Historically low interest rates make this an excellent time to purchase a Destin, Florida home or invest in a South Walton vacation property. Maintaining a good credit score (760 or above) is critical when buying a home, say experienced Destin Realtors [http://www.gulfcoastrealestatesales.com/buying.php]. Paying bills on time and keeping credit card debt under control (see our previous post) are just two of the things Destin home buyers [http://www.destinrealestatesales.com/idx/search.html?search_submit=true&search_city%5B%5D=DESTIN&idx=detached-single-family&minimum_bedrooms=&minimum_bathrooms=&minimum_price=&maximum_price=] can do to increase their chances of securing the best mortgage rates. Destin real estate agents offer these additional tips for improving your credit score:
Limit credit inquiries. Put off applying for new credit cards or loans until after your closing. Every credit application generates what is called a hard inquiry to credit reporting agencies. Opening one new credit account shouldn’t affect your credit rating, but a flurry of inquiries in the months before you apply for a mortgage can drop your score by 30 to 40 points. When you do apply for credit, try to make applications at the same time. Credit agencies treat multiple requests received within 45 days as a single inquiry.
Avoid closing credit accounts. Most people think that closing unused credit cards will help their credit score, but it can actually cause your score to drop as much as 100 points. Closing accounts decreases the total amount of your available credit which affects the important debt-to-credit ratio that banks use to gauge your credit worthiness. It’s best to wait to close accounts until after your closing.
Document payment records. Paying your monthly bills on time can improve your credit worthiness, but it’s up to you to bring your payment record to the attention of your lender. Monthly payments to utilities, insurance companies, cell phone providers, etc. are not typically reported to credit reporting agencies, but federal law gives mortgage applicants the right to document their payment history and requires lenders to consider it when evaluating loans.