Managing Your Credit

Your credit score is critical in determining qualification for a mortgage.  The higher the credit score the better the chances of getting approved. Generally higher credit scores will attract lower interest rates than lower scores. When planning to purchase a home ensure that your credit is meticulously managed.  The following should be noted;
  • Pay all bills on time. Schedule bill payments in advance or pay them on due dates to avoid late fees.
  • Ensure all revolving credit balances are maintained at no more than 30% of the credit limit. Plan on paying down card balances in advance of applying for a mortgage if the balances are higher than the 30% threshold.  It does not mean that you will not have satisfactory credit scores if balances are above the 30% threshold.  However, the lower the revolving credit balances the better the chances of higher score.
  • Monitor your credit report and check for errors/inaccurate reporting by the bureaus and be diligent in working with the bureaus to ensure they are corrected. Be on the lookout for identity theft items that may be reported on your credit and get these resolved expeditiously.

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