Avoid major mistakes that affect your credit by using these tips.
When you’re ready to buy a home, your credit can be your best friend or your worst enemy. Good credit will help you maximize your mortgage affordability, while bad credit could make it nearly impossible to get a home loan at all.
We want to help you improve your credit score so you can get into the right home. Here is a list of bad credit mistakes to do your best to avoid:
- Missing your rewards. If you’re smart, you’ve picked a credit card that gives you rewards. Don’t get lazy about using them! Utilizing your rewards can keep more of your money in your own pocket or, better yet, free more of it up to pay off some of your debt.
- Getting too automated. In our modern era, it just makes sense to automate your payments. That doesn’t mean you should stop looking at your statements, though. Read through your statements to make sure you’re charged what you expected and that your bills are paid on schedule.
- Loving your credit card. To determine your credit score, lenders will look at more than just your bill payment. They’ll also want to see that you’re not using too much of the credit that’s available to you. Overusing your credit could indicate tight cash flow – a bad sign to lenders. Try to keep your credit utilization ratio below 30 percent (e.g. only using $300 of your $1,000 credit limit).
Ideally, your mortgage lender should be of help and offer guidance on how to avoid bad credit mistakes. If you want that kind of help during your California home buying process, contact Ranch & Coast Mortgage Group Inc. in Solana Beach. We’re here to share our expertise so you can skip the mishaps and get into your dream home!