Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:
1. Check for errors in your credit report
Thanks to an act of Congress, you can download one free credit report each year at annualcreditreport.com. If you find any errors, correct them immediately.
2. Pay down credit card bills
If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.
3. Don’t charge your credit cards to the max
Pay down as much as you can every month.
4. Wait 12 months after credit difficulties to apply for a mortgage
You’re penalized less severely for problems after a year.
5. Don’t order items for your new home on credit
Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.
6. Don’t open new credit card accounts
If you’re applying for a mortgage, having too much available credit can lower your score.
7. Shop for mortgage rates all at once
Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.
8. Avoid finance companies
Even if you pay off their loan on time, the interest is high and it may be considered a sign of poor credit management.
If you would like more information on how to build your credit and/or save money for a down payment, Lyn has worked with many clients on creating a detailed budget to accomplish financial goals in a timely manner. Call for a free consultation.
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