Don't Miss Your Real Estate Opportunity: 4 Costly Mistakes That Can Destroy Your Credit Scores
In real estate, timing is EVERYTHING. Careful treatment of your credit score is crucial to lock in the best financing and/or avoid losing a real estate investing opportunity. I advise my clients to review their credit regularly and begin any cleanup work that may be necessary right away. These 4 items are an important piece in that process:
Miss A Payment – payment history is the single most important part of your credit score so becoming 30 days late just once, could drop your score by more than 100 points!
Max Out Your Credit Cards – beyond maxing out your credit cards, the amount of your available credit utilization rates significantly in your scores as seen where the people with the best scores use only 5.6% of their available credit and those with the worst use 77.2% of their available credit
Inefficient Rate Shopping – a single credit inquiry can drop your score 5 or 10 points and although relatively insignificant this can be avoided by doing your rate shopping (which is encouraged) within a 30 day where it will be forgiven. This could be difference in borderline interest rate pricing.
Forget To Pay A Medical Bill – this can be such a silly way to significantly drop your scores as a medical bill $100 or more can reduce it by 100 points and billing practices are not standardized. According to the CFPB, roughly 50% of all collection items reported to credit bureaus are related to medical bills.