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Credit scores, along with your overall income and debt, are a big factor in determining if
you’ll qualify for a loan and what loan terms you’ll be able to qualify for.
| 1. |
Check for and correct errors in your credit report. Mistakes happen, and you could be
paying for someone else’s poor financial management.
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| 2. |
Pay down credit card bills. If possible, pay off the entire balance every month.
However, transferring credit card debt from one card to another could lower your score.
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| 3. |
Don’t charge your credit cards to the maximum limit.
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| 4. |
Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less
for problems after a year.
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| 5. |
Don’t order items for your new home you’ll buy on credit—such as appliances—until
after the loan is approved. The amounts will add to your debt.
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| 6. |
Don’t open new credit card accounts before applying for a mortgage. Having too much
available credit can lower your score.
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| 7. |
Shop for mortgage rates all at once. Too many credit applications can lower your
score, but multiple inquiries from the same type of lender are counted as one inquiry if
submitted over a short period of time.
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| 8. |
Avoid finance companies. Even if you pay the loan on time, the interest is high and it
will probably be considered a sign of poor credit management.
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This information is copyrighted by the Fannie Mae Foundation and is used with
permission of the Fannie Mae Foundation. To obtain a complete copy of the publication,
Knowing and Understanding Your Credit, visit http://www.homebuyingguide.org
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