Rebuilding your credit score is a lot like building a house. You must start with a good, solid foundation and pay attention to the details. The mortgage experts at TexasLending.com offer this advice:
Know your credit score
According to the financial advisors at TexasLending.com, your credit score tells lenders a lot about you. For instance, a bank can determine how long you’ve been paying your bills on time and just how much of your credit you’re currently using. Keep an eye on your credit report and score and remember, a higher score opens more doors!
Mix it up
Try to keep a good mix of different credit accounts. TexasLending.com suggest having a proportionate number of installment and revolving loans. However, avoid applying for a bunch of different loans at once, as that can raise red flags for potential lenders.
Keep balances low
As one of Texas’s leading online mortgage firms, TexasLending.com advises clients to keep their credit balances to below 20% of their available credit. Anything higher than this can completely throw off an otherwise reasonable debt-to-income ratio. Paying bills on time is a big plus and one of the most important things that you can do to ensure your credit report remains favorable.
Don’t open accounts just to gain credit
The pros at TexasLending.com says that it can be a big mistake to open an account because you think you need it. This approach may actually do more harm than good. Opening several new accounts – or even one account if you only have a few – can lower your average credit account age. Credit account age is one factor that lenders look at when deciding to give you a loan or not.
Remember, fixing a broken credit report takes time. It is not an overnight process and it’s one that requires patience and strategic planning.
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