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Credit Do’s and Dont’s

Applying for a Mortgage Loan? Here are some quick tips on what you should and shouldn’t be doing when it comes to your credit.

DO STAY CURRENT ON YOUR EXISTING ACCOUNTS

One 30-day notice could cost you, and may mean the difference in the type of loan you qualify for.

DO CONTINUE TO USE YOUR CREDIT AS NORMAL

Changing your typical spending habits could raise a red flag and lower your credit score. Use your credit lines as you normally would.

DO CALL YOUR MORTGAGE PROFESSIONAL

Before making any big changes, consult with your lender to make sure that it won’t put your loan in jeopardy.

DON’T APPLY FOR NEW CREDIT

This means buying a car or opening a new credit card. Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score.

DON’T MAX OUT YOUR CREDIT CARDS

It’s good practice to keep your credit balances at 30% of their limit, or under. If you can pay off high credit card balances, do so.

DON’T CONSOLIDATE YOUR DEBT

You never want to be “maxed out” on your credit line. When you consolidate your debt onto one or two credit cards, you could be penalized.

DON’T CLOSE OUT YOUR CREDIT CARDS

Closing a credit card account means losing a line of credit, and this could make your debt ratio appear higher. Closing a card could also impact other factors that effect your credit score, such as account history.

DON’T PAY OFF COLLECTIONS OR “CHARGE -OFFS”

If you want to pay off old accounts, do it through escrow. Request a “letter of deletion” through the creditor.

Interested in finding out more about the loan process, and what you should and shouldn’t be doing when applying for a loan?

Mike Vanmansart is a local lender in the Hudson Valley and has helped hundreds of families finance and refinance their homes. Mike works hard to provide his clients with individual solutions tailored to their specific needs.

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