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Consumer
Reports for Home Buyers -
Buyers
Services |
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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.
- Check for and
correct errors in your credit report. Mistakes
happen, and you could be paying for someone else’s
poor financial management.
- 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.
- Don’t charge
your credit cards to the maximum limit.
- Wait 12 months
after credit difficulties to apply for a mortgage.
You’re penalized less for problems after a year.
- Don’t order
items for your new home you’ll buy on credit—such as
appliances—until after the loan is approved. The
amounts will add to your debt.
- Don’t open new
credit card accounts before applying for a mortgage.
Having too much available credit can lower your
score.
- 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.
- 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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