When preparing to buy a home, it is essential that you are proactive to keep your credit score in check. A good credit score will make it easier for you to get a low interest rate on your mortgage. On the other hand, a bad credit score will make it hard to get approved for a loan. Your family deserves a beautiful home, which means that you need to be careful to manage your finances.  Here we are going to discuss Kick These Bad Credit Habits if You Want to Buy a Home.

Whether you are actively looking for a home or getting ready to buy in a year or two, you need to improve your credit score. Here are a few tips to help:

Bad Habit #1: Late Payments

To get a high credit score, you need to show that you are a responsible buyer. It is easy to mistakenly assume that a late payment here and there won’t be a big deal. But, a late payment will have an immediate effect on your credit score. Even one or two late payments could potentially reduce your credit score by 50 points.

The best way to avoid late payments is by setting up automatic payments so that your accounts are always paid on time.

Bad Habit #2: Making the Minimum Payments

You might be feeling good to keep up with minimum payments each month. But, minimum payments result in high interest costs and a long payoff schedule. To improve your credit score, you need to pay down the balances and improve your debt-to-income ratio. Instead of sticking with the minimums, try to pay as much as you can each month.

Bad Habit #3: Maxed Out Credit Cards

Your debt-to-income ratio matters, and maxed out credit cards will have a direct impact on this ratio. It is estimated that a maxed out credit card can reduce your credit score by up to 30 points. If lenders see that you have credit cards that are maxed, then they will be hesitant to offer you a loan.

Bad Habit #4: Too Many Credit Lines

Many retail stores offer credit cards as an incentive to get shopping rewards points or zero-interest financing. While it might seem like a good idea for the initial purchase, the truth is that another credit card might make it harder for you to get ahead of your financial plan. Even though zero interest sounds appealing, many times the interest costs will be retroactive if you don’t pay it off in time.

Be selective about the credit cards that you choose to apply for, and try to minimize it to just a few cards. Evaluate your budget. Instead of getting another credit card it is better to cut back on necessary spending. If you need to use a credit card to make a retail purchase, then you might reconsider the purchase.  Kick These Bad Credit Habits if You Want to Buy a Home.

At DUFFY Realty, we are here to help you buy the home that you have always wanted. Our team will work hard to guide you with your finances so that you can be prepared to qualify for a loan. Call us today for more information about buying a home for your family: (678) 318-1700

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