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How to Boost Your Credit Score To Maximize Borrowing Potential


Remember high school or college where there were the “cool” people?  You know, the ones that everyone knew were important.  There were always reasons why they were seen as important.   Some were very smart, others were great athletes, and a few were just good looking.

When you are seeking a loan to buy a house, you want to be seen as one of those special people.  One of the best ways to do this is with an outstanding credit score.  Here are some tips on getting good grades from the credit bureaus.

No False Hopes

No matter how cute the commercials are, those “free” credit score websites are not giving you the same score that lenders get.  The rate on these sites is probably a little higher.  Don’t rely on one of these to carry you through.  As Dad said, there is no substitute for hard work, so work hard on your credit worthiness. 

Revolving Credit

These are credit cards and lines of credit – credit given for something other than for a specific item like a home or car.  You might be pleased with your limit, but keep your balances low.  Your credit score will improve when you keep spending on revolving credit below 30 percent of the limit. 

Avoid Changes

You might think that closing old, unused credit cards will show how responsible you are.  You would be wrong.  Even if you haven’t used that gas company credit card in years, now is not the time to close it.  Credit agencies want to see stability, and closing a credit account is a red flag. 

You Don’t Really Need That New Truck Now

Buying that new truck two weeks before you move is not a good idea.  It is likely that your credit will be rechecked a few days prior to closing.  Remember, lenders and credit agencies want to see stability and adding a huge new liability just as the loan is about to close could squash the purchase. 

So Here’s The Deal

There are some very practical reasons for having the best credit score you can.  First, the better your credit score, the better the terms of the loan.  I’m assuming you want to pay the lowest interest rate possible, right? 

Second, a bad credit scored could cost you the house you want to buy.  In earlier blogs, I suggested that you prequalify so that you are the most attractive buyer to the seller.  Lenders will limit the amount you qualify for based on a poor or even average credit score. 

Finally, proper care and feeding of your credit history will lead to a more successful financial life.  People who safeguard their credit history aren’t usually the ones in financial trouble.  Make good credit decisions a part of your everyday life, and you will never regret the effort.