Helpful Tips to Avoid Credit Errors
Credit Mistakes Mistakes people make before applying for credit:
Ignoring your credit reports – The key to getting the best rates is good credit. The Fair Credit Reporting Act requires credit-reporting agencies to report accurate information, but it’s up to you to find any problems and to ask for the errors to be corrected. See more on Credit.
Closing credit card accounts – While paying down your credit card balances will improve your financial picture, you should not close credit accounts at this time, because reducing the amount of credit available to you can actually lower your credit score. You can always close an account at some time in the future when you know that you may not require access to credit for at least 6 months.
Getting in over your head – There is a difference between the maximum payment you can qualify for and the amount you can comfortably afford, you should look at your lifestyle, make a budget and find out what you can afford based upon that, otherwise you may find yourself sacrificing more of your lifestyle to keep that roof over your head.
Switching jobs – Underwriters like to see a steady history of employment and frown on job changes while your application is pending, unless the new job is in the same field and at the same or greater pay. If you do take a new job, it would help to have a contract for employment and have recieved at least one paycheck from your new job, it would also be helpful to you if you were past any grace period.
Large Deposits – Making large deposits, especially cash deposits during the 2 month bank statement cycles before applying, requires significant documentation as to the sources of such deposits under the Patriot Act.