When you were applying for loans, credit cards, and even jobs, you might have checked your credit score once or twice. But after that, have you ever given it a thought? When you want to buy a house and apply for mortgage loans El Paso, it is quite important that you learn about your credit. Your credit score is one of the vital pieces when you want to obtain a home loan. Lucky for you, we are here to help.
In this article, we are going to discuss the common credit mistakes that you should avoid. So shall we get started?
Falling behind on credit card payments
Always prioritize your credit card payments and pay before the deadline. Put it as a reminder on your calendar and stay current on your accounts. After all, late payments will decrease your credit score, and you wouldn’t want that to happen, would you?
Maxing out your accounts and credit cards
The higher the available credit amount that you are using, the more it will impact your credit score negatively. As such, it is quite essential that you aim to use less than 30% of your available credit. This also helps you pay lesser each month so you won’t be working to pay your debts.
Closing out your credit accounts
You may not be using some of your credit accounts right now, so you’re probably thinking of closing these out. To you, it may sound like a good idea. Why? You might be thinking that in doing so, you decrease your available credit amount and increase your debt percentage. However, you should avoid closing these. Instead, keep them open but with no balance.
Consolidating debt of to one account or card
Don’t think of moving your current balance to another card. It might make your card appear to have a higher ratio of debt than the available credit. Always make sure that your debt to total balance on each of your cards is kept to a minimum.
Opening a lot of accounts in a short period
Yes, opening a credit card may help you buy all those things you want but it might be hurting your credit score. Avoid applying for a lot of credit cards during a short period. This might come off as a red flag. So try to keep your applications have spaces in between.
These are just some of the most common credit mistakes that you should avoid if you want to improve your credit score and apply for a loan. Follow our tips, and by the time you have found your dream house, your lender will approve your loan application faster compared to when you have a low credit score. Always keep these in mind and take the time to check your credit history for a few inaccuracies and ask for these to be fixed. After all, a higher credit score means you get to avail of a lower down payment. Now that’s pretty awesome.