Page 1 - AAG159_Credit Dos and Don'ts Flyer

BETTER YOUR CREDIT

“Dos” and “Don’ts” During the Loan Process

Good credit is critical when it comes to obtaining the best interest rates
and terms on a loan of any kind. When it comes to securing a mortgage
loan, your credit can have a major impact on your odds of approval.

DO DON’T

Do stay current on existing accounts. Make any Don’t max out your credit cards. Try to keep your
payments on time and in full. This includes everything credit card balances 30% below their limit during the loan
from car loans to credit cards to utilities. Just one 30-day process. If you pay down the balances, do it across the
notice can cost you. board.

Do continue to use your credit as normal. Don’t consolidate your debt. When you consolidate
Whether your usual activity is minimal or frequent, all of your debt onto one or two credit cards, it will
changing your activity pattern could raise a red flag and appear that you are “maxed out” on that card and you will
lower your credit score. be penalized.

Do call me, your mortgage professional, Don’t apply for new credit or make a major
before making any address or credit changes, purchase. Each time your credit is pulled by a potential
no matter how big or small. Something that may creditor or lender, you can lose points from your credit
seem like a minor decision to you, could have major score. This includes store credit cards, student loans, and
implications on the mortgage process or your credit score. co-signing a loan for another borrower.

Do call me today to see how I can help! Don’t close existing credit card accounts. If you
close a credit card account, it many appear that your debt
ratio has gone up. Closing a card will affect other factors in
the score, including credit history. Even changes that you
perceive to be positive, can have a short-term
negative impact on your score.

Don’t change your employment. If this is
unavoidable, be sure you talk to your mortgage
professional. Employment changes that decrease your
income, render it commission-based, or place you in a
different field can cause red flags.

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