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Credit Do’s & Dont’s To Help Secure Your Home Loan

How is your credit?

Most people at one time or another try to improve their credit to be able to secure the best rate for a mortgage, car loan or to just repair their damaged credit.

Here are some helpful tips to improve your credit score;

DO pay your bills before the payment is due preferably as soon as you get the bill.  For millionaire credit building, this does have an impact on your credit score.  Additionally, it keeps your average daily balance low and saves you money on interest when determining interest and insurance rates.

DO keep your account balances less than 40-60% of the limit.  Potential creditors like to see that you use your credit appropriately, but not excessively.  The old adage “The best way to get approved for credit is to not need the money” is true.

DO pay your biggest bills first.  The larger the missed payment, the more it hurts your credit score.  Simiarly, if you are forced to juggle bills, choose to skip the payments for the creditors who don’t report to the credit bureaus like utility companies and pay the ones who will report to the bureaus.

DO pay your mortgage or home loan every month.  Lenders frown on late payments on your old home loan when you are applying for new loans.

DO maintain a variety of types of loans.  A previous mortgage or auto loan will increase your chances of getting the next mortgage or auto loan.

DON’T cancel your credit cards.  Even unused cards help your credit score.  It is not until you have a long credit history with a large number of accounts that lenders start to be concerned that you are possibly overextending yourself.  If you have trouble not using  your cards wisely, freeze them in a block of ice, even cut up the cards.  But don’t cancel the account!

DON’T sign up for more cards or get too many rate requests over an extended period of time .  Strategically plan and concentrate your efforts when applying for additional credit or loans.

DON’T pay old unpaid bills.  This will draw attention to the old accounts.  Showing recent activity can keep the information on your report for an extended period of time.  Sometimes it is better to leave sleeping dogs lie.

For more information on home buying or selling, give us a call!

Pam Parton & Joanna Woolley
760-580-1615 or 760-580-1630

Brian Olenik of
Corinthian Title
contributed to this
article