How to improve your credit score

Are you or a client looking to secure a loan in the neare future? Sometimes real estate agents have three to six months working with a client before applying for a loan. This can be long enough to increase a credit score if the agent and the client understand how to do so.

We’ve compiled 5 Ways to Improve Your Credit Score based on the weighted areas that FICO (Fair Isaac Corporation) uses in most situations. Here is a pie chart that shows the breakdown:

1. Pay bills on time (Approximately 35%)

Payment history typically is a significant factor. It is likely that your client’s score will be affected negatively if they have paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on their credit report.

Most scoring models evaluate how late the payment is, how recently the late payment occurred, and how many late payments there are. A 90-day late payment last month will reduce a score more than a 120-day late payment three years ago. Late payments involving smaller amounts are not as significant as ones involving larger amounts.

The longer a person pays their bills on time the better their score becomes.

Paying off an account where there was a late payment will not normally remove it from a person’s credit report and it will still be still be evaluated to arrive at a credit score.

2. Limit outstanding debt (Approximately 30%)

Most scoring models evaluate the amount of debt your clients have compared to their credit limits. If the amount they owe is close to their credit limit, it is likely to have a negative effect on their score. Owing a lot of money on many accounts can be an indication that a person is overextended.

The most effective way to improve your client’s score in this category is to get them to pay down their revolving credit. A person with a high amount of outstanding debt can increase their score by 30 – 50 points by paying off 90-100% of that debt.

The credit scoring models have certain threshold levels to identify higher risks.

If a person has used 70% of their available credit they are perceived to be in the highest level of risk.

The next threshold is 50%. Reducing credit card balances to below 30% of the credit limit will save your client a bundle on interest charges.

Similarly, a person’s score will be higher if the balance is evenly spread out among all of a person’s credit cards instead of having the same total amount on just one card.

3. Preserve length of credit history (Approximately 15%)

Generally credit models consider the length of a person’s credit track record. An insufficient credit history may have a negative effect on their score.

Even someone who has not been using credit for very long can get a high credit score depending on their other factors.

Most credit scoring models consider both the age of a person’s oldest account and the average age of all of their accounts.

New accounts lower a person’s average account age and can have a greater effect on their score. Rapid account buildup is also considered risky behavior in most credit scoring models.

Instruct your clients to use every credit card they have at least once every six months to avoid having the card go inactive. Inactive accounts can be ignored by credit scoring software and the client may not receive the benefit of a low balance and a long and positive payment history.

It is a good idea to keep and occasionally use older credit cards to maintain a higher score, even if the credit card has an outrageous interest rate.

One thing that all individuals who have high credit scores possess is a credit account that is at least twenty years old.

4. Avoid recent credit applications (Approximately 10%)

Many scoring models consider whether your clients have applied for credit recently by looking at inquiries on their credit report. If a person has applied for too many new accounts, it may negatively affect their score. Not all inquiries are counted.

Inquiries by creditors who are monitoring an account or looking at credit reports to make a person a “pre-approved” credit offers are not counted.

When a person accepts a credit offer it’s treated as a “hard inquiry” that’s factored into the score, even though they may never receive the card or use the account.

Tell your clients not to apply for a card they’re not likely to get.

Also, a person can request and check their own credit report and credit score and it will not negatively affect most credit scoring models if the report was ordered directly from a credit-reporting agency.

Some scoring models differentiate between a search for a single home or car loan and a search for many new credit lines.

Inquiries can have a larger impact on a credit score if a person has few accounts or a shorter credit history. Inquiries remain on a person’s credit report for two years. Some credit scoring models only count inquires for the past twelve months. If a person had a number of inquiries and only a short period of time remains before they drop off their credit report it may be beneficial to wait to apply for credit.

5. Manage the number and types of credit accounts (Approximately 10%)

It is generally good to have established credit accounts. Someone who has no credit cards could be considered a higher risk than someone who has credit cards and managed them wisely.

The ideal number of credit cards to maximize a credit score is three to five. Having more will not necessarily significantly affect a person’s score.

A good general rule is to never close a credit card account unless it was created in the past two years and the person has over six credit cards.

