How to Boost Your Credit Score

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage. My best friend is blessed with three kids and a big house. All the kids have their own rooms, but recently life in that big old house has been different. In an effort to solve kid boredom, my friend bought one of those massive blue tarps and created a full room tent in the spare bedroom.

They put each of the kids' mattresses under the tent in the shape of a T, and every night for now five weeks the kids have slept with their heads feet apart instead of rooms apart. It's Ryan from United Faith Mortgage, and when I see a home, I can't help but see interest rates, escrows, and trying to help listeners pay the least amount possible. But for me, that story was a needed reminder that it doesn't matter whether our homes are big or small.

It only matters whether we're willing to enjoy the little things that God gave us today, like a tarp tent. If you happen to be looking for a new place to put up a tarp of your own, we are United Faith Mortgage. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed mortgage banker. For all licensing information, go to NMLSConsumerAccess.org. Corporate NMLS number 1330. Equal housing lender.

Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Plenty of companies claim they can boost your credit score for a price. Some are scams, some are legitimate, but either way, you just don't need them. Hi, I'm Rob West. The truth is there's nothing anyone can do to improve your credit score that you can't do yourself and should be doing. We'll talk about that, that it's on to your calls at 800-525-7000. Any financial topic, 800-525-7000.

This is MoneyWise Live, helping you see money from God's perspective so you can be a better steward of his resources. So what exactly is your credit score? Well, it's a single number, usually between 300 and 850, that essentially tells a prospective lender how good a risk you are, how likely you'll be to repay the money loaned to you as agreed on time and in full. Now five factors make up your score.

Your payment history 35%, amounts owed 30%, the length of payment history 15%, the different types of credit accounts 10%, and finally new credit is the remaining 10%. If that seems like a lot to remember, good news, you don't have to. In fact, you just have to remember and do two things to improve your credit score.

You ready? First, pay every bill that comes in on time. Simple enough, right? We should always do that anyway. Let's go to God's word. King Solomon writes in Proverbs 3 27, do not withhold good from those to whom it is due when it is in your power to do it.

Very simple and yet something we all need to heed. Now second, never use more than 30% of your available credit in any account. Do those two things and in time you'll have a very healthy credit score that will get you a favorable interest rate in terms when you apply for a loan. Now let's take a closer look at those two things you must do for a high credit score. Pay everything on time.

This is extremely important because again it's the single largest factor making up your score at 35%. Paying all your bills on time means just that. Not just credit cards but even things like utility bills and rent.

Those transactions may be reported to the credit bureaus just like credit card transactions. Most major scoring companies including FICO and VantageScore, the two most popular, put the heaviest emphasis on timely payments when determining your score. A single 30-day late payment probably won't do much lasting damage to your score but you might get hit with a late fee but consistent late payments of 30 days will drag your score down significantly. Paying 60 days late will definitely hurt your credit score especially if you get into a habit of paying that late. And of course paying 90 days late does even more damage and will take longer to repair that damage.

All late payments stay on your credit reports for seven years although they do the most damage when they're recent. When you begin to consistently pay on time your score will gradually recover. Now there are things you can do to make sure you pay on time.

I would get on a budget that ensures you'll always have enough to pay your bills. Then set up automatic payments from your checking account. Most banks now enable you to do that. If you prefer to pay manually you can set up payment reminders. Setting a reminder a few days before a due date allows time to transfer money to the creditor. So that's what you need to know about paying your bills on time. Now about using less than 30% of your available credit. This is the second biggest factor influencing your score and mostly applies to credit cards.

The credit scoring companies look at it two ways. First for each account you have and then for all of your credit accounts combined. But all you really need to remember is never have a balance more than 30% on any credit card. Of course you should never have any balance on a credit card. Instead pay off the entire balance in full each month to avoid paying any interest.

The 30% figure is just a good rule of thumb. The lower your balance on each card the higher your credit score will be. If you find yourself in a tough spot financially and you have to temporarily run a balance on a credit card many issuers now allow you to set alerts so you're notified when you're approaching the 30% mark. Another trick when carrying a balance is to make several smaller payments during the month instead of making the full payment due amount at the end of the billing cycle. That will lower your credit usage ratio and probably reduce the amount you'll owe in interest too.

