Credit DON'Ts

To keep your credit rating as high as possible, DON'T do the following:

  1. Don't apply for several credit cards in a short period of time. Looking for new credit can indicate higher risk and lower your credit score (most often the FICO Score). However, if you're applying for a mortgage or an auto loan and multiple lenders ask for your score over a short period of time, it shouldn't be affected. These are seen as a single inquiry.
  2. Don't move your debt around. The best way to improve your credit score is to pay down your revolving credit instead of moving it around. Actually, owing the same amount on fewer accounts may lower your score.
  3. Don't close unused credit cards to raise your score. Closing an account doesn't make it go away. It still appears on your credit report and may be considered in the credit score.
  4. Don't open several new credit cards you don't need, to increase your available credit. This can backfire and wind up lowering your credit score.
  5. Don't quickly open lots of new accounts if you're starting out. New accounts lower your average account age, which isn't good. Rapidly adding accounts also looks risky for new credit users. Take it slow.
  6. Don't open new credit card accounts just to have a better mix. It won't raise your credit score and may even lower it. Only open new accounts as you need them.
  7. Don't think closing an account makes it go away. Closed accounts still show up on your credit report and may be factored into your score.

Please contact us about these topics or any other questions about your home financing. We want to put together the perfect mortgage solution for your special situation...and best wishes in this and all your endeavors!