If you are in the market for your first home, or have struggled with your credit in the past the first step to buying your dream home is to build your credit so that you can get a mortgage and hopefully at a good rate! Here are three tips to help you:
1. Don’t have too many credit accounts. You do need to open a few lines of credit to establish your credit record, but you don’t want to have too many. One to three accounts is usually sufficient for establishing credit, but don’t open them all at once. Opening these accounts and maintaining them is key.
2. Open a variety of credit lines. Credit cards, department store cards, auto loans, bank loans, etc. are all good ways to open your credit lines. To truly build your credit you should try to have a variety of credit accounts, not just several credit cards.
3. Maintain your accounts wisely. Don’t open all of your accounts at once or you will actually lower your credit score. You also need to use your accounts. If you open them but leave them at a 0 balance, they don’t help build your credit record since it doesn’t show a lender that you have a history of responsibility in paying off your bills. To truly build your credit you need to use your accounts, but not to their limit – 30% of your credit limit is a good number to shoot for, and you also need to pay your bills on time every single month, with no exceptions.
Thinking of buying or selling a home in Sussex County? Give us a call at Cooper Real Estate Associates and put us to work for you – 302-629-6693.