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Five Bad Habits that are Killing Your Credit

Five Bad Habits that are Killing Your Credit

Author: Colleen Fox

The first step to buying your dream home is to check your credit score. A high credit score can mean lower monthly mortgage payments, which can mean less stress and more money to clutter your new home full of potpourri and coffee table books. However, the credit score system can be a bit complicated and difficult to navigate. To simplify things, we’ve outlined five factors that can lower your credit score:
 
1. Overdue bills.
 
Remember to pay your bills on time. Set up automatic payments, set an alarm on your phone, or continuously nag your significant other who you regretfully put in charge of finances. Do whatever it takes to pay them on time. But if you do miss a payment, focus on paying new payments first and then go back and pay old ones. 
 
2. Revolving debt.
 
Pay off your debt; don’t just move it around. Though your emotional, post-breakup shopping spree may not seem as bad when scattered over multiple credit cards, the debt is still there and it’s not going away. It’s better to have all your debt on one card, than spread over three or four. 
 
3. Removing old debt from your report.
 
Keep good debt on your credit report. Good debt that you’ve paid and handled well shows you’re responsible; even if your midnight Taco Bell runs say otherwise. Instead of opening new accounts, keep using old accounts with solid repayment histories.
 
4. Too many credit cards.
 
Don’t sign up for too many credit cards. If you’re contemplating buying a new wallet for the sole purpose of having more credit card space, we’re talking to you. Gather up all of your cards and pay off their balances, then pick one or two favorites to use for everything.
 
5. High credit card balances.
 
Try to use 30% or less of your revolving credit every month. Even if you pay off your debt on time every month, large balances are still bad. We suggest investing in a debit card. It may not earn you rewards to pay for your overpriced J. Crew sweaters, but it also won’t mess up your chances of moving out of your closet-sized apartment. 

Once you’ve successfully gotten your finances in order and you’re ready to make an offer on a home, visit GoldenKey to learn how you can save money with a commission free real estate agent. Save thousands in commission and have even more money for coffee table books.