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    When shopping for a home in the 2023 United States real estate market, maintaining good credit remains crucial to secure the best interest rates and terms for your mortgage. Here are some updated tips on what to do and what not to do:

    Here are some tips on what not to do and what you should do.

    DO stay current on your existing accounts

    Payment history is the most influential factor in calculating your credit score, accounting for roughly 35% of your FICO® Score. Even a single 30-day late payment can have a significant negative impact on your credit score, potentially costing you higher interest rates and less favorable terms.

    DO use your credit as you normally would

    Consistency is key. Avoid making drastic changes to your credit usage patterns, as any sudden shifts may raise red flags with lenders and result in a lower credit score. Maintain your typical credit habits throughout the home buying process.

    DO call your mortgage lender

    Before making ANY changes to your credit or personal information, it’s essential to reach out to your Loan Officer for guidance. They can provide valuable insights and ensure your actions align with your mortgage goals.

    DON’T apply for new credit

    New credit makes up 10% of a FICO® Score. When you apply for new credit, inquiries remain on your credit report for two years. FICO Scores only consider inquiries from the last 12 months. This advice still holds true in 2023, so refrain from applying for new credit cards or loans, including co-signing for others.

    DON’T max out your credit cards

    Keeping your credit card balances well below their limits remains essential during the mortgage application process. Aim to maintain balances at or below 30% of your credit limits. If you decide to pay down balances, distribute your payments evenly across all cards to avoid any negative impacts.

    DON’T consolidate your debt

    Avoid consolidating all your debt onto one or two credit cards, as this can give the impression that you’ve maxed out those cards. Such a scenario may negatively affect your credit score, so it’s best to keep your debts distributed across multiple accounts.

    DON’T close credit card accounts

    Closing a credit card account can increase your debt ratio and have a detrimental effect on your credit history. In 2023, as in the past, it’s advisable to keep your credit card accounts open, especially if they have a positive history.

    DON’T pay off collections or “charge-offs”

    If you have old accounts in collections or charge-offs, avoid paying them off directly during the mortgage process. Instead, work with your lender to handle these payments through escrow. You can also request a “letter of deletion” from the creditor, which can help improve your credit history.

    By following these updated do’s and don’ts, you’ll be well-prepared to navigate the 2023 real estate market and increase your chances of closing the mortgage deal on favorable terms.

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