1. Closing old accounts: 15 percent of a consumer's credit score is based on the length of their credit history, closing old accounts that are no longer used can actually hurt your credit score.
2. Paying off old debt: If the consumer discovers some small balance on an old account , don't make the mistake of simply paying off the balance, assuming this will clean up a credit blemish. This could cause a decrease in the score.
3. Opening new credit lines: Buyers should always avoid any new actions that alter their credit picture after they have applied for a mortgage but before the transaction is closed. They should wait until after closing day.
4. Assuming you know your credit score: A consumer's so -called soft inquiry can generate a different number than the actual FICO score a mortgage lender sees.
5. Credit line increases/decreases: If a credit card company raises their credit line with a consumer, that consumer's CU ratio just improved. But keep in mind a creditor also has the power to lower a credit line if they see too much activity over long periods of time or missed payments on another creditor's file. This can drastically change your score by as much as 100 points!
This information can be found from the National Association of REALTORS. Always speak with your lender about these issues to make sure you have what you need to purchase a home.
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