1) Three months prior to securing your mortgage, DON'T apply for, close, or pay off any credit cards, loans, or other kinds of credit without speaking to your mortgage professional first. Any one of these actions, as innocent as they might seem, could seriously affect your credit score, adding significant costs to your mortgage should your score suddenly drop.
2) If you have a credit card account with an excellent credit history, DO use it but use
it strategically. In other words, use it only for small purchases that you can easily pay off
completely at the end of the month. Remember, creditors like to see evidence of
stability, so the goal here is to keep the good reports coming month to month without
falling into the same financial traps that led to credit challenges in the past.
3) If you don't have a credit card, DO get a secured credit card. This is a great way to
rebuild or establish credit quickly. Because this account is secured by funds that you
deposit (typically between $100 and $400) you're not seen as a great risk to the card
issuer because of your initial investment. Again, use this card strategically to build a
strong credit history. Pay your bill on time every month, and it won't be long before you
qualify for an unsecured credit account.
When applying for a mortgage, every point in your
credit score can make a big difference.
4) Finally, DO monitor your credit. Ask your mortgage professional to refer you to a
professional credit repair company you can trust. Having an experienced professional
on your side will allow you to focus on your long-term credit goals without having to
make reestablishing your credit a second career.
If you or anyone you know has any questions about credit scores or what can be
done to repair them, please don't hesitate to call. We'll be glad to review your
credit and see what, if anything, needs to be done to help meet your financial
goals and needs.
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