Too many Americans live beyond their means with credit cards and fancy cars. I’ve been known to buy nice things on my credit cards (mountain bike, video camera, etc…) so I have no room to talk. I just hate seeing bad credit scores and having to tell hard working people they don’t have “A” credit, which usually means higher interest rates and payments. It is just not fun; I wish we all had good credit! I have four suggestions/advice I wanted to share with you guys:
1 – Credit Cards are not bad; they can help raise your score, but only if you use them right. I recommend everyone have at least one but not because they are broke and need it. It is good to have a card with MORE than 50% of the balance freed up (available credit). It is good to always pay more than the minimum. If you have a card that doesn’t charge interest for 30 days, instead of paying cash, put that TV on a credit card and pay it off within 30 days.
2 – DO NOT have a 30-day late mortgage payment. If you are tight one month, pay your mortgage first before your credit cards or car. A 30-day mortgage late will lower your score faster than you can blink.
3 – Don’t finance expensive cars unless you make enough money to cover double your monthly credit card, car, mortgage payments, and other expenses; otherwise the likelihood for late payments increase, and come time to refinance, your Debt To Income (DTI) would be too high.
4 – Do not have your credit ran a bunch of times. Make sure to tell companies not to run your credit unless you agree to it and make sure it’s necessary. I’m not trying to toot our horn, but our company runs your credit only once and shops up to 300 lenders based on that one report. Shopping each bank as a consumer and having your credit ran each time would not be good for your score.
I hope this helps! If you have any mortgage related questions feel free to contact me at ryan@GoMetroLoan.com or 805-540-0866.