Debt Reduction Without Losing Credit

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An Eighteen year veteran of home loan lending in Colorado, Ashley created the Fairway Fast Speed Team that gets loans closed in record time!

Pay Off the Cards – But Don’t Lose the Account

Many people start preparing long ahead of time for buying a home. Historically, you want to build a great credit score in order to both qualify for a home loan and potentially a better rate on the loan.

There are many ways in which to build credit. Buying a car is usually at the forefront. Consumer cards such as VISA or American Express are another ongoing type of credit whereby it enables you to show a long history of buy and pay. Retail stores make it appealing too by offering discounts on your purchase by getting their credit card.

The latter is where you need to be mindful It’s great to have the credit to buy your clothing or tools in example and show the payment history. But sometimes in preparation for a lower loan to debt ratio on a purchase, many will stop using the card (which is smart) leading up to and during the home loan process. Often times it can be many months before you even think to use this kind of card again.

It’s a good idea to set a reminder for yourself to check the retail credit card accounts after you close your home loan. See what the status is. Sometimes the retailer may cancel the card due to inactivity or other reasons over a certain amount of time. Getting to the counter to pay for your wardrobe updates only to find out that the card is no longer valid can save grief.

Keeping a good running accounting of all your charge related cards is a good practice.