You know you want to buy a home, you know you should watch your credit, but what to do? There are a few things that can affect your credit report and some are easy to fix.
Make sure your payments are on time! That is the easiest thing you can do.
Keep your credit card balances low -you don’t need to pay them off but keep the balance at about 30% of the available credit. It’s called the utilization rate – that makes a huge difference in your credit score and can be one of the easiest things to fix. There are times where paying a credit card down can increase your score quickly and I’ve seen scores go up 30-50 points depending on what you do.
Don’t have too many inquiries. Mortgage inquiries are different – you can have more than one mortgage company pull your credit report and it is suppose to count as one inquiry within a 30 day window. That doesn’t mean other things might not affect it. Going shopping and having stores pull your credit so you can get 10% off your purchase will affect your score. You can open many store cards but typically only one mortgage – unless you are trying to qualify for more than one home!
Avoid collections and other negative items. Collections will affect your score quickly.
Check your credit score using a program like credit karma and then contact your lender. They will pull your credit report and chances are it will be different than credit card reports and programs like credit karma. But checking your own credit gives you an idea of where you are at! Once you are ready, make sure you keep your credit in check!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
