10 Credit Tips For D.C. Metro Home Buyers!

Credit Resources for Home Buyers in Bethesda and Chevy ChaseAre you thinking of finding a new home in the New Year? There are beautiful homes on the market in Bethesda, Chevy Chase and the greater D.C. metropolitan area! And with mortgage interest rates staying attractively low, 2013 is shaping up to be a great year for home buyers.

There’s only one catch: qualifying for your mortgage in today’s stingy lending environment. Fortunately, we have 10  credit tips and some practical advice to help you!

Avoid These Credit Moves When Purchasing Your D.C. Metro Home:

1. Don’t apply for new credit. Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score. While “rate-shopping” doesn’t hurt your score in the long run, you’ll want to avoid having too many inquiries on  your file.

2. Don’t pay off collections or “charge offs.”  Making a payment on an inactive collection account can be worse on your score than if you’d left it alone. Strange but true! If you are aware of collection accounts in your history, leave them alone until you talk to your lender.

3. Don’t close credit card accounts. If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card will affect other factors in the score, including credit history.

4. Don’t max out or overcharge credit card accounts. Try to keep your credit card balances below 40 percent of their limit. Treat your creditors as equally as you can.

5. Don’t consolidate your debt. When you consolidate all of your debt on one or two credit cards, it will appear that you are “maxed out” on that card and your score will be penalized.

6. Don’t do anything that will cause a red flag to be raised by the scoring system. This includes adding new accounts, co-signing on a loan or changing your name or address with the bureaus.

Positive Credit Activity That Can Help D.C. Mortgage Applicants:

7. Join a credit watch program. Identity theft is a growing problem; credit watch programs can help you spot trouble before major damage is done. These programs also allow you to check your own credit reports regularly without damage to your score.

8. Stay current on existing accounts, such as your mortgage and car payments; one 30-day late notice can cost you.

9. Continue to use your credit as you normally would. Red flags are raised easily in the scoring system. If it appears that you are changing your pattern, it will raise a red flag and your score could go down.

10. Consult your financial advisor or accountant for more credit strategies. Even if you don’t need to rely on credit, having a steady history of responsible credit use is essential in order to have a good credit score. Rather than take on unnecessary debt, you may find ways to leverage credit to accomplish your financial goals. On the other side of the coin, if you have serious credit problems or significant errors on your file, you should consider obtaining legal advice.

Important Credit Resources for D.C. Area Home Buyers:

Check your credit history at least once a year. Obtain your free report at annualcreditreport.com.

Obtain your FICO score and enroll in credit protection programs, if desired, at MyFico.com.

If you need help getting your debts under control, talk to a qualified agent at the National Foundation for Credit Counseling.

These credit tips and resources should help you prepare for a mortgage! As your Accredited Buyer Representative, I have a network of reputable mortgage lenders who I trust with my clients. I will be happy to refer you to them for mortgage information!

In the meantime, if you would like information on neighborhood market conditions,or help with your DC Metro home searches, it would be my pleasure to assist you! Contact me for the latest home sale statistics, market trends, and the professional guidance you can trust.

My team and I will always deliver the reliable information and high quality service you deserve. Let us help you with your home buying goals!

Melinda Estridge
The Estridge Group-Long & Foster Real Estate, Inc.
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