Improving Your Credit 

Credit scores, along with your overall income and debt, are a big factor in determining if youíll qualify for a loan and what loan terms youíll be able to qualify for. 

1.     Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone elseís poor financial management. 

2.    Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score. 

3.    Donít charge your credit cards to the maximum limit. 

4.    Wait 12 months after credit difficulties to apply for a mortgage. Youíre penalized less for problems after a year. 

5.    Donít purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt. 

6.    Donít open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score. 

7.    Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time. 

8.    Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management. 

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, ďKnowing and Understanding Your Credit,Ē visit http://www.homebuyingguide.org. 

Reprinted from REALTORS Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS Copyright 2004 All rights reserved www.REALTOR.org/realtormag

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