Now, more than ever, having a strong credit score is imperative for mortgage financing whether you are you looking to purchase or refinance a home.
With a conventional home loan, the higher your credit score is, the lower the interest rate you will receive.
Even with programs such as FHA and VA financing which have traditionally allowed for lower credit scores, there are now minimum credit score guidelines and higher credit scores will also equal lower rates.
Whether you are looking to purchase, refinance or just improve your overall credit situation here are five tried and true tips to keep your credit score as high as possible.
Tip 1: Never Close Credit Cards After Paying Them Off.
Closing open tradelines such as a credit card will actually lower your credit score, since you are eliminating established credit. If you have a credit card with a long history on it, your credit score may go down after closing the account.
Tip 2: Never Make a Major Purchase Right Before Having Your Credit Pulled.
Every major purchase you make and don't pay for in cash will hurt your credit score in the short term. One of the factors that affects credit scores, is the average age of your accounts. If you open a new account and then next month pull your credit report, the new account could lower your credit score, by bringing down the average age of your credit cards.
Tip 3: Never Keep the Balances on Your Credit Cards at Over 50% of Their Limits.
You are actually better off having balances on multiple credit cards and not having any paid off, as opposed to paying a single credit card off and having another card near its limit.
Tip 4: Never Leave Yourself Unprotected from Hundreds of Companies Who can Run Your Credit Monthly, Without Your Permission.
You may opt out and avoid these unnecessary pulls on your credit that happen monthly by choosing to opt out of these pre-screenings at the official website of: https://www.optoutprescreen.com
Tip 5: Never Allow Incorrect Information to Sit on Your Credit Report.
If your credit isn't perfect, there is a good chance that there is some incorrect information reporting on it.
It is imperative to pull your credit at the very least annually and try to remove any incorrect information, so that it may be removed from your report and raise your score. You may obtain a free annual credit report from the official website to do so at: https://www.annualcreditreport.com
As always, if you are looking to purchase or refinance a home, it is best to meet with a licensed lender, such as Strategic Mortgage and fully qualify, including a thorough review of your credit report.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage – AZBK#0909514 - NMLS#158804
Equal Housing Lender – Vasilios Kamboukos – NMLS#160440
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