Generally a mix of credit cards, retail accounts, installment loans and mortgage loans results in a better score.

A person shouldn’t open accounts or take out loans just to have a better credit mix.

Learn more about how to repair credit and how to protect you and your clients from identity theft by joining Larson Educational Services for Credit, Fraud and Identity Theft taught by Lynne Lovern, plus get 4 CE Credits if you hold a Florida real estate license.


Date: Friday, August 13, 2010
Time: 1:00pm – 5:00pm
Royal Palm Square
1400 Colonial Blvd, Suite 44
Fort Myers, FL 33907
Tuition: $28

Date: Friday, September 10, 2010
Time: 1:00pm – 5:00pm
Horseshoe Park of Commerce
3073 Horseshoe Dr S, Suite 114
Naples, FL 34104
Tuition: $28

Register by calling (239) 344-7510
CLICK HERE to register online


Understanding your credit score

Credit scoring is a system creditors use to help determine whether to give credit. Information about the consumer and their credit experiences, such as bill-paying history, the number and type of accounts, late payments, collection actions, outstanding debt, and the age of credit accounts, is collected from a credit application and credit report.

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles.

A total number of points – a credit score – helps predict how likely it is that the borrower will repay a loan and make the payments when due.
How is a credit-scoring model developed?

A random sample of similar customers is analyzed to statistically identify characteristics that relate to creditworthiness.

Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk.

The following table illustrates the five main categories of information that one scoring model, developed by the Fair Isaac Corporation, uses in most situations.

FICO scores range from about 300 to 850. A FICO credit score above 650 will help to qualify for most loans.

A person’s credit score cannot be evaluated or based on any of the following factors.

• Race
• Color
• Where you live
• Gender
• Age
• Income level
• Country of national origin
• Sources of income
• Religion
• Marital status
• Child/family support obligations
• Down payment information
• Savings
• Length of time in present house

Learn more about how to repair credit and how to protect you and your clients from identity theft by joining Larson Educational Services for Credit, Fraud and Identity Theft taught by Lynne Lovern, plus get 4 CE Credits if you hold a Florida real estate license.


Date: Friday, August 13, 2010
Time: 1:00pm – 5:00pm
Royal Palm Square
1400 Colonial Blvd, Suite 44
Fort Myers, FL 33907
Tuition: $28

Date: Friday, September 10, 2010
Time: 1:00pm – 5:00pm
Horseshoe Park of Commerce
3073 Horseshoe Dr S, Suite 114
Naples, FL 34104
Tuition: $28

Register by calling (239) 344-7510
CLICK HERE to register online


LAST DAY to apply for the current Florida Mortgage Broker License is July 8, 2010

The Florida Office of Financial Regulation (OFR) is shutting down the Mortgage Broker Licensing system on July 8, 2010.

The state of Florida is making the transition to become SAFE ACT compliant. If you don’t know what this means, check out my blog post from a few weeks ago –

This was just released by the Florida Association of Mortgage Professionals (FAMP):

TALLAHASSEE, Fla. (June 9, 2010) – On July 8, 2010, the Florida Office of Financial Regulation (OFR) will stop accepting applications for mortgage broker, mortgage brokerage business, mortgage lender and correspondent mortgage lender licenses, so that current applications can be processed before October 1. Beginning October 1, 2010, Florida will begin participation in the Nationwide Mortgage Licensing System, and all existing loan originators, brokers and lenders and mortgage business owners will be required to reapply for licensure. December 31, 2010, is the last day to apply for licensure.

“We encourage applicants to apply now so that they have a better chance of being approved before October 1. If unlicensed by this date, individuals will not be able to work in the industry until the new application is approved,” said Tom Cardwell, Commissioner of the Florida Office of Financial Regulation. “Applicants should submit information that is complete, correct and containing full-disclosure to minimize delays to processing their application.”


If you are:

• Unlicensed Loan Originator currently employed by a state-licensed Correspondent Lender or Mortgage Lender
• In-House Processor
• In-House Underwriter
• Contract Processor
• Account Executive employed by a state-licensed Correspondent Lender or Mortgage Lender


If you would like to know the steps to licensure, check out our HOW TO OBTAIN A LICENSE page on our website.


