Skip These Slip-Ups to Secure Your New Home
Whether you’re a first-time homebuyer or a seasoned investor, making the wrong moves with your credit could cause unnecessary delays—or worse, cost you your dream home.
Below are three crucial credit tips to keep your score in top shape and your home-buying process smooth.
1. Don’t Pay Off Collections or Charge-Offs Without Consulting a Pro
Paying off collections might seem like a smart move—after all, debt is debt, right? Not so fast. Paying off collections or charge-offs could actually drop your credit score! Before you hit that “pay now” button, it’s essential to speak to ME and I will refer you to a credit expert who can guide you on the best approach.
2. Closing Out Credit Cards Could Hurt Your Score
After years of responsible credit card use, you may feel tempted to tidy up your financial life by closing unused accounts. Resist the urge! Closing credit cards can reduce your credit utilization ratio, one of the most significant factors in your credit score. Even though you’re not using the card, keeping it open contributes to a longer credit history and higher available credit, both of which can boost your score.
3. Avoid Opening New Credit Cards or Accounts
You walk into a store, see a great deal, and the salesperson offers you an additional 10% off if you apply for a store credit card. While it may be tempting, applying for new credit while buying a home is a big no-no. Every time you open a new account, it triggers a hard inquiry, which could cause your credit score to drop. Even a small dip could affect the interest rate you’re offered or delay your closing.
