5 Credit Mistakes to Avoid When Buying Glenbrooke Condos

5 Credit Mistakes to Avoid When Buying Glenbrooke Condos in Bridgewater NJ

You’ve clicked through dozens of online listings searching among Glenbrooke Condos in Bridgewater NJ for the “perfect” home, but before you set foot on an open house, make sure that your credit score is at its best. Since lenders decide on your eligibility for loans based on your credit score and report, it’s important to have a glowing credit history.

Unfortunately, it’s a lot easier to hurt your credit score than it is to improve it. Here are the 5 most costly-mistakes you can make and how to avoid them.

1. Having a bad payment history. Since your credit history makes up 35% of your FICO credit (the most commonly used credit score), your on-time payment percentage could make or break your score.  Lenders want reliable borrowers who can repay their debts in timely manner. To this end, consider setting up automatic payment reminder on your bills each month.  With each timely payment you make, you’re raising a positive history on your credit report a notch higher.

2. Maxing out your credit cards. Over-limit and high credit card balances is a top concern for lenders. The reason: the higher your spending habits are, the more likely you’ll be unable to repay your debt. Try to keep your credit utilization as low as possible, preferably never exceeding 30%. Doing so will indicate that though you are using credit, you are not heavily relying on it.

3. Not keeping old accounts open. The length of your credit history accounts for 15% of your score so the longer you keep them open, the better. Also, when you close your old accounts, you are shortening your overall account length which can possibly hurt your credit score. So what to do with paid off credit cards? Keep them open while you tuck them away safe inside your drawer. That way, you won’t be tempted to use them (if you don’t want to, anyway) while at the same time, you’re building your credit history’s length.

4. Not maintaining a good mix of credit. While it is important to keep credit balances low, your credit score will be higher if you have a good mix of credit. It basically means you have several different types of credit lines current and open. In fact, it accounts for 10% of your credit score. Having a good mix of credit shows that you are capable of paying off several debts on time.

5. Applying for too much credit. Each time you apply for credit, the average length of your credit history decreases. Having several credit applications in one year not only suggests that you are desperate for credit, it is also frowned upon by potential lenders.  New credit accounts for 10% of your total FICO score.

If you’re guilty of making one of the mistakes listed above, now is the time to build up to credit score again. Banks and potential lenders rely on your credit scores in deciding whether or not you’re qualified for a loan and for how much money. So before you become one of the proud new owners of Bridgewater NJ homes sold, make sure to improve your credit score first.

Visit www.CNJHomeFinder.com to know more about homes for sale in the Bridgewater NJ area.

Looking for a new home in Bridgewater NJ? Call me, Mike Downer at 732-302-1771 or send me an email at mike@mikedowner.com. As one of the Best REALTORS® in Bridgewater NJ, I’ll be glad to talk with you and assist you in all of your real estate needs.