Start Your Property Search

Avoid These 4 Common Credit Score Mistakes

Here’s what you need to know about keeping your credit score high. 

In this tough market, you need every advantage you can get. That’s why having the best credit score possible is so important. Today, let's discuss four things to steer clear of if you want to maintain a healthy credit rating:

1. Closing credit cards or accounts. Closing a credit card or account can negatively impact your credit score by reducing your utilization. Keeping cards open with low balances showcases responsible money management and a lower credit utilization ratio, portraying you as a prudent financial manager.

2. Hard credit inquiries. Hard credit inquiries can significantly lower your FICO score. While a single inquiry might not have a severe impact, multiple inquiries, especially during a credit-sensitive process like buying a home, can lower your score. Minimize unnecessary inquiries to maintain a stable credit score.

"Limit how often you pull your score."

3. Multiple inquiries in a short period of time. Opening several new accounts rapidly lowers the average age of your accounts, categorizing you as a higher risk. Be cautious about initiating too many inquiries at once, as it can negatively affect your credit score.

4. Changing credit utilization habits. If you open a new credit card, avoid changing your spending habits or credit utilization. Increasing balances and altering usage patterns during a critical period can be perceived as higher-risk behavior, leading to a decrease in your credit score.

In a market with elevated interest rates, every positive move counts. Improving your credit score can enhance your eligibility for favorable programs. It's essential to be mindful of these credit-related factors to navigate today's market successfully. If you have further questions or need guidance, feel free to call or email us. We are always here to help.

Post a Comment

Determine how much home you can afford, connect with a local lender and more.

Learn more