8
Ways 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 qualify
for.
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.
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.
To obtain a complete copy of the publication, “Knowing
and Understanding Your Credit,” visit http://www.homebuyingguide.org.
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