Frederick Md Homes For Sale – The Historic District

Keeping track of your credit score is an important part of maintaining good credit. With identity theft and fraud on the rise, it’s important to check with the three major credit-keeping agencies regularly, Equifax, TransUnion, and Experian. If you have a less than desirable credit score, there are sources to find mortgages for bad credit.

There can be a problem if you have too little credit.  This can lower your score.  Your score will improve if you build a record of maintaining your credit responsibly.  Not having any credit doesn’t help you build that record.  If you don’t have any accounts 6 months old, you might not even have a score.

Between the time your offer on a home is ratified, becoming a contract, and the time you go to close on the home, this is the time your loan is in process.  You should not do anything that will have an adverse affect on your credit score.

What kind of things have an adverse effect?  Glad you asked:

• Don’t apply for new credit of any kind.  No credit cards or lines of credit.  No new car loans.  None of that.
• Don’t pay off collections or charge-offs, unless your lender asks you to.  This is a hard one for people to accept.  Generally, paying off old collections causes a drop in your credit score.  When you do, it brings that particular account to the forefront of your credit.  In most cases, it counts as less of a negative, the older it is.
• Don’t close credit card accounts.  If you close an account, it will affect your ratio of debt to available credit which has to be under a certain ratio.  This accounts for 30% of your credit score.  If you really want to close an account, do it after you close on your home.
• Don’t max out or over charge existing credit cards.  Running up your credit cards is the fastest way to bring your score down; it can drop up to 100 points overnight.  You should try to keep your credit cards to below 30% of the available credit limit.
• Don’t consolidate debt to one or two cards.  Again, you don’t want to change your ratio of debt to available credit.  You also want to keep your good credit history on the books.
• Don’t raise red flags to the underwriter.  Don’t co-sign on another person’s loan, or change your name or address.  The less activity that occurs while your loan is in process… the better.

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The Highland Group