So those are the two things you need to know and do to raise your score pay your bills on time and never use more than 30% of your available credit. Hey your calls are next 800-525-7000 800-525-7000. I'm Rob West stay with us we'll be right back. Welcome back to MoneyWise Live I'm Rob West your host. Today and every day diving into God's Word and understanding how we can apply his truths to your financial life. Of course we'll be taking your calls as well.

Here's the number 800-525-7000. You know there's an unlimited number of ways we can use God's money but it really all boils down into some very simple principles. You see when we understand that God owns it all and we're his manager and that money is a tool to accomplish his purposes it changes everything because every spending decision becomes ultimately a spiritual decision. It reflects what we value and then we go to God's Word and we see these principles that he provides for us about how we should manage his money. They're simple we should live well within our means we should avoid the use of debt because that mortgage is the future. We should set long-term goals because the longer term our perspective the better our decision today. We should have some liquidity or margin in our financial life and we should give generously because that breaks the power or the grip of money over our lives. And when we get that right and place it all under his lordship here's my experience is that it causes that causes us to have a more intimate relationship with him.

Everything else just seems to work better when we put this area in proper perspective. Well that's what we want to help you do today whether it's giving questions saving looking toward the future maybe you're just starting out or trying to get that credit score figured out whatever it is give us a call we've got a few lines open 800-525-7000. Let's start today in Illinois.

