I'm sure that you realize that establishing credit and wisely managing your credit becomes easier when you know how. If you plan to finance real estate, either as a homebuyer or an investor, avoiding these common credit mistakes will help you with your credit score and save you money in loan costs.
1. First of all, you should be aware of the fact that using expensive or undesirable types of credit costs too much and is negatively scored.
2. Also, accumulating too many lines of credit or too many credit cards causes credit report remarks like "too much consumer credit."
3. Only paying the minimum due keeps balances too high.
4. Being mixed out on any credit card or line of credit causes deep drops in scores.
5. Taking cash advances costs higher interest and extra fees.
6. Exceeding limit and having to pay over-limit fees is a negative with.
7. Paying a day or more late may cause unnecessary late fees and increases interest rates.
8. Charging more than you can afford causes debts with no easy way to pay it off.
9. Letting someone else use your credit raises your debt-to-income ratio and possibly adds "too many consumer accounts" on your credit report, which lowers your score.
10. Ignoring credit problems causes unnecessary negative impact.
11. Failure to report address changes to creditors causes misplaced bills and late payments.
12. Using partial name, different names, and initials instead of whole name causes mix-ups. Use your full legal name to protect you from confusion with similarly named borrowers.
13. Failure to report name changes to creditors also causes confusion.
14. Not checking credit report frequently is one of the most common mistakes consumers make.
Keep in mind that you can buy real estate with poor credit, but you will save thousands in loan costs if you maintain good credit. A bad credit report leaves homebuyers with sub-prime loans, which have higher point charges, prepayment penalties, and higher interest charges, which therefore cost more money.