Here are a few tips that will help you maintain good credit.
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If you want to achieve and maintain a good credit score so you can get a favorable interest rate when buying a home, here are four key tips to remember:
1. Pay your bills on time. If you miss a bill, don’t panic—just pay it as soon as you can, call the person responsible for the invoice, and ask them not to report it to the credit bureau. If it’s your first late payment, they’ll oftentimes give you that courtesy. Most companies will give you a 15- or 30-day grace period anyway, so you have plenty of time to make up a payment.
2. Don’t open any new accounts when applying for a loan. If you open a new account and ask for a new credit card, it can adversely affect your credit score. For this same reason, you shouldn’t close any accounts you have either. Credit depth—or an account with good history—has a positive impact on your credit score.
“If you miss a bill, don’t panic—just pay it as soon as you can."
3. Don’t max out your credit cards. If you need to spend a lot of money, try spreading that cost across different cards, and keep the expenses below 50% of the limit.
4. Remove any collection items from your credit report. If you miss a payment and it ends up in collection, take action right away and see if you can withdraw this debt. After it gets paid, your credit score will improve.
If you’d like to know if there’s anything wrong with your credit report, all three major credit bureaus (Equifax, TransUnion, Experian) allow one free credit check per year on annualcreditreport.com. By checking your credit report now, you’ll have time to resolve any issues before applying for a mortgage loan.
If you’d like to know more about maintaining good credit or have any other real estate questions, feel free to call or email me anytime. I’m happy to help.