Larson Educational Services, a Florida Mortgage Broker School (License #MBS100000005) and NMLS Approved Course Provider (Provider ID: 1400171), is holding it’s very LAST 24 Hour Mortgage Broker License Course July 22-24.

Course Details

Thursday, July 22 – Saturday, July 24

8:00am – 6:00pm
Note – Saturday’s time is 8:00am – 12:00pm

Larson Educational Services
Horseshoe Park of Commerc
3073 Horseshoe Dr. S., Suite 114
Naples, FL 34104 – VIEW A MAP

$249 and includes course materials

By phone – (239) 344-7510
Online –

Get $10 OFF your next class at Larson!

Do you “LIKE” Larson Educational Services?

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between now and Midnight on Friday, June 11
and get a Facebook message with a
$10 OFF Voucher Code
for your next LIVE course at Larson.

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Note: this offer is not valid with any other offers or coupons and can not be used if you are already registered for a course.

Larson Educational Services
1400 Colonial Blvd, Suite 44
Fort Myers, FL 33907
(239) 344-7510


Larson Educational Services expands to Naples, FL

NAPLES, FL, June 3, 2010 –Larson Educational Services (RDB Ventures, LLC) of Fort Myers has expanded to a new location at Horseshoe Park of Commerce in Naples. The new classroom facility is conveniently located just north of the Naples Municipal Airport off Airport-Pulling Rd. The family owned professional education company focuses on licensing and continuing education courses for real estate sales associates, real estate brokers, mortgage brokers, mortgage loan originators, and community association managers throughout Southwest Florida.

The business is owned by brothers David and Brad Larson, and management is overseen by their father, Rick Larson. The Larsons opened their original location at Royal Palm Square in Fort Myers in November 2008 and have seen significant and rapid growth in market share, which directly led to the opening of the new location in Naples.

“We are 3 years ahead of schedule”, said co-owner and General Manager, Brad Larson. “Our original business plan had us opening in Naples in 2013, but our integration into the Southwest Florida marketplace and community has happened even faster than our conservative expectations. The leaders of the industries we teach have continually asked us to move south and that we do it quickly. We are proud to be able to say that we are now offering our complete schedule of courses in Naples.”

The Larson’s approach to professional education is what sets them apart from others. Although there are hundreds of options in the state of Florida when choosing an education provider for mandated pre-licensing and continuing education, Larson Educational Services has become the school of choice for professionals in Southwest Florida.

“We are a ‘cradle-to-grave’ organization,” said co-owner and Director of Operations, David Larson. “By offering excellent educational experiences in our clean comfortable classrooms, and preparing people for success in the industry through our expertly prepared course materials, people want to come back to us for more. We’re not in this business with the plan of being around for just a couple years. We will be here for a long time and we want to earn the right to be the school of choice for our students’ entire career.”

“Our instructors”, Rick added, “are the absolute best in the business. We have a team of 9 instructors who care more about our students and the experience they receive from us than any group of instructors I’ve seen in my 30 years in the business, and I’ve seen some great instructors. They’re smart professionals who know how to teach and how to present. They make learning fun. Like we say around here at Larson, “get more than just credits, get education you’ll enjoy.”

Larson Educational Services is an affiliated business member of the Naples Area Board of REALTORS®, Bonita Springs Estero Association of REALTORS®, REALTOR® Association of Greater Fort Myers and the Beach, and the Punta Gorda-Port Charlotte-North Port Association of REALTORS®.

The new classroom at 3073 Horseshoe Drive South, Suite 114 is conveniently located within a 10 minute drive of 5th Avenue and Tamiami Trail, as well as only a short drive from Golden Gate Parkway and I-75 which makes it easily accessible to the markets of Bonita Springs, Naples and Marco Island.

“We have created a solid foundation that we will build upon for many years in Southwest Florida,” said Brad Larson. “Professionalism is our top priority and it absolutely shines through from everything we do, from our website to our customer service to our course materials to our classrooms and instructors. We want the business leaders of the area to know that’s what we’re all about.”

For more information on Larson Educational Services or to view course schedules, go to or call (239) 344-7510.