Eddie you're first on the broadcast go right ahead. All right yes my question is I have an IRA account I'm retired I'm 64 years old and I have an IRA account so I was just wondering how much federal taxes should I take out of that account when I take money out? Yes well the typical amount that's withheld is 10 percent that's typically what a planned administrator might withhold automatically unless you ask for something different. The reason the default withholding rate is 10 percent though is that it's generally a pretty good measure of the eventual tax liability that a typical taxpayer will owe on IRA distributions. If you're in a low tax bracket and don't have a lot of other income then withholding that 10 percent amount can be a reasonable starting point. Obviously you may need to withhold more and even pay in more. One approach would be Eddie is to look at your effective tax rate basically for an individual that's just the total tax you paid the last time you filed divided by your total taxable income that's going to give you a percentage that's essentially your effective tax rate and you could apply that effective tax rate to these withholdings as well. I would always encourage you especially if this is something you're just starting to do perhaps this is a first time you're taking money out of an IRA in this season maybe where there's been a reduction in income or a change in your income status a good time to connect with a professional who can guide you make sure you're withholding the proper amount paying it in on a timely basis and there's not any surprises when you file your return but hopefully that at least gives you a starting point we appreciate your call today. Next to Cleveland, Ohio Joanna you're next on the program go right ahead. Hi my name is Joanna and I am calling because my husband is 70 he's been retired just about three years but still works a little bit and I work part-time and I'm 65 and we wanted to get out of the stock market when things were kind of crazy and I know it's probably a mistake but we've done everything right all these years and God has blessed us we have a nice nest egg and we just didn't want to lose it and so now most of it probably 10 percent of it is still in the market but most of it it's sitting well probably half of it is in annuities but another 40 percent is sitting in cash and just sitting in like Fidelity and Schwab and they want to they want to handle it but they want to charge us like one percent of it and that seems like money we don't want to even spend and so we don't know I know they have like a robo advisor we don't know banks rates are just so low it doesn't look like the Fed is going to do anything with interest rates and we just don't know what to do with it yeah yeah well you know there's a lot of folks in your situation Joanna where the Lord has allowed you to build up a substantial nest egg you're in a pretty good spot in terms of your income being covered and now you just want to be a good steward of what God has entrusted to you want to see it grow modestly but at the same time you don't want to take unnecessary risk especially you know 12 years into a bull market when we know that the economy is restarting so we're going to have incredible growth economically this year perhaps the most in 20 years we've got all this stimulus out there but that's going to work its way through the system and at some point this economy will roll over it's always cyclical and you want to be able to weather a downturn especially if it lasted a couple of years before it recovered and I would think that any downturn we would experience in the future would recover I don't see anything that would cause us to think we should be you know alarmed that you know all of things things around us are going to come crumbling down as some might suggest but you want to be prudent and that's obviously what you're getting at run through some numbers with me and let me just ask you a few questions so first would be is your income in fact covered apart from these investible assets yes okay and what do you have accumulated in total uh separate the annuities from the non-annuity investments um these are um probably not including annuities probably close to six seven hundred thousand okay all right and you said about ten percent of that is in stock so about seventy thousand is that right no I I have a little bit in stocks left we didn't totally take it all out we just kept most of it out but I left my small 401k at my job I took most of that out in annuity about three years ago but I left like forty thousand in there and then we probably still have uh maybe fifty thousand in uh in account for us in the stock market I see okay yeah yeah about a hundred thousand between the two or great yeah yeah it's worth about four hundred thousand I love it well you guys have obviously been doing a lot of things right uh what do you have roughly in annuities in addition to the seven hundred thousand in in cash about six six six hundred thousand seven hundred thousand something like that and are you happy with the annuity product do you feel like you understand it does it have the uh proper safeguards on the downside where that particular portion of your assets you're comfortable with or do you have some questions about that as well no we're pretty comfortable with their annuities we have a good christian um advisor we worked with on our annuity so great we feel pretty good about that excellent well you know I think with regard to the 700,000 there about um you know you're doing the right thing in the sense that you've got your income covered obviously the Lord's allowed you to accumulate the substantial nest egg you don't need the money right now but you may want to do some additional giving now or down the road you might want to pass on an inheritance you want it to be there if you had some major medical expenses you needed some long-term care something like that and so you want it to grow but you want to be conservative if we were to have a a major recession hit and stocks took a 35 hit which that's typically the number I would use to make sure you would be comfortable losing at least on paper that amount with whatever portion is allocated to stocks while you wait for it to recover you know I think that's a good barometer so you know I would typically as a starting point say for somebody in your position perhaps out of that 700,000 think in terms of putting 30% at the risk of the stock market so in this case I'd be about 210,000 there about and the idea would be even if that took a 30 35 dip you wouldn't touch it you would let that go and