4 Credit Tips For Potential Homes Buyers

4 Credit Tips For Potential Homes Buyers

Sep/21/2016 by Ivory Homes


Credit can get in the way when it comes to owning a new home.  Ivory Homes keeps the buying process transparent for new home buyers and we also work hard to help those with good, and bad credit scores. 


One of the ways we help those with poor credit is through our special program called IFF - Or Ivory Financial Fitness. 

Secrets To Keeping Your Credit Score High

Turns out our scores are not just a reflection of our ability, or lack thereof, to pay on time, but they tell a story of how we run our lives. If there's a blip in that story, say a 30-day late payment, the red flags pop up and all those years of paying dutifully can fall flat quickly.


Focus on your report

The most important information in your credit report is your bill-paying history. It bears repeating: Pay your bills on time every single month. A whopping 35% of your FICO credit score is tied to that payment history.

Another 30% of your score is based on your outstanding debt. Lenders expect you to use credit cards but to do so prudently. If you have three credit cards with a total of $30,000 in available credit, they will look at how much of that you're using. That's called your utilization rate. Don't max those cards out. In fact, don't even come close to it.

Figuring out your utilization rate is easy math. Add up all your outstanding balances and divide by your total credit limit, which should produce a number less than 1. If it hits 1, you're maxed out.


The truth about your credit limit

Most credit experts, including the credit bureaus, will advise you to keep your credit utilization under 30% of the total limit.

But here's a secret: Make sure you do it for each card. If you exceed that threshold on one card -- say you use 70% of that limit but only 10% on another card and nothing on a third card -- you're under 30% of the total limit, but you'll still get dinged for using so much of the limit on the first card.

How much of your limit you use in any given month can turn the tide on your card. If, for example, you max out your American Express card every month but pay it in full, you can still get slammed for hitting your limit. The credit card companies don't report if you've paid off your card; only how much you spent.


The Impact of Inquiries

Can requesting your own credit report bring your credit score down?

When you check your own credit report online it does not cause a damaging "hard inquiry" to be recorded. Only when a potential lender or creditor pulls your credit report for the purpose of extending credit does this type of record appear.

Each hard inquiry can cause up to a 7 point drop in your credit score. Multiple inquiries within a short amount of time, like when you are shopping for a mortgage, are grouped together to lessen the impact but must be within a 28 day period. The actual amount of damage depends on the number of inquiries, time period and other factors on your credit report. Each hard inquiry will remain on your credit report for 2 years.


Have Questions About Credit Repair?  Contact us Here.