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In today’s world, having good credit is essential for various aspects of life. It’s not just about securing a mortgage or financing a car; even everyday services like cell phone plans and utilities often require a favorable credit history. Yet, navigating the complexities of building, maintaining, and repairing credit can be challenging. Fortunately, The Howard Team at Fairway Mortgage Corporation offers valuable insights to demystify this process and help you effectively manage your credit journey.
Timely Payments: Late payments can significantly damage your credit score, so it’s essential to always pay your bills on time. Late payments have the most significant negative impact on your credit history, so prioritize timely payments to maintain a healthy credit profile.
Regular Credit Usage: Using credit regularly and responsibly is key to demonstrating your creditworthiness. Make sure to use your credit accounts each month, but be sure to pay off the balances in full to avoid accruing interest charges.
Maintain Low Balances: Keeping your credit card balances low relative to your credit limits is important for your credit score. Aim to keep your balances at 25% or less of the allowed limit on each card. This demonstrates responsible credit usage and can positively impact your credit score.
Keep Accounts Open: Closing credit accounts can negatively affect your credit score, especially if they’ve been open for a long time. Instead of closing accounts, consider keeping them open even if they’re paid off. However, be cautious of any annual fees associated with these accounts, and ensure that they’re worth keeping open.
Limit Credit Inquiries: Each time your credit report is pulled by a lender or creditor, it can have a small negative impact on your credit score. Avoid unnecessary credit inquiries, and only allow your credit to be pulled when absolutely necessary, such as when applying for a mortgage or car loan.
Handling Collections: If you have collections accounts on your credit report, it’s essential to handle them strategically. Instead of immediately paying off collections, first, inquire with the collector about a “pay to delete” arrangement. If they agree, ensure you receive written confirmation before making any payments. This way, the collection item can be removed from your credit report, which can positively impact your credit score. If they refuse a “pay to delete” arrangement, it may be best to leave the account alone, but be vigilant about preventing any further accounts from going into collections.
Don’t worry The Howard team has tons of resources to help you better understand your credit scores and how your financial wellness affects. Or to learn more about how to best move forward with a mortgage of your own, feel free to reach out to The Howard Team at Fairway Mortgage. At the link below.
Hey there! I’m Maureen, a community blogger and Real Estate Broker at American Classic Homes Real Estate in the Pacific Northwest. Here to help you find your perfect home and share tips on living your best life in the PNW. Let’s come home together to the Pacific Northwest!
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