Credit Score Tips To Help You Purchase A Home In South Florida
To maintain or gain a higher credit score, you must use and repay credit, rather than just holding on to some of your older credit cards. Old credit cards that are no longer used should not have too much of an effect on your credit score; as long as these cards are kept at a balance below 50% of your available credit. You should get a copy of your credit report and study it. Often, they contain mistakes.
Check for Errors
The Federal Trade Commission estimates that one in five credit reports contains an error serious enough to hurt one’s credit score and lead to adverse actions from lenders and other decision makers. Identifying and disputing credit report errors is one of the easiest ways to improve your credit score, especially since you can get each of your major credit reports for free once every 12 months.
Have Open Trade Lines That are in Good Standing
It’s very important that you have at least one open loan or line of credit to which you make on-time payments every month. Lenders relay account management information to the major credit bureaus every month, and the more accounts you have in good standing, the more positive information will find its way into your credit reports. This will either water down negative records or help expand a thin file.
While credit cards and loans both report to the major credit bureaus on a monthly basis, the former are far more accessible for the average consumer. Loans, of course, require repayment of whatever amount you borrow, but a no annual fee credit card that you pay off in full every month won’t cost you a thing.
When in Doubt, Get a Secured Credit Card
If you’re unable to get a “regular” credit card because of previous financial mistakes or you want an additional card whose credit limit you can control, open a secured credit card. Secured credit cards are easier to get than most other credit cards because the $200-300 deposit you’re required to place in opening one doubles as your credit line and thereby prevents overspending, which would cause problems for both you and your card’s issuer. You can also increase your spending power and available credit by simply adding to your deposit. When you close your account, you will get your deposit back, minus any outstanding balances.
Do NOT Show That You’re Desperate for Credit
Secured credit cards are attractive credit-building tools because they offer basically guaranteed approval. That’s important because repeated applications submitted within a short period of time indicate desperation to credit card companies, which could be a precursor to serious financial problems. You should therefore avoid applying en masse, and if you don’t get an unsecured credit card after a couple of denied applications, opt for a secured card.