There are three types of debt that can be reported to a credit bureau: Mortgages,installment loans (cars, furniture) and revolving debt (credit cards) How you use and pay off this debt will affect your credit score.
The best thing you can do for your credit score is to have a mortage and pay it on time. This shows that you are capable of having long term debt and paying it responsibly. It also counts more towards your credit history than a credit card because the amount of debt is higher and it carries more weight.
Don't neglect your cards or installment loans, though. Every time a creditor has to wait for a payment, they have to pay interest on that money to their investors. If you pay them on time every month, that will help your score. Late payments hurt them and they hurt your credit.
Here are the basic rules to follow to keep a good credit score:
1. Don't carry high credit card balances. If you go over 50% of your limit it will drag your score down even if you pay it off.
2. Late ever miss payments on anything.
3.Unpaid income taxes or property taxes have their own place on your credit score card. Don't pay these and a lien can be levied against your house, and they accrue interest and fees big time.
4. If a bankruptcy is in your past, stay on time with payments because late payments 7-10 years after the bankrutcy count as double points off your credit score.
We work with several lenders who can help you if you have credit issues. We have helped many buyers with issues in their past and they are all doing well in their new home!
We are the leaders in Cedar Rapids real estate for helping buyers to get qualified and find the right kind of loan! Visit IowaMortgagesolutions.com and talk to Mike Steger if you have had trouble at banks and credit unions.
For more information visit http://www.garywolter.com/ or wolterteam@aol.com
Gary Wolter-Realtor Cedar Rapids real estate expert
319-350-7901
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