Be Aware of Myths for Credit Improvement Before Applying for a Florida Home Mortgage

A major aspect of the Florida home mortgage process is the details of your credit report. Lenders will need to view this information in order to determine yourt rates of interest.

With that in mind, let’s look at a few myths regarding such a score. Before you try to improve yours, make sure you know how.

Myth: Paying My Debts Will Clear Up My Bad Credit History

Yes, you ought to pay off debts as quickly as you can. But if you make a late payment, that fact will appear in your credit report. The more these build up, the more your credit history will be damaged. Paying off all your debts at once will help you, but it won’t erase the appearance of late payments on your credit report. Pay your debts on time, every time. That is the surest way to prove to a Florida home loan lender that you are responsible when it comes to using credit.

Myth: I Can Pay Someone to Improve My Credit

Many credit reports have mistakes ranging from an incorrect address to missing an account in good standing and you can correct/disputre them. However, if you made a late payment, that’s a fact that cannot be argued.

Paying someone to improve your bad credit due to several late payments or having filed for bankruptcy is probably a waste of time. Companies who do this flood the credit reporting agencies with dispute letters which ask the creditor to verify the entry. If the entry can’t be verified, it must be removed from the listing. But if it can in fact be verified, then the agency will put it right back into your file after 30 days. If there are actual errors, you’re probably better off making the dispute yourself.

Myth: If I Cancel My Credit Cards, My Score Will Go Up

Not a great idea because your credit score is based, in part, on the length of credit history you possess. Creditors like to see that you have about two to three active credit accounts managed wisely. Opening and closing multiple accounts in a short period of time can also look irresponsible.

What Else Can You Do?

Here are just a few ways you can help maintain a good credit score and, therefore, reasonable Florida mortgage rates:

- Pay off debt rather than shuffling it from one credit card to another.

- Keep your credit card balances low; creditors like to see that you can manage credit responsibly.

- If you’re shopping around for credit (such as a Florida mortgage loan), you can shop around for up to 30 days before your credit score is affected. During that time, multiple lenders can pull your credit and it will only count against your credit as one pull.

-Don’t live beyond your means or overextend yourself financially.