We all know that if we have bad credit we can be penalized when it comes to interest rates on our loans.  This is true for mortgage loan as well.  Here are a few  little-known tips to improve your credit scores and give you a chance at better interest rates. 

First, you must remember that this is a process and won’t change your scores overnight.  It takes time and some diligence on your part.  If you’re planning on refinancing or purchasing a new home, you’ll want to use these tips 3-6 months before you start applying for a new mortgage. 

Second, be aware of credit repair scams.  There are lots of good and reputable companies out there that really can help you, but there are also plenty of scams out there.  The Federal Trade Commission website has plenty of information on the rules of credit repair.  You should get familiar with these rules to make sure you’re not doing more damage than good, and not being scammed. 

Third, get a current copy of your credit report.  You can go to www.annualcreditreport.com and request a report from each of the three major bureaus.  You want to keep inquiries to a minimum since each inquiry can impact your score by as much as 50 points (most won’t be that impactful, but some can be).  Mortgage and auto inquiries have a 14 day window before they get counted as multiple inquiries, so if you’re shopping lenders, do so within that timeframe so you don’t adversely affect your scores.

The last tip for the day is to not close all of your existing accounts.  If you have multiple credit cards, spread out the debt onto a couple of them so none of your cards have high balances.  Then, once debt is paid off, those long-term credit lines with balances available help boost your score.  These lines of credit show that you are able to have credit available to you and be disciplined enough to use that credit wisely. 

Taking the time to be up to speed on your credit, and using little tricks like these can save you thousands of dollars over your life time, so take a few minutes and make sure you are credit savy!

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