you would wait for the market to recover which it always has and if you needed to draw money out for any unexpected reason you'd take it out of the rest of the portfolio the roughly half a million dollars that I would say should be in other fixed income type investments bonds corporate and government bonds perhaps some tips treasury inflation protected securities or governments you know whatever it is that gives you peace of mind but yet gives you a little bit more income or yield than you might get from let's say a high yield savings account or a cd which as you've already acknowledged are very very low right now but the benefit of that 30% in stocks is that during the rest of the years when it's moving higher like it has the last you know 12 plus that's going to provide some additional growth so the overall portfolio can do better than you know two or three percent you might you know look to get four or five or six percent annualized a year because of those two pieces but I would recommend that you get a a professional to help you do that and one percent as a management fee is very common very typical and here's the way I look at it you've spent your entire life building this nest egg it's not something to put on autopilot I think having somebody who's able to hear you out know what your goals and objectives are know what God's doing in this season of life and help to guide you so you don't take any unnecessary risk and yet you're still getting a reasonable rate of return so you can keep God's money working for you in the kind of portfolio that I'm describing that would be well worth in my view one percent a year to have somebody do that if they're going to you know get to know you and give you the proper communication and deploy a strategy that you all feel like you can have some peace of mind with but give me your thoughts on that yeah no okay that that makes more sense I forgot to mention I have about 200,000 just sitting in the bank and doing nothing there too so I didn't know if you know I yeah I guess if we go talk to an advisor they would give us the proper information that's right like I said we do have an advisor but both Fidelity and Schwab because we have stuff there we just didn't know if the one percent I mean is pretty much standard and you know very reasonable for that amount of money and and I think there's nothing wrong with keeping at least a year's worth of expenses in cash and cash equivalents like you have with that 200,000 but I think beyond that deploying it in a strategy that makes sense that's generating some income has some growth potential is the right approach so you can either go back to your current advisor or connect with another advisor or two we recommend always someone who has the certified kingdom advisor designation you can find a cka there in Cleveland and you visit our website moneywiselive.org click find a cka more calls after this break 800-525-7000 we'll be right back welcome back to MoneyWise Live I'm Rob West so glad to have you along with us today taking your calls on any financial topic here's the number we have open lines 800-525-7000 whether it's giving or debt perhaps you want to talk about your investments your credit score whatever it might be and we want to apply God's truth to your situation we can do it together give us a call 800-525-7000 let's take a quick email we do take from our community which you can find in the MoneyWise app in your app store or those that come in by email we take a question usually try to do one per broadcast that we've received from you and answer it on the air if you'd like to submit your question again you can download the MoneyWise app or you can email us at questions at moneywise.org this one comes from Kathy and Jim they write hey Rob we're looking to refinance do you have any rules we should consider before we make the big decision and I just happen to have some rules for you to consider Kathy and Jim first of all I would want to make sure that you're going to save at least a point and a quarter to a point and a half on the interest rate before you proceed I'd love for you to be able to stay in that home at least your plan would be five to seven years following the refinance obviously things can change but at least that would be your intention going into it I'd want you to match the remaining term or shorten it so if you have 25 years remaining let's look for a 25-year loan 20 would be even better I'd love for you to get three bids before you select your new mortgage a lot of people for what is the largest transaction they will ever make only get one offer I don't think that's a good approach and I'd like to add to that perhaps two of the three should come from online lenders where you'll typically get the best offers go to bankrate.com to check out who has the best deals right now and then finally make sure you check the fees and expenses on that refi I'd like for you not to spend more than two percent of the mortgage value in closing costs if it's a lot higher than that it could be that they're requiring you to buy the rate down but with 30-year rates between 2.6 and 2.9 percent right now and 15-year rates below two percent up to 2.25 you should be able to get if you have good credit a very good rate and still keep those closing costs less than two percent so Kathy and Jim we hope that helps you again if you have a question you'd like to submit us we'll try to get it on the air questions at moneywise.org back to the phones Janet's in Austin Texas hello Janet thank you for calling go right ahead hi um I um have a credit card that I've had for several years and I don't really use it it has an annual fee the annual fee just came up again in March and so my question is I'm trying to rebuild my credit I mean it's pretty good but still I'm 61 years old and I'm trying to decide do I pay this annual fee just to keep this card that I don't really use or should I close the card yeah I would definitely close that card I really don't like paying annual fees for cards even those that have tremendous rewards I'd be looking for one that has zero annual fee keep in mind they're getting paid from the merchant rebate when you use the card and I realize you said you're not using it and that's why in the fine print there's a period of time where if you don't use it after a certain number of months they'll automatically close it but there is really no reason today to be paying any kind of annual fee even if it's a rewards card especially if you're not using the card that's an expense you can recoup right back into your budget so I'd close the account switch to a card with no fee and