Credit
scores, along with your overall income and debt, are big factors in
determining whether you’ll qualify for a loan and what your loan
terms will be. So, keep your credit score high by doing the
following:
1.
Check for and correct any 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. Transferring credit card debt from one card to another
could lower your score.
3.
Don’t charge your credit cards to the maximum limit.
4.
Wait
12 months after credit difficulties to apply for a mortgage. You’re
penalized less for problems after a year.
5.
Don’t order items for your new home on credit — such as
appliances and furniture — 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.
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 www.homebuyingguide.org.