How 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
- Check for and correct errors in your credit report. Mistakes happen, and you
could be paying for someone else's poor financial management. Request a free
copy of your credit report by visiting
All Americans are now entitled to a free credit report from each of the three
nationwide credit reporting agencies,
and Trans Union.
- 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 new credit card accounts 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.
For more info on your credit score and how to improve it go to:
Reprinted from REALTOR® Magazine Online by
permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2005. All rights reserved.