Credit Mistakes to Avoid

By Morgan Saylor

One of the most frequent questions our mortgage bankers are asked by customers is how to improve their credit.
If you want to take your credit score to the next level, whether your score is in the pits or you wish to up your buying power for the house you’re saving for – here are the five things Daniel Bortz from trulia says you should avoid with your credit:

High balances – Maxing out your credit limit on your cards is a good way to drive your score down – strive to keep your utilization lower than 30%, or be prepared to take a hit.

Late payments – Missing a payment can quickly compromise your score. Making it a habit is even worse.

Be aware of your credit report – Keeping an eye on your credit report is good advice, period. Errors can occur

Too many lines of credit – At once. Having too many hard inquiries on your credit can lower your score.  Also opening a new credit card shortens the age of your credit accounts, which can also hurt the length of your credit history – one of the main factors in your credit score.

Closing old cards – This is a sure way to lower your credit limit and reduce the age of your account, which can really do some damage to your score. Trulia’s consumer credit expert advises keeping a purchase charged to each credit card at least once per quarter.

Want more info on understanding and conquering your credit? Check out our Understand Credit guide!



Tags: Credit Report, Credit, Buying, tips