8 Ways to Improve Your Credit
Credit scores, along with your overall income and debt, are
a big factor in determining if you’ll qualify for a loan and what loan terms
you’ll be able to qualify for.
- Check for and correct errors in your credit report. Mistakes
happen, and you could be paying for someone else’s poor financial
management.
- Pay down credit card bills. If possible, pay off the
entire balance every month. However, transferring credit card debt from
one card to another could lower your score.
- Don’t charge your credit cards to the maximum limit.
- Wait 12 months after credit difficulties to apply for a
mortgage. You’re penalized less for problems after a year.
- Don’t purchase big ticket items for your new home on
credit cards until after the loan is approved. The amounts will add to
your debt.
- Don’t open a new credit card account before applying for a
mortgage. Having too much available credit can lower your score.
- Shop for mortgage rates all at once. Too many credit
applications can lower your score, but multiple inquiries from the same
type of lender are counted as one inquiry if submitted over a short period
of time.
- Avoid finance companies. Even if you pay the loan on time,
the interest is high and it will probably be considered a sign of poor
credit management.
To obtain a complete copy of the publication, “Knowing and
Understanding Your Credit”, visit http://www.homebuyingguide.org.