Drug testing

14 Common Credit Mistakes

Establishing credit and wisely managing your credit becomes easier when you know how. You'll feel empowered by taking knowledgeable steps towards good credit, and you'll be on your way to purchasing real estate and greater financial freedom.

If you plan to finance real estate, either as a home buyer or an investor, avoiding these common credit mistakes will help you with your credit score and save you money in loan costs.

14 Common Credit Mistakes

1. Using expensive or undesirable types of credit costs too much and is negatively scored.

2. Accumulating too many lines of credit or too many credit cards causes credit report remarks like "too much consumer credit."

3. Only paying the minimum due keeps balances too high.

4. Being maxed out on any credit card or line of credit causes deep drops in scores.

5. Taking cash advances costs higher interest and extra fees.

6. Exceeding limit and having to pay over-limit fees is a negative with creditors and causes "high proportional amounts owed" remarks on credit reports and subtracts credit score points.

7. Paying a day or more late causes unnecessary late fees and often increases interest rates.

8. Charging more than you can afford causes a snowball effect of amassing debt with no easy way to pay it off.

9. Letting someone else use your credit, such as co-signing a loan, raises your debt-to-income ratio and possibly adds "too many consumer accounts" on your credit report, which lowers your score.

10. Ignoring credit problems causes unnecessary negative impact. Talk to creditors before being late and make arrangements. This action heads off negative reporting to credit bureaus.

11. Failure to report address changes to creditors causes misplaced bills and late payments.

12. Using partial name, different names, initials instead of whole name, or forgetting Sr. or Jr. causes mix-ups. Use your full legal name to protect you from confusion with similarly named borrowers.

13. Failure to report name changes to creditors also causes confusion.

14. Not checking credit report frequently is one of the most common mistakes consumers make.

You can buy real estate with poor credit, but you will save thousands in loan costs if you maintain good credit. A bad credit report leaves home buyers with sub-prime loans which have higher point charges, prepayment penalties, and higher interest charges, which therefore cost more money.

For instance, a mortgage loan of $150,000, 30-year, fixed interest rate of about 5.72 percent costs around $870 a month. Poor credit scores raise the interest rate over 9 percent and the payments over $1,200.

As you see from these payment differences, good credit means that you can finance a more expensive house with the same income, or save $330 each month.

Credit Requirements for Mortgages

Credit needed to buy real estate is not the same as good credit. Besides your credit score, mortgage lenders consider your debt-to-income ratio and other credit matters, unlike other credit grantors. Your debt-to-income ratio is the comparison of mortgage payment, including taxes, interest, and insurance to your total gross monthly income. Real estate lenders also consider your employment qualifications and your overall debt ratios. Understanding the difference between good credit and the credit needed to obtain real estate financing helps you buy houses!

Avoiding credit mistakes helps you get strong credit and keeps your credit scores up.

(c) Copyright 2005 Jeanette J. Fisher. All rights reserved.

Professor Jeanette Fisher is the author of "Credit Help! Get the Credit You Need to Buy Real Estate," "Doghouse to Dollhouse for Dollars: Using Design Psychology to Increase Real Estate Profits," and other books. Jeanette and her husband chose real estate investing to be able to care for their daughter with special needs. While buying and selling millions of dollars worth of real estate, the Fishers were forced into becoming credit experts. Forget what you've been told about credit. Get the credit you need to buy real estate. Real Estate Credit Help Center: http://RE Credit Help.com/

limousine chicago service
In The News:

Balance Transfers Introduction

Credit card balance transfer involves using a credit... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time... Read More

Read and Understand Your Credit Card Statement

Have you ever looked at your credit card statement and... Read More

Consumer Credit Reports

A consumer credit report is a factual record of an... Read More

How A Prepaid Debit Card Can Help You Rebuild Your Credit

Consumers today are up to their eyeballs in debt. And... Read More

Saving Money with Credit Cards

Having a credit card is a wonderful convenience for those... Read More

How To Boost Your Credit Score

Years ago your credit score was a big secret, known... Read More

Credit Cards and How To Choose Them:

It may seem like a simple question but its important... Read More

Credit Reports: Find out why you have been refused Credit.

You may already have 2 or more credit cards in... Read More

Credit Report ? Watch Out for Parking Tickets

The economic downturn of the last five years has affected... Read More

Free Credit Report ? Watch Out for Scams

Many people may still not be aware of an amendment... Read More

Credit Report Secrets: Do You Know What They Reveal?

If you've ever applied for a credit card or loan,... Read More

Lower Your Credit Card Interest Rate Now!

With today's credit card companies, there are many opportunities to... Read More

Credit Card Incentives

Credit card companies want your business. After all, lending money... Read More

Is Plastic Making You Happier?

If you're like most people, you probably own at least... Read More

How a Credit Card Can Be Your Friend

We have all heard countless stories of people over their... Read More

Which Business Credit Cards with Reward are the Best?

Thinking of applying for a credit card with a reward... Read More

Practical Suggestions for Protecting Yourself From Identity Theft

It's no surprise that thousands of Americans are victimized by... Read More

Rebuild Your Credit the Right Way the First Time

If you are one of the millions of people out... Read More

What is the Check 21 Act?

Check 21 is the common name for the Check Clearing... Read More

Opting For A Credit Card? Check Out Certain Terms

You've just received a "pre-approved" credit card offer in your... Read More

7 Ways To Squash Identity Theft

It is the scourge of our age: identity theft. Thieves... Read More

Credit Report ? Check Yours Regularly - and for Free

In the twenty-first century, there are few documents that have... Read More

Understanding the Process of Credit Counseling

Many of us have seen the advertisements on television. "Get... Read More

Credit Help for Real Estate Financing: Credit Scores

When you buy real estate, lenders run all of the... Read More

us led manufacturer induction street light supplier Pete's produce ..