The Top 5 Biggest Credit Mistakes
When you go to purchase or rent a home, having a good credit score is crucial. If you have a good credit score, it will be much easier to get a home loan, and you’ll likely get it at a better interest rate. Keeping that in mind, here are the five biggest credit mistakes that you could be making to hurt your score.
1. Maxing Out Your Cards
Maxed out cards cause your credit score to go down by anywhere from 10 to 45 points depending on what your current credit score is.
Did you know that the higher your credit score, the more it is impacted when you make a credit mistake? For example, if your score is 680 and you have a maxed out card, it can impact your score between 10 to 30 points, but if your credit score is higher, say 780 then maxed out cards will impact you between 25-45 points.
2. Making Late Payments
A 30-day late payment negatively affects your score anywhere between 60 and 110 points. That can be a major impact on your score. Make sure you pay your bills on time, and don’t let them get to 30 days overdue.
3. Debt Settlement
A debt settlement, or agreeing with your creditor to pay less than the full amount but considering it “paid in full,” drops your score from 45 to 125 points. Don’t do this. Pay your credit card bills in full.
A foreclosure can decrease your score between 85 and 160 points. Avoid this if at all possible.
5. Declaring Bankruptcy
Going bankrupt negatively affects your score and can drop it anywhere from 130 points to 240 points.
If you’re looking to improve your score, let me know. For a more detailed report on how to maximize your credit, reach out to me at 978-505-1466 and I'll get a detailed report out to you right away.
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