|
Credit scores, along with your overall
income and debt, are a big factor in determining if you’ll qualify for a loan
and what those loan terms will be.
1. Check for and correct
errors in your credit report. Mistakes happen, and you could be
paying for someone else’s poor financial management.
2. 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.
3. Don’t charge your credit
cards to the maximum limit.
4. Wait 12 months after
credit difficulties to apply for a mortgage. You’re penalized less
for problems after a year.
5. 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.
6. Don’t open new credit
card accounts before applying for a mortgage. Having too much
available credit can lower your score.
7. 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.
8. 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.
This information is copyrighted by
the Fannie Mae Foundation and is used with permission of the Fannie
Mae Foundation. View a complete copy of the publication at
Knowing
and Understanding Your Credit. |
