Credit mistakes potential homebuyers makeMaintaining a strong credit score is one of the most important things potential buyers can do if they want to qualify for a mortgage. A recent study by National Association of REALTORS showed that 34 percent of potential buyers believe their current score may hurt their future ability to purchase a home.1. Don t be late. Paying bills on time is essential since a person s payment history makes up 35 percent of the total credit score. A late bill payment of 30 to 60 days also gets reported to credit bureaus and stays on the credit report for seven years. This is one of the top credit mistakes potential homebuyers make.2. Applying for new credit. According the National Association of REALTORS applying and being approved for a new line of credit can cause concern with lenders who might take it as a sign that there s a higher risk of default due to increased spending. Bottom line if you are planning to apply for a home loan in the near future it may be wise to not apply for anything else.3. Having high balances. Just making minimum credit card payments isn t good enough for most mortgage companies. Those who hold high credit balances are often looked over as viable loan candidates. The rationale is that high balances and maxed out cards raises the debt-to-income ratio.4. Too much disputing. While it s a good idea to keep tabs on the credit report and dispute false charges doing so too often will be a red flag to lenders who may chalk it up to gaming the score instead.5. No credit history. Credit can t be established if there s none to begin with so if you have a thin credit file it may be a good idea to start building your credit history before applying for a home loan.If you would like to know more about a healthy home-buying budget and avoid credit mistakes potential homebuyers make contact The Jennifer Mack Home Team at 202-590-5570.For a listing price report (complimentary) on your current NoVA home visit www.HomeValueFairfax.com. By registering you receive a complimentary one hour listing consultation. We are the hardest working agents around
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