Everyday is an opportunity to put yourself in a better position to purchase a home. One way is by putting into action these Credit Dos and Don’ts.
Most everyday, or at least several times each month, you have the opportunity to make good or bad decisions regarding your credit. Every car loan, furniture or other installment loan. Every student loan. Every credit card. Every cell phone, internet, or utility bill. Every rent or mortgage payment.
So, if you would like to become a homeowner one day – whether it’s next month, several months, two years, or even five years from now then I would like to offer some very important Credit Dos and Don’ts.
Credit Dos:
– DO pay all bills on time. Each late payment takes a bite out of your score and a longer period of time to recover the points lost.
– DO pay down revolving credit card accounts. The goal should be to never have a balance of more than 30% of your credit limit. Credit utilization is up to 30% of your score. It is better to keep a small balance instead of paying off the card.
– DO keep your accounts open when possible. When you have an account open longer than 12 months then the more favorable it is considered in your credit score.
– DO pay all of your other accounts on time. Rent, cell phone, internet, insurance, etc. These types of accounts don’t typically report to the credit bureaus. But accounts in good standing can be used as alternate tradelines if you don’t have installment loans or credit cards.
Credit Don’ts:
– DON’T shop for any additional credit opportunities from at least six months before applying for a home loan until AFTER you have been to the closing table and received the keys to the house. Each inquiry can lower your credit score.
– DON’T open any new installment loans or credit cards from at least 6 or 8 months out. This causes an inquiry (see above paragraph). And the new account will be a negative factor on your credit score.
When buying a home is on the horizon for you then reach out to a mortgage loan officer who is willing to be a part of your home buying team. We will consult with you and give you some sound wisdom to make sure you achieve your goal of a home for your family. Being a homeowner is within reach on that horizon. How can I help get you there?