to find that card I would either go to bankrate.com or I'd go to nerd wallet by the way one of my favorites right now that I just switched to is the fidelity rewards card it's great two percent back on every purchase so long as it gets credited to a brokerage account I use it to save for college for our kids so check that so check that one out no fee and two percent back on every purchase nerdwallet.com or bankrate.com would be great to check those out hey we're going to pause for a brief break more of your calls right around the corner 800-525-7000 this is MoneyWise where God's word is applied to every financial decision stay with us welcome back to MoneyWise Live I'm Rob West your host thanks for being along with us today taking your calls and questions at 800-525-7000 we have some open lines 800-525-7000 right back to the phones Topeka Kansas Jaylene welcome to the broadcast. Hello yeah I was just this is my first time calling okay great and I was wondering the money I have in my bank account I was wondering what I mean and then my credit score I was wondering about that okay what is it you're looking to do with that money at this point is that money that you're going to try to hang on to for emergency savings do you want to pay down some debt are you looking to do some giving what do you have in mind well I'm trying to it's really it's the Lord's money I was just trying to see what I need to do because I mean it was really given from the stimulus packages you know when they give out those checks yes and I was just kind of getting it and and they were depositing in my account yes let me ask you this do you do you have some savings right now some emergency savings separate from this money you're describing to me from the stimulus no I get a disability check every month okay okay very good well you know I would see this money as a real blessing it's part of God's provision to you regardless of how it ultimately gets to you and you know we generally recommend Jaylene that you have at least three to six months worth of expenses in a liquid savings account I prefer a high yield savings account like Marcus or Capital One or something like that Ally Bank that's going to pay you right now about 0.6 percent so a little more than a half of one percent the idea would be that if you had an unexpected expense an emergency that comes up beyond what you're able to cover out of your monthly check that you receive on disability that would be what this money is for and so I'd love for you to just hang on to that and let it sit there in that savings account so if you need it you've got it for that purpose and if you want to check out one of those again you could go to Ally Bank you could go to Marcus Capital One 360 you could link that right up to your checking account move that money in there and just earmark it for emergencies so if you need something you could just transfer it over electronically so look at this as a great opportunity to replenish if you will that emergency savings account we appreciate your call today 800-525-7000 is a number to call with your questions today on to Chicago Illinois Bess welcome to the broadcast hi thank you I'm so glad that you were able to take my call and I heard that number so let me call in now what I'm calling for is that my job I retired I'm 70 years old and I got some money like twenty five thousand dollars that they had banked for me on my job it was like sick time that I hadn't used yes so they turned it over to a company I think it's warrior and I want to I don't know what to do with it because he said I can invest it if not if I want to once I invest the money and I can take it out anytime but they will charge me 20 to take it out so I just didn't really to be honest with you I'm confused I don't know what to do with the twenty five thousand dollars yeah yeah so this is money that you don't need right now is that right that's that's correct yeah okay well the first thing to understand is what type of account it is you know typically when you're eligible for sick leave pay you get your benefit from your employer and it's included in your federal taxable income so you have to pay income taxes on the money you receive as sick leave you know it depends on if it's been moved into an account on a pre-tax basis then what they're talking about is you know when you take it out it's going to be added to your taxable income and so they're going to withhold twenty percent kind of as a starting point and then you'll settle up with the government when you file your tax return that's what's being described there otherwise it would just be paid out to you and perhaps could be moved into a taxable account and then it would just be added to your taxable income that they report to you and to the IRS at the end of the year in either case if you don't need the money the first question is you know do you have some emergency savings just like i talked to jaylene about do you have somewhere between three and six months expenses in savings separate from this you do great yeah okay so this is just truly extra and so if you wanted to put this to work you could leave it right there at voia and connect with somebody or you've got some other options you could use one of the robo advisors we talk about here on the program for those with a smaller amount of money schwab has the schwab intelligent portfolios very low cost very properly diversified etf portfolios you could use betterment would be another one or vanguard or you could visit with our friends at soundmindinvesting.org to get a biblical perspective on how to manage god's money using mutual funds but you could also just keep it right there bess and connect with one of the investment advisors at voia and just ask them to help you place this in a in a portfolio that reflects your goals and objectives so you're not taking too much risk but the money is still working for you the idea is that it's growing modestly so if you needed it down the road for something unexpected beyond what your emergency fund would cover you'd have the ability to tap into this account so i would take one of those approaches either connect with somebody at voia uh look at one of the robo advisors like the schwab intelligent portfolios or head over to soundmindinvesting.org to learn more about how they can assist you we appreciate your call very much today south to florida and we welcome florence to the broadcast go right ahead hi uh thank you for taking my call i wanted to coattail on the a couple of previous callers ago um who said she'd taken money out of the stock market um and i appreciated your comment about the