It’s make it or break it time for some homeowners.  No one wants to get foreclosed on.  On average, foreclosures cost $50,000 and if you cannot afford it, the lender eats the cost, but lenders aren’t just going to hand you a fixed rate either.  The lender will want to see the entire picture what you spend and bring in.  If you have a $600 SUV payment, they will tell you to dump the car or lose the house.  They will also to tell you to get rid of cell phones and satellite TV.  A good rule of thumb is to be able to pay all your bills and have $200 left for emergencies.  If the math doesn’t work, some banks will freeze rates or extend your 30 yr to a 40 yr mortgage.  If that doesn’t work, ask for a ‘Deed in lieu of foreclosure’ which is a better way of handing the house off to the bank.

1. Credit Cards – Although you would like to pay them off every month, that’s not going to happen.  Avoid paying the minimum.  Try a card from a credit union, they have a lower rate.
2. Insurance Companies – Most have a claim limit, which means if you have too many claims in a certain period of time, your rate will raise.  Check with your agent.  It may be worth taking your car into the shop to get your ding fixed instead of a auto claim.
3. Think about dumping your agent for a website.  When my son put a Dixie cup in the toilet and caused a flood, my agent reminded me it was a ‘back-up’ since my policy didn’t cover floods.  You think a website or 1-800 # would tell you that?

You can get a copy of your credit report free if you get use the free function from each of the major credit reporting companies every four months.  Now a lawsuit settlement let’s you get your credit score as well.  In the past, the hitch to the free report was that you had to pay for the score.  To settle the lawsuit, Transunion is setting up a database for those who have had a credit card beginning in 1987 thru today (which is most of us).  Goto www.listclassaction.com to see what you have to do to get this free service.  But there is a catch.  This score is not your ‘FICO’ score.  It will be the Transunion version ‘Personal Credit Score’ which may differ from the ‘FICO’.  Overall, this will give you some idea of what you need to do to boost your profile.