Doing the Credit-Score Shuffle for a Mortgage Application

The credit score is the single most important item in every individual’s financial portfolio. It means the world in terms of borrowing power, advantages for lower interest rates, and negotiating lower fees. Most people don’t have a clue about what their score is, how it was determined, and what it means.

Pay the Minimum, Pay on Time

If you’re unable to pay off credit card balances in full, at least pay the minimum due, on time, every month. Otherwise your credit score will plunge.

It’s not too late to turn the negative picture around, but it will take time. If you don’t want to make things more complicated to handle, then take notes. Start today organizing all your bills and, assuming you can pay them, begin to pay each bill on time each month.

To help create a positive attitude about money, write the words “Thank You” in the memo section and any check you write. Be thankful that you have the money to pay your bills and be thankful for the service that was provided to you. If you have a positive attitude about money, you may begin to see money flowing more easily into your life.

If you can pay more than the minimum, do so. It takes about two years to turn around a negative credit history. But it can be done. You have to be diligent and consistent. A pattern of regular, on-time payments is the key.

Along the way, put aside credit cards, especially if you have too many (more than three major cards is probably too many), and keep paying down the balance bit by bit, month by month. It will matter. Remember, credit scoring is a somewhat peculiar science. There are things you must know; don’t assume anything.

Your credit score is the single most important element in determining your ability to borrow. To lenders it is more important than the stability of your employment, the honesty in your heart, and the way you treat your mother. The credit check and your resulting score is the first step toward prequalification. Never skip a bill in your life if you can help it. You don’t want to shoot yourself in the foot; especially when it comes to home mortgages.