financial reset because i also think there's one coming but my financial advisor doesn't seem to agree so um i wondered if um if i should take some some of my retirement funds out of the stock market for for a time and if i did would it be wise to invest it in gold or bitcoin uh i see yeah sure i appreciate that florence you know a couple of thoughts i mean uh you know what i'm describing is not some kind of impending doom of any kind but probably more of a cyclical rollover that we typically see if you go back over the last hundred years you'll see that just about every 10 years and it's not always in 10-year cycles we see the economy you know slow down and it can often result in a recession or more but it's typically short-lived and in every case the market has moved to higher ground so i wouldn't advise you to do anything differently today than i would have advised you to do let's say five years ago when we were only you know halfway through this current bull market that we've been in that had a brief blip with the pandemic last march but i wouldn't advise you to do anything different today than than you would have then because keep in mind as long as you're invested with the right investment mix that's appropriate for your age and risk tolerance your goals and objectives with the at the center of that what god is leading you to do with his resources then you should be able to weather any financial storm because you're living within your means and you're paying down your debt and you're investing for the long term even in the retirement season you know we're still thinking 20 or 30 years out at the lord terry's and you have good health but we get more conservative and we take the stock exposure down so that if we got into a prolonged recession two or three years and it may be another five years before that happens nobody knows but you'd be able to weather that and wait for it to come back and not have to sell anything at a loss but you'd be able to just let it recover over time so that would be the way i would go i wouldn't overweight in gold or bitcoin i'd limit my exposure in gold to five percent i'd stay away from bitcoin altogether i hope that helps we're going to pause and we'll be back with much more 800-525-7000 is the number welcome back to money wise live where we apply god's word to today's financial decisions thanks for being along with us on the broadcast today hey have you considered becoming a money wise live partner we rely on listener support to do what we do every day not only here on the radio but also through the money wise app and on the web with our money wise coaches volunteers serving hundreds and thousands of people every year through individual coaching and email coaching and all of the tools and resources we build we can only do it through your financial support we're so thankful for each of you who partner with us on a monthly or a one-time basis and if you'd prayerfully consider doing that we would certainly appreciate it you can head over to moneywiselive.org just click the donate button at the top of the page again that's moneywiselive.org click donate and we would certainly be grateful back to the phones we go to indianapolis indiana dawn you're next on the program go ahead hi thank you for taking my call my question is my daughter is going to be graduating this year and heading to private university in the fall and between the scholarships she's been awarded and and also financial help from this the university itself we're going to be short about ten thousand a year for the four years my question is what is your thoughts on us straight out taking the loan to cover that or taking out a loan in her name where we would co-sign on that and pay the interest until she graduates and then we would help her graduate and then we would help her pay that off is there any pros and cons to that we're thinking maybe the latter would help build her credit history yeah what was the first option you were looking at a parent plus loan just that we just take out yeah we that's correct okay yeah you know you're going to get a better interest rate with a loan in her name at around i believe just under three percent whereas the parent plus loans are going to be up over five here's the thing i think in either case you've decided you know you all are going to step in and help to pay this for her or with her if there's some expectation so i think doing that in her name with a federal student loan getting the very best rate but agreeing that you all would kind of be the backstop there would be a great option you're right it would help to build her credit i think the other thing to consider is you just need to make sure there's real clarity on the front end open communication with her as to expectations is this something you all intend to pay in full for her is this a shared responsibility once she graduates and gets a job kind of break that down so there's no confusion and i think the key which is why the bible warns so strongly against co-signing is you need to be ready willing and able to step in and take care of this if for some reason she can't because the last thing we'd want is there's to be some relational damage or financial damage on your or her part as a result of her inability to pay as she's just getting started so i think that's the real thing to be careful for but in terms of which loan to go for i would go for the one in her name with the very best interest rate outstanding thank you i just want to make sure there wasn't something in there that we weren't seeing no i don't think so don and i appreciate you all thinking through it and tell her congratulations on those scholarships she's received let's head to chicago illinois felicia you're next on the program go ahead hi um i was calling because i was inquiring about refinancing my home um i refinanced it from the original loan and i think it was 2001 so now i have a 4.5 interest rate it was a conventional loan and i owe 64 000 left on it um the home is worth about 139 000 and i looked at the beginning of the year at the credit union um the federal credit union and i think the interest rate i want to say was about three percent for a 20-year loan um yes but i only have about 10 years left yeah so i was at that time i think i was only going to save about five thousand dollars over the life of the loan and the original origination fee i think was either 2,000 or 2,500 and i wasn't sure if that even made sense to refinance yeah it doesn't unless you're going to pay it off you know in 10 years which you could do with a 20-year mortgage but i'd be concerned that you would just pay the