Yup, that’s right, PO boxes lower your average credit scores so avoid them if you can.  We have also found that muliple addresses on your credit reports can also lower your credit scores.  Here’s why…

The credit bureaus are looking for things that will make them believe you are a low risk individual.  So, they look for things like people with only a few address or only one address.  Why? Well, if you move around a lot and you have 5, 10 addresses, does that make you look stable?  What about a PO box?  Does that make you look stable.  Apparently not because the credit bureaus will lower your credit scores because you are using one.

It’s better to use an office address or a parent or siblings address instead of using a PO box.

Credit limits are an important factor in your credit score because of the debt to credit limit ratio. The lower the ratio the higher your credit scores because the credit bureaus want to see that you can control your spending. If you have a high credit limit and have the option of using up the entire credit limit, but don’t, then you become a low risk user and deserve to have a higher credit score interpretation.

The solution then is to increase your credit limits and keep your balances low. The higher the credit limit with a low balance, the lower the debt to credit limit ratio the higher your credit scores.

There are home purchases we make sometimes that require a special loan that can be very costly to our credit score and trans union. The main reason is that we are getting in over our head with a debt we can’t afford. The loans that are offered are interest only, buy down loans, adjustable rate mortgages, and option adjustable rate mortgages. Each of these spells disaster if we really can’t afford them and the slightest glitch in our income with cause a ripple effect with other debts and loans that you might have. The cost of coarse would be that you have lates, then can’t pay at all, foreclosure with loss of house and home and perhaps even bankruptcy. The ratios by mortgage lenders to give you only so much mortgage to so much debt is because the ratios have proven themselves to be correct.

The solution is to go to your mortgage lender and get pre-qualified to find out how much you can afford and then go shopping for a and don’t go over the amount you qualify for. This will keep you safer in affording the home you purchase and the mortgage you can get with the lowest rate possible. A fixed rate always seems to be a better, safer way to go than any exotic type mortgage.

NOTE – there are interest reduction programs out there that help to reduce interest of all kinds to pay off your total debt in 1/3^rd the time of conventional financing. You will pay 2/3rds less interest by comparison when dealing with these companies. Your spending habits will hardly be affected. In fact, it’s letting your money work for you instead of you always working for your money. We suggest going to the back of this book and see whom we recommend to talk to and get some information about saving even more money. Some we know have saved hundreds of thousands of dollars and paid a 30 year mortgage and credit card debt in as little as 7 to 10 years. Kind of a no-brainer.

Home purchase is another area where many people go and shop for a loan thinking that the inquiries won’t hurt them. Again, pull your own credit at www.MyFico.com, print it out and take it with you to shop for a loan. The lender will see everything he needs to see to make a preliminary decision before you decide to go with them and then they will need to pull your credit. They would need to do it anyway if you are going to use them as a lender, so it’s ok to do.

Having a mortgage on your credit report is a good thing and will boost your credit scores. Getting the loan down below the 80% debt to credit ratio is good and will help to boost your credit scores. Not having too many inquiries is a good thing and will keep your credit scores from dropping. Keep all these things in mind and go get the home of your dreams and live happily ever after.

NOTE – As a former loan officer, I had a couple come in after shopping for mortgage companies to get a loan for them. They had started loans with 4 other companies and finally came to us because they heard that we could do hard cases. Well, the couple had shopped so much that their credit scores explained had dropped below where they could get a loan from anybody because of inquiries. The drop in score was over 80 points. Another couple went online with one of those mortgage-shopping services. When all was said and done, their score dropped over 120 points just from going to one mortgage shopping service and having their credit pulled by 27 companies. Beware, do your own shopping with your own credit report with scores.