IMPROVING YOUR CREDIT
If you are considering the purchase of a new home or refinancing your current mortgage, your credit will be a major factor in not only qualifying, but also how high your interest rate will be. Be aware of your current credit score. You can get an update on your credit by visiting www.annualcreditreport.com.
Credit scores are determined by many factors: credit card debt, on time payments, applying for numerous credit cards, using credit frequently, and the kind of credit you have used.
Lenders look for a consistent pattern of on-time payments. It’s important to be in the habit of paying your bills on time.
Credit is affected by your debt to income ratio. It helps to either raise your income or lower your debt. Pay down those credit cards that are maxed out.
Stability in where you live and your employment history also play a role in your credit. The more you move and change jobs the greater the chance your credit will be negatively affected.
When planning to purchase a new home or refinance, avoid making major purchases such as a car or an RV until after you have closed on either the purchase of the home or the refinancing of your current home. Your lender will also give you advice on how to improve your credit. Follow their counsel and your credit rating will improve.