minimum and then you're really taking a lot of that savings and you're chewing it up by doubling the term of the mortgage um have you looked at a 10-year mortgage at 64 000 you know plus expenses to see how that would compare in terms of a monthly payment i actually looked at a 10 and a 15 is what i looked at because i only have 10 years left on it right right um on the loan i only have 10 years left that's it right and what did that what were you seeing in terms of interest rates on a 10-year i want to say it is at least about three three percent if i'm not mistaken that was at the beginning of the year might have been a high two um three percent maybe yeah if you have a good credit score felicia you should do a lot better than that you know 10-year rates right now you should be uh seeing it uh 1.9 roughly um you know under two percent in some cases for a 10-year mortgage certainly not more than two and a quarter so i think that's really the opportunity for you is to go out and look for a new 10-year mortgage as long as you plan to stay in this home you could save in this case more than two and a half percent a year in the interest rate you wouldn't be extending the term one bit because you've got 10 years remaining you'd be replacing it with a new 10-year mortgage and i'd just make sure that you don't spend more than two percent or you know around twelve hundred dollars in closing costs but if you could find that i'd be totally in favor of that i'd go to bankrate.com to look for the very best programs right now at 10 years and you know any mortgage lender you apply with in a 14-day period is going to be considered one in terms of the number of inquiries that impact your credit score so i'd get at least three bids from three competing lenders that look like they have very aggressive terms and rates right now and i think you're a great candidate to refinance and then get that thing paid off as quick as you can and enjoy being completely debt free we appreciate your call today on to central pa and marie you're next on the program go ahead thank you for taking my call sure i have a quick question i was just listening or i was listening to your show and you told when i first turned it on you were talking about two ways to increase your fico score and one of them was to about paying your uh credit cards off not having more than 30 percent of your available balance my uh my husband and i we pay our credit card off in full every month but on like the day before we pay it it's it might be 50 60 70 percent of the available credit right should we ask for an increase in our credit or should we should i pay it like every week or every other week to keep the balance lower yeah what is your credit score and marie have you checked it recently yeah it's in the high 700 okay you know it one of the things is we don't have a mortgage so okay very good you know it i don't think it's going to make much difference i mean you're right the reported balance prior to you paying it off is what's reported to the credit bureau and that's going to be looked at two ways it's going to be looked at by account to say what percent is this balance prior to you paying it of the total limit and to your point it's often 60 or 70 percent which is certainly above the 30 target and then it's going to be looked at in the aggregate so if you have other open revolving accounts that you're not using some older credit cards or something like that it'll be looked at in light of the total available credit now you may say well i don't have those so you know it's limited just to this one but keep in mind it's both factors but here's the bottom line um you know i don't think it's worth it for you anything over 7 40 750 you're going to qualify for the very best terms and rates no matter what you apply for and at this point in your life you're probably not out there looking to take on a lot more debt or even qualify for for new loans and so i think you know sitting there with a high 700 score even if you were to you know open a few more credit cards you know and then get this up to 820 or 8 30 i just don't think it's going to make that much difference for you and if you do that it's going to open you up to additional potential fraud somebody compromising an account that you're not really watching because you're not using it i just don't like open accounts sitting around that you're not monitoring so i'd probably just stick with it and marie even though yes there's a potential you could get this up above 800 i don't think it's going to make much difference for you does that make sense okay yep all righty we appreciate your call today god bless you our final call today is going to be flory in boynton beach florida go right ahead hi thank you for taking my call i have a question i want to buy an investment house and i want to ask you if that's the right time to do it we don't have a 401k and that would be some extra income for our retirement i see uh so are you currently saving for retirement somewhere else uh now we have the house paid off so we are debt free and i'm trying to see if i can i have some money saved so i want to put 50 down payment on the new investment so i'm hoping to pay it off by the time i retire i see and the 50 you've saved that would go toward this investment property is that in a taxable account yes okay and it's just in cash currently is that right yes yeah well i mean there's uh real estate is a very effective way to build wealth and can be an income stream for you as long as you do it right you need to go in with your eyes wide open understand what you're getting into it's certainly not a passive investment by any means it's going to require you to market it and be a landlord and take care of the maintenance and deal with any problems that come up and when a tenant moves out you've got to replace them and you know make sure the property's been taken care of so there's a lot that goes into it so i would just be careful and know what that means for you make sure you have the time and the interest to commit to it but if not or if you're comfortable with that it could be a great tool for you to supplement your income and i love the fact that you're planning to be debt free by retirement we appreciate your call today that's going to do it for us today thank you so much for listening want to say thank you to my team amy rio's producing today dan anderson engineering uh jim henry providing research eric screening our calls today money wise live is a partnership between moody radio and money wise media we'll be back tomorrow to do it all over again i hope you'll join us may the lord bless you