CREDIT DO’S AND DON’TS

 In the ever changing world of credit and finance, we thought it might be helpful to share some current tips and strategies for keeping or helping to repair your credit worthiness, so you are prepared when it comes time to purchase a new home!

Do stay current on existing accounts!  One 30-day late notice can cost you.

Do continue to use your credit as normal! Changing your spending patterns can raise a red flag and lower your credit score.

Do monitor your credit report! Requesting your credit report once a year is a good life-long habit to get into.  You can obtain one free report from each agency every year, so put it on your calendar …January is a good time!

Don’t consolidate your debt! When you consolidate all or your debt into one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized.

Don’t Max Out Credit Cards! Try to keep your credit card balance 30% below their limits. If you pay down balances, do it across the board.

Don’t Apply for New Credit! If you will be applying for a new loan to purchase a home in the near future, or if you are currently in the process, new credit can negatively affect your score until the new credit has a rating.

Don’t close credit card accounts! When you close credit card accounts it may appear that your debt ratio has gone up. It will also affect other factors in your score, including credit history.

Don’t pay off collections or charge off’s”! If you want to pay off old accounts do it through an escrow on the purchase of a new home, that way a “letter of deletion” can be requested from the escrow company to have the collection deleted from your credit.

Remember, if you have any questions about your credit and how it may impact your home purchasing ability, please contact us, we would be happy to send you our preferred lenders referral list so that you can talk to a professional.  We hope our list of Credit Do’s and Don’ts has been helpful!