Credit Tips: You Don’t Need to Wait Years To Apply for a Loan

Did you know after you clean up your credit, you don’t need to wait 12 to 24 months to apply for a home loan? You can actually apply within six months. The main reason online credit cleaning companies like to keep you around so long is because they want to charge a monthly reoccurring fee. The longer you stay, the more money they make.

Don’t fall for this common trick!

To learn more credit strategies, and how you can get a mortgage when the bank says no, get in touch with us!

Younger Doesn’t Always Equal Better

The world is your oyster, especially when you’re young.

In your 20s, you might embark on an exciting career, or fall in love and start a family, or hop on a plane and travel the globe. Why not? This is the time to explore, adventure, and launch yourself into adulthood.

Anything is possible.

Well, not anything.

Unfortunately.

When you’re young, you have thin credit. This means:

  • You haven’t had enough time to build up your credit history.
  • You make rookie mistakes—like paying bills late—that hurt your score. A lot.
  • Your credit mix, well, stinks. Compared to someone in their 60s, you likely haven’t owned multiple houses, cars, credit cards, insurance plans, etc.
  • You’re prone to dropping into the FDIC’s subprime market. One out of three people fall into this category with a credit score of 650 or less.

Being young is great—except when it comes to credit. But, it’s okay. The past is the past. Now it’s time to look to the future, improve your score, and own the home you’ve always dreamed of. Learn more at smartwithdebt.com.

Need to boost your credit score?

Check out these tips!

Credit Pitfalls: Paying off credit cards

One of the biggest credit pitfalls you might fall is closing accounts when they’re paid as agreed upon. Believe it or not, it isn’t good to close an account that’s already open and being paid as agreed.

For example, Jack has five cards, each with a $500 balance. However, only one is being used. Creditors will say, “Okay, he has $2,500 available, but he’s only using $500. That means his credit usage is good.” If Jack closes the four cards he isn’t using, creditors will say, “He has one card, and he owes $500. His credit usage stinks!”

 

Want to learn about other pitfalls and credit strategies? Go to smartwithdebt.com.

Credit Pitfall: High balance on a small credit card

One of the biggest credit pitfalls people fall into is when they have a high balance on a small credit card. For example:

You have a $500 credit card and charge $400 on it. When creditors see you’re using 80% of your available credit, they mark you as HIGH risk. Now, let’s say you have a $1,000 credit card and charge $400 to it. Guess what? You’re no longer a risk because you’re only using 40% of your credit instead of 80%. To creditors, this means you’re a responsible, savvy, frugal adult.

Go you!

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