Looking for ways to improve your credit score? Pay your cards and bills on time! Don’t open new cards and don’t close old cards. Wait until after closing to make big purchases, or shift debt from one card to another. if you are applying for a mortgage to purchase a new home, you want to improve your credit score – and at a minimum avoid hurting your credit – so that you can get the best rate possible.

Don’t Open Any New Credit Cards

Your credit score will drop if you apply for a new credit card  Getting a new card could be helpful, especially if it would allow you to transfer high-interest balances to take advantage of a lower rate. Just don’t apply for too many new accounts in a short period of time. That could hurt your credit score since lenders might think you were struggling financially or couldn’t handle credit responsibly.

If you are applying for a mortgage, do not apply for any new credit cards until you close on your new home.  Applying for a new credit card can damage your credit so much that you can not get your mortgage.  You can improve your credit score by paying off your credit card bills rather than opening new credit accounts!

Don’t Move Debt From One Card to Another

Transferring debt from a high interest rate card to a lower interest rate card – or even one with no interest rate at all – can hurt your credit.  The fact that the interest free card is an old card doesn’t matter.  Your credit score can still drop even though the transfer does not result in overall increased debt.  The credit scorers can still conclude that you are struggling financially, that you don’t know how to handle credit or that you now have additional credit available to you on your now empty credit card with the high interest rate.  Don’t make that switch or your credit score will drop. Paying off credit cards will improve your credit score but moving debt from one card to another will hurt your score.

Keep Old Cards Open

Credit bureaus consider the length of your credit history when calculating your score. Your credit score will drop if you close out old credit card accounts thatimprove your credit score to buy your dream home you haven’t used for a while. Closing old cards will shorten the length of your credit history also reduce, your available credit and increase your credit utilization ratio. Keep old accounts in good standing by making occasional purchases.  Don’t close out those old credit cards in an effort to tidy up your credit.  Leave it alone until you close on your new home!

You will be glad in the end that you didn’t do anything to lower your credit score!  Leave those credit cards open and it will improve your credit score!

Don’t Run Up Your Debt

Your credit utilization ratio is calculated by dividing the sum of your credit card balances by the sum of your credit limits to arrive at a percentage. A lower utilization ratio will translate into a higher credit score.

If you are planning on buying a home soon, go easy on your credit cards.  If you’re using a lot of your available credit, work on paying down your debt. You can do that by cutting expenses, looking for a second job or side gig, applying gifts or income tax refunds to your credit card bills, selling some of your belongings or consolidating high-interest credit card balances into one loan with a lower interest rate.  You definitely can improve your credit score by paying down your bills and not running up your debt.

Pay Your Bills On Time to Improve Your Credit Score

Your payment history is another important piece of your credit score. Late payments, accounts in collection, bankruptcies and other derogatory marks can stay on your credit report and affect your score for different periods of time. Pay your bills on time each month to improve your credit score. If you have any past-due bills, pay them off or contact the companies and work out repayment plans.  Remember that the credit scorers will look at whether you have had any late payments for several years back.

Lenders prefer “transactors” who pay off their credit card balances every month over “revolvers” who carry balances from month to month.  Trended 3D makes a distinction between those types of borrowers, giving lenders a better view of applicants use of their credit – and  awarding transactors with a credit-scoring advantage.

It Can Take Time to Improve Your Credit Score

The length of time it will take to improve your credit score and how much you will be able to increase it will depend on your current score, your payment history, your debt level, your income and how much you can afford to apply toward existing debts each month. Think of boosting your credit score as a medium- to long-term endeavor. Create a plan to address any problems so you can achieve your goal of owning a home.

Let Us Suggest Some Reputable Lenders to Help You

You don’t need to hire a credit repair company- you can do it yourself.  If the company you are talking to wants payment up front before they start to help you improve your credit card, run away!  We can suggest several reputable lenders who can help you improve your credit score with no cost to you!   Give us a call at 240-401-5577 or email us at lise@lisehowe.com.

Credit repair companies typically make you lots of promises that sound really appealing. You can pay just a small fee, they’ll say, and you’ll get a brand new credit identity or will be able to make negatives on your credit report disappear.

The only problem is, most of these promises are nothing more than empty words. Many companies will just take your money and do nothing for you or, worse, will encourage you to engage in high-risk behavior such as committing fraud by lying on loan applications.

To make sure you don’t fall victim to a credit repair scam, it’s essential you understand the signs that a credit repair company isn’t legit. You also need to know your rights as a consumer, because there are laws in place designed to protect you from unscrupulous people and businesses that prey on your desperation for a good credit score.

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