Credit is almost a buzzword in the world of home buying, but it has such a huge bearing on how you finance your home and (perhaps more importantly) how much you can finance all together. And while you may be well apprised of how you can improve your credit score, there are a few things that can silently damage it that you may be overlooking.
Consider this your credit score alert! Avoid the following mistakes to keep your credit score outstanding.
1. Too Many Credit Inquiries or Requests
Every time you apply for credit, have your credit run, or request credit (whether on an existing account or a new one), your credit report registers an inquiry. Believe it or not, those inquiries are actually damaging to your overall credit score.
Essentially, each credit inquiry or request acts as a strike against you and can gradually bring your credit score down over time. Keep in mind, however, this isn’t 3 strikes and your out. Consider each inquiry a mere strike in a long 162 game season: they don’t help your stat sheet, but you’re still in the game!
2. Late and Missed Payments
While most lenders are willing to forgive the one-off missed payment or late payment, they don’t go totally unnoticed. Especially if you have large payments such as student loans, an existing mortgage, or car payment. Lenders with large debts to reclaim tend to be a little quicker to pull the trigger on a credit event than paying your electric bill a few days late.
Nevertheless, if you’re the proverbial procrastinator and frequently pay your bills late, you’re not doing yourself nor your credit score much of a service. Plan ahead and pay on time!
3. Little Things Make a Big Difference
Remember that air conditioning bill you didn’t pay 10 years ago? Probably not, but your credit score (and your serviceman) most likely do. Small debts that go unpaid typically don’t go forgotten especially if your debtor decides to turn you over to collections.
This certainly isn’t a total black eye on your credit score. Many of these small debts can be rectified by simply pulling a credit report, contacting the debtor or collector, and paying the amount owed. Just make sure that these debts are cleared from your credit report in the months to follow.
4. Wrong Information
Sometimes, dings on your credit aren’t your fault at all. If you’re name happens to be John Smith, you’re probably in trouble. The fact of the matter is that lenders, creditors, and even reporting agencies make mistakes and sometimes they show up incorrectly and erroneously on your credit report.
Credit inaccuracies, however, require some effort to remove. Mainly, you must be patient when working with the reporting agencies and compliant as well. It may take a few months for the inaccuracy to be corrected and reflected, but it’s worth the effort to improve your credit.
Get Credit, Use It Wisely
In today’s age, getting credit might not be as difficult as it used to be and using it doesn’t come with too many obstacles either. If you’re looking for a mortgage for a new home, it doesn’t get much easier than applying through Tidewater Mortgage Services, Inc.
One call or a few simple clicks through our online credit application can get you pre-qualified for the mortgage you need for your new home. Have questions? Contact one of our experienced loan officers and get on the right track to your dream home!