Don’t Close Credit Accounts!
It may be tempting to transfer your balances to cards with lower interest rates and close the old accounts. However, that will have a negative effect on your credit score. Closing the accounts will affect your credit utilization and length of credit history. For example, you may have a credit card that you’ve used and made payments for 3 years. If you transfer the balance to a new card and close the old one, you’ll erase the 3 years of credit history and reduce it to the amount of time you’ve had the new card. This will lower your credit score. Also, lenders need to see a longer credit history.
Don’t Get Behind on Payments!
This tip is short and simple. While in the process of buying a home, make sure you don’t fall behind on your account payments. Doing so will have a negative effect on your credit score. Also, lenders will see you as a credit risk and more likely to default on your mortgage loan.
