Top 10 Credit Tips During the Loan Process

first tip second tip third tip Don't apply for new credit of any kind. Every time you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately. Don't pay off collections during the loan process. Paying collections will decrease the credit score immediately due to the date of last activity becoming recent. Don't close credit card accounts. It will appear to the FICO that your debt ratio has gone up. If you want to pay off old accounts... It will affect other factors in the score such as length of credit history. 2 -50 Do it through Escrow. Validate the debt is yours. points Receive letter of deletion from creditor. If you have to close a credit card account... The amount of points you can lose on just one inquiry. Do it after closing. TOP TEN Make sure it is a more recent account. This list of credit do's and don'ts to adhere to during the loan process are to be used a guide when you are preparing to qualify to buy a home. While not taking this advice may not negatively affect your credit, there is a better than average chance that it will. CREDIT TIPS DURING THE LOAN PROCESS fourth tip fifth tip Don't max out or over charge on your credit card accounts. Don't consolidate your debt onto 1 or 2 credit cards. It will appear that you are maxed out on that card and you will be penalized. 50-100 points The amount of points you will lose immediately. Keep your credit card balances below 30% of their available limit at all times Wait until closing to save money on credit card interest rates. sixth tip eighth tip seventh tip Don't do anything that will cause a red flag to be raised by the scoring system. Do stay current on existing accounts. Like your mortgage and car payments. Do continue to use your credit as normal. Red flags are raised easily with the scoring system. If it appears that you are changing your pattern, it will raise a red flag, and your score could go down. * No new acconts * No co-signing on a loan 30-75 * No name or address changes with the bureaus points The less activity on your reports during the loan process, better. the The amount of points you can lose by being 30 days late just once. ninth tip tenth tip Do call your lender if you receive something in the mail from a creditor or collection agency that you believe may affect your score during the loan process. They may be able to supply your with the resources you need to stop any derogatory reporting to the bureaus. Do get a free copy of your credit report. Annual Credit Report is a free resource to the public that allows you to get a complimentary copy from each of the 3er 3 every 12 Months Credit Bureaus For more useful real estate info check out: www.sellingwarnerrobins.com © Anita Clark Realtor Source: http://sellingwarnerrobins.com/2011/07/buyer-tips-top-10-credit-dos-and-donts-during-the-loan-process/