Educating and helping my clients avoid the pitfalls of the mortgage loan process is the part of my job I loved the most. Much of my guidance is centered around helping improve my clients credit scores. While there is no elixir to building a solid credit score, these guidelines have helped many of my clients and will surely help you as well:
- Pay your bills on time, every time.
- A helpful tool to many is to set up automatic payments or set up electronic reminders. The key here is to make your payments on time, every time.
- Keeping your overall credit card utilization low
- Credit card models look at how close you are to maxing out your credit cards. Hence, you need to keep your credit card balance low compared to your credit limit.
- Ideally you to want to use less than 30% of your credit card limit.
- Credit card history
- Credit cards are based on experience over time. The more experience your credit report shows with paying loans on time the more information there is for credit card companies to determine whether you are a good credit recipient.
- Avoid unnecessary hard inquiries on your credit
- Credit scoring formulas look at recent credit activity to gauge your need for credit. Applying for a lot of credit cards over a short period of time may appear to lenders that your economic circumstances have turned for the worst – a major red flag that will negatively impact your credit score.
- Know your credit history
- When reviewing your credit report, It’s imperative that you recognize the information on your credit report including all your personal identifiable information.
- Leverage annualcreditreport.com for a free annual copy of your credit report
- Keep in mind that:
- Negative credit information will stay on your record for seven years
- Bankruptcies will stay on your record for 10 years
My team and I are here to help you make your home ownership goals a reality. We have been helping our South Florida Clientele for over 15 years and we can’t wait to help you too.