MAINTAINING YOUR GOOD CREDIT
If you are looking to possibly buy a new home in the near future, here are a few tips to help you keep your credit looking good.
-Check your credit report. Find out if there have been changes to your account limits, and make sure there aren’t any errors. Look for any negatives on the report-many negative items should be removed after seven or 10 years.
- Don’t get close to card limits. About 30% of a FICO score is based on the ratio of the amount that is owed on active cards to available credit. But utilization on individual cards is important too; getting close to the limit on one card will also reflect negatively on a score. Pay down balances as much as possible.
- Keep accounts active. Accounts get closed when there hasn’t been activity on them for a while. Make small purchases on cards a couple of times a year-then pay them off right away-to keep accounts active and available credit up.
- Pay bills on time. This should be an easy one, but could prove challenging for people who could lose their jobs in the months ahead. Remaining proactive, and contacting the credit card company if problems arise in paying a bill is crucial. Payment history counts for about 35% of a credit score.
- Don’t apply for new cards. Store cards are tempting when they offer discounts at the register, but don’t bite. Applying for that card will have a negative effect on a score in the short term.
There is a credit crunch going on but there are some great FHA loans available (government backed loans) if you have good credit. And even the news media is now telling the truth-that there is an incredible amount of inventory selection, and now, as rates continue to decline (now typically 30 yr. fixed rate loans falling below 6% and maybe soon below 5% ), housing affordability is awesome. All of this is really an opportune time for you to buy if you do not have a house to sell first.
If you are ready to get into the market, give us a call! Or, if you are ready to explore the second home market, we can help too!
kjpremier@atproperties.com and maryannesimmons@maryannesimmons.com
