5 Credit Tips For Buying a Home or Refinancing

It’s is very common for Mortgage Loan Originators to provide inaccurate credit tips when working with their borrowers.

So we put together a list of things NOT to do when trying to improve a borrower’s credit.   Don’t do these things:

1. Don’t Pay Off Collections or “Charge Offs”. If you want to pay off old accounts, do it through escrow, making sure that the debt is yours. Request a “letter of deletion” from the creditor.

2. Don’t Close Credit Card Accounts or it may appear that your debt ratio has gone up. It also affects other factors in the score, including credit history.

3. Don’t Max Out or Over Charge Credit Card Accounts. Keep your balances below 40% of their limit during the process. Pay down balances if possible.

4. Don’t Consolidate Your Debt. When you consolidate all of your debt onto one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized.

5. Don’t Do Anything That Will Cause A Red Flag To Be Raised By The Scoring System. This includes adding new accounts, co-signing on a loan or changing your name or address with the bureaus.

If you still have questions, give us a call at (303) 444-5251 and we’ll be happy to help.

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