When you’re buying a home for sale, you need a decent credit score – but what if you were doing things that could actually harm your credit score without even knowing it?
Check out these three harmful credit myths that could be hurting your chances to buy a home.
3 Harmful Credit Myths That Are Hurting Your Chances to Buy a House
Credit Myth #1: No credit is better than poor credit.
Some people say you shouldn’t take on debt – and in a way, they’re right. But that’s not the whole story. You should never take on debt that you can’t handle is far better advice.
The point is that everything revolves around credit, from the stores you shop at every day to buying a home.
You need some kind of credit. But if you avoid using it at all, you’ll never develop a strong credit history – and that’s what lenders look at when they’re deciding whether to let you borrow the money to buy a home.
Credit Myth #2: Closing credit cards can boost your credit score.
Closing your credit card won’t boost your credit score. It’ll actually affect you negatively. That’s because the age of your credit plays a role in the way lenders look at your overall creditworthiness. Additionally, your available credit immediately drops – and that makes it look like lenders are willing to let you borrow less.
Credit Myth #3: Delinquent accounts disappear after you pay them off.
It’s definitely true that paying off past-due accounts will stop bill collectors from coming after you, but those accounts stay on your credit report for quite some time. Typically, it’s about 7 years before a late payment falls off your report – and it’s 10 for a repossession or bankruptcy.
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