Credit Repair Tips by Lamont Hyde Real Estate & Loans

Credit Repair tips 101

Your credit score helps lenders see how you’ve handled debt in the past; the higher your score, the lower the interest rate on your mortgage might be. So, as you can imagine, it’s good to raise your score in preparation for applying for a loan

  • Stay on top of your score & report: Regularly monitor your credit score and review your credit report to stay informed about your financial standing and identify any potential issues.
  • Dispute/fix any errors on your report: If you come across any inaccuracies or errors on your credit report, take immediate action to dispute and rectify them, as they can negatively impact your credit score.
  • Be sure to always pay your bills on time: Timely payment of your bills, including credit card bills, loans, and utilities, is crucial for maintaining a positive credit history and avoiding late payment penalties.
  • Keep your credit usage under 30%: Aim to keep your credit utilization ratio below 30% by managing your credit card balances responsibly. Higher credit utilization can negatively affect your credit score.
  • Pay down any outstanding debt: Prioritize paying off outstanding debts, such as credit card balances or loans, as reducing your debt load can improve your credit score and overall financial health.
  • Don’t close out old paid off credit accounts: Even after paying off a credit account, it’s generally advisable not to close it, as keeping old accounts open can contribute positively to your credit history and length of credit.
  • Avoid applying for new lines of credit: Minimize new credit applications, as frequent applications can be seen as a red flag by lenders. Only apply for credit when necessary to avoid unnecessary inquiries on your credit report.

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Bottom Line

Your credit score serves as a reflection of your past debt management and plays a crucial role in determining the interest rate you may receive on a mortgage. A higher credit score often translates to a lower interest rate, potentially saving you a significant amount of money over the life of your loan. Therefore, it is highly beneficial to proactively work on improving your credit score before you apply for a loan. By taking steps to enhance your creditworthiness, such as paying bills on time, reducing outstanding debts, and maintaining a healthy credit utilization ratio, you increase the likelihood of securing a more favorable interest rate, ultimately making homeownership more affordable and financially advantageous for you.

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Lamont Hyde Broker / Owner of THG Realty & Loans

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