Get a Lower Interest Rate - Credit Tips

A lower interest rate on a home loan can save you 100’s of thousands of dollars.

Improve your credit score and lower your home loans interest rate.

Credit Card Balances

Your credit cards have an available credit limit. Keeping the balance below 30% of the available limit is the quickest and best way to improve your credit score. If that is not possible, try to get the balance below 50% of the available credit limit.

You may be paying your credit card off monthly and still allowing your balances to reach too high a level. Be aware of when your statement ends and when your credit card company reports to the credit bureaus.

Helpful Tip: Pay your balance down twice a month vs once a month. The same amount of overall payments can limit the balance from ever reaching a high level.

Don’t Close Past Lines of Credit

This can be counter intuitive. However, if you close a line of credit, you lose the positive credit history you have built. Pay the balance to zero and don’t use the line of credit anymore, however don’t close it out if you plan on applying for a mortgage in the near future.

Don’t Open New Lines of Credit

Beyond adding a credit inquiry that will slightly drop your score, new lines of credit will bring your score down due to lack of history. Watch out for the offers to open a credit card at retail stores, the discounts likely won’t be worth the negative impacts on your credit card. However, is important to have at least one line of credit for a year or more. It is important for first time homebuyers to build credit with a credit card, while following the other best practices for having a high credit score.

Make On-time Payments

The biggest drop in your credit score can come from missed payments. Set up auto-pay! Don’t just rely on auto-pay though, use it as backup to you manually making payments. Avoid interest costs and high balances with manual payments and use auto-pay as a minimum to not miss payments.