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- Credit scores, plus your over all income, your debt, are all a large factor in deciding if you can qualify for a mortgage and what terms of the loan you will be able to qualify for.
- Check for errors and correct them in your credit report. Mistakes can happen. Bu you could pay for someone else’s bad financial habits.
- Pay down credit card bills as low as you can. If you can then , pay the full balance off each month. But if you transfer credit card balances from one card to another card, this may lower your credit score.
- Do not charge the maximum limit to your credit cards
- Wait twelve months after credit difficultiesbefore applying for a mortgage. You are penalized less for problems after 1 year.
- Do not purchase large ticket items for your new house on credit cards before the loan is approved. These amounts increase your debt.
- Do not obtain new credit card accountsand then apply for a mortgage. If you have too much available credit this can reduce your score.
- Shop for home loans all at once. Too many credit applications may lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if they are submitted in a short period of time.
- Finance companies should be avoided. The high interest on the loan, even if paid on time, will most likely be considered a sign of poor credit management.
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copyright by the Fannie Mae Foundation
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