Credit Pitfalls You Need To Know

How Can I Protect My Credit?

There are a few common credit mistakes that I see people make over and over again. It is possible to never miss a payment on any of your loans and still have a poor credit score. So what is this common mistake……credit shopping. Most people do not realize that the more often your credit bureau is viewed by lenders the more damage you are doing to your credit score.

How Much is Too Much?

There is much debate about how often your credit can be viewed and how much time between viewings must pass in order to maintain a solid credit rating. The credit rating agencies such as Equifax and Transunion to not make this info available to the public, so it pays to use common sense. Obviously the rating agencies realize that most people will probably have their credit viewed a couple of times during the year. You can’t get a cell phone or a Future Shop credit card without your credit being viewed so I wouldn’t worry too much about occasional credit checks. Where most people get in to trouble is when they are shopping for things like a mortgage. They will go from bank to bank trying to find the best rate and the best product, but they don’t realize (or don’t care) that their credit bureau is being pulled every time they submit a new application. If you have 3 or 4 credit viewings over a 3 week period you can be sure this will have a negative impact on your rating.

Be sure to do your due diligence and research before you fill out the application. Better yet use a mortgage broker that only needs to pull your credit report once and can submit that report to as many lenders as needed.

I Have Bad Credit…. Can I Still Get a Mortgage?

Probably. There are several lenders out there that can provide you with the mortgage you need. Keep in mind you are going to be paying a higher interest rate and will probably be required to put down atleast 15% of your own money for a downpayment. It is also helpful if you can get a solid co-signor to help strengthen the application. Often times a parent or sibling can cosign on the mortgage and if their credit is solid it can give the lender a greater comfort level with lending you money.

If you have any questions or would like to discuss your credit situation, please feel free to contact me. I have helped countless individuals with damaged credit just like you.

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