Whether you’re moving to another city in your area or a new state, one important piece of the puzzle when buying a new home is understanding the makeup of your credit score.
The team at Ameris Bank knows payment history is the most influential component of a credit score, followed closely by how much a homeowner owes. To a lesser degree, considerations like the length of time a potential homebuyer has utilized credit, the number of new accounts or inquiries they have, and the various types of credit accounts they hold may also impact a score. Overall reporting also looks at how these factors relate to each other in the context of your personal usage.
To help achieve or maintain a healthy score, always remember the following:
• Have a system to assure your bills are always paid on time.
• Avoid late payments or the excessive use of credit by maintaining a cash “cushion” to pay for unexpected expenses. Don’t “max out” credit cards. It’s better to have a high credit limit with a low balance.
• Never close old accounts as the age of these can actually help a credit score.
• If you shop for credit, do so in the shortest time period possible to minimize inquiries counted against you.
• Don’t be afraid to use credit. You need several accounts in order to have a credit score. Just be sure to keep corresponding payments within your means.
• If you have established credit, don’t open new accounts solely for the sake of earning a discount on a new purchase. In the long run, you may spend more than you save up front by paying higher interest rates due to a lower score. Having more accounts also increases the task of making payments and the possibility of missing one.