Common Credit Mistakes That Could Affect Home Buying

Buying a Home in Raleigh NC? Avoid These Mistakes!

We all tend to make a few credit mistakes when we’re younger, especially during our college days. Buying a new car when we don’t need it or can’t afford it, racking up credit card bills and more. Most of the time, the mistakes we make won’t break our future decisions when it comes to buying a home in Raleigh NC. There are, however, several commonly made credit mistakes that could. Below, you’ll find a few mistakes that might prevent you from getting a mortgage.

Late Payments

When applying for a mortgage loan, bankers look at only a few things. The biggest factor is credit scores. The majority of lenders use FICO scores to determine whether or not your credit is worthy of a loan. Did you know that 35 percent of the FICO score is made up of your payment history?

Those that habitually make late payments on credit cards or other bills will see a dramatic drop in the score. If that’s the case for you, tighten up on payments. Make sure you’re paying them on time. Even if you only pay the minimum payment on credit card bills, do so diligently.

One of the critical factors bankers and mortgage brokers look at when deciding the terms of your home loan is your credit score. Most lenders use the FICO score to assess your creditworthiness, 35 percent of which is determined by your history for paying your bills on time.

If you have a problem remembering to pay the bills, mark the due dates on your calender, set up email alerts or schedule payments online, in advance, so that they’ll automatically be paid on the due date. Some companies even allow you to opt in to getting a text message alert on your phone when a bill is due.

Find a strategy that works for you and use it to your advantage. Make payments on time and get your FICO score up. Buying a home in Raleigh NC depends on this!

Overusing Credit

While we are on the subject of FICO scores, there’s another big determining factor that deals with the amount of credit you owe. 30 percent of your score is determined by how much credit you currently have charged.

According to money.usnews.com, “Using more than 30 percent of your available credit on any of your cards at any point during the month can cause your credit score to drop. If you typically carry a high balance on your cards throughout the month, now is the time to monitor them carefully and make sure you’re not exceeding that 30 percent threshold. If you start to get close to it, make a payment as soon as you can.”

When buying a home in Raleigh NC, there's more to it than house hunting and signing paperwork. You must apply for a loan. Sometimes, credit mistakes can hinder that process. Make sure you're doing all you can to keep up with your credit score! For more tips, visit back with our next blog post!

If you are considering buying a home in Raleigh NC, call Roark Premier Team. We are here to help you search for the home of your dreams. For more information on buying a home or to ask our real estate agents any questions, feel free to contact us!

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