requested letter to the bureau pointing out each inaccuracy and enclose copies of documents which support your claim as well as the report itself (with the misinformation highlighted). Factually explain why you dispute each item and request a deletion or correction for each one.
  • The creditor or information provider: Send the same type of letter and enclose the same documents. Request that the provider notify you of action taken (generally within 90 days) so that you can verify the amended information.

If there are no errors on your report, then you should take immediate steps to improve your credit. Ways to do this include the following:

  • Stop using your credit cards. Do not continue to accumulate debt.
  • Get current on delinquent accounts. Since payment history makes up 35% of your score, this action will have a great impact on your score.
  • Keep accounts with balances open, but don’t apply for more credit.
  • Call your creditors. Explain your financial situation and ask about possible hardship programs which will temporarily reduce your monthly payments.
  • Begin paying off your existing debts, even if you have to sell some belongings to do so. Come up with a get-out-of-debt plan and stick to it.
  • Get professional help. There are resources available to help you reestablish a good credit rating. Contact the National Foundation for Credit Counseling for assistance.
  • Be patient. Realize that improving your credit score takes time and that there is no quick-fix --and keep in mind your goal of owning a Chester County home.

Chester County Real Estate Sales Statistics - Oct 2010

by Scott Darling

Nearly eight out of 10 Americans believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. That’s according to the 2010 National Housing Pulse Survey, an annual report released by the National Association of Realtors®.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership.

Despite economic uncertainty, 68 percent of those surveyed still believe now is a good time to buy a home; while that number is down from last year (75 percent), it’s up from 2008 (66 percent) and 2007 (59 percent). Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market – more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40 percent said it was one of their highest priorities.

Lower home prices have improved affordability. Let’s take a look at October home sales and see how improved affordability is affecting our local housing market.

Downingtown Area School District saw a 15% increase in the average sales price in October 2010, compared to October 2009 to 382,776.  Pending listings have decreased by 44% and sold listings have decreased by 38%.  There was a 33% decrease in active listings, while market times increased by 15 days.

Downingtown

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Oct 2010

62

35

33

$382,776

87

Oct 2009

93

62

53

$324,662

72

In the West Chester Area School District, there was an decrease in Sold listings  of 37% when compared to October 2009.  And pending sales decreased by 33% in October 2010 when compared to October 2009.  Average sales price increased by 13% to $366,132 and active listings decreased by 13% from October 2009.  Market times have increased by 28 days.

West Chester

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Oct 2010

117

64

55

$366,132

90

Oct 2009

132

96

87

$317,489

62

Active listing have decreased by 23% in the Coatesville Area School District in October 2010 when compared to October 2009.  The average sales price decreased by 2% to $205,612 and sold listings decreased by 39%.  The number of pending home sales decreased by 47% when compared to October 2009, while homes were on the market on average 6 days more than in October 2009.

Coatesville

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Oct 2010

90

36

37

$205,612

97

Oct 2009

117

68

61

$208,832

84

A word of caution...markets within a school district can be very different from neighborhood to neighborhood. For the latest Chester County PA real estate market conditions in your neighborhood, please call me at 610-564-SCOT or visit ChesterCountyHomeSource.com.

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Photo of Scott Darling Real Estate
Scott Darling
RE/MAX Action Associates
403 W. Lincoln Highway #101
Exton PA 19341
(610) 594-SCOT
610-363-2001
Fax: (610) 363-5275