A bad credit report leaves home buyers with nonprime loans which cost more money because of:



high point charges

high loan processing fees

prepayment penalties

high interest rates

If you desire to buy your dream home or investment properties to build your future wealth, you must maintain good credit.

Avoid these 12 common credit mistakes to build strong credit and save money in mortgage loan costs.

1. Mortgage lenders often scrutinize the type of credit used. Consumer credit, the kind associated with department store credit cards and finance companies, has high interest charges and deducts points from your credit score.

2. "Too much consumer credit," a common remark in credit reports, is caused by too many lines of credit or too many credit cards.

3. High balances caused by only paying the minimum due or maxing out credit cards or lines of credit generate deep drops in scores.

4. Cash advances costs higher interest and extra fees. These extra charges accumulate and keep balances too high.

5. Charging over your limit and paying penalty fees causes negative "high proportional amounts owed" remarks on credit reports and deducts points from credit scores.

6. Late payments, sometimes even only by one day, cause unnecessary late fees. Late payments often increase account interest rates.

7. Some consumers charge more than they can afford. This causes a snowball effect of amassing debt with no easy way to pay it off.

8. Co-signing a loan raises debt-to-income ratio and possibly adds "too many consumer accounts" on your credit report, which lowers your score considerably.

9. Don't ignore credit problems. Talk to creditors before making late payments and make correction arrangements. This action heads off negative reporting to credit reporting agencies.

10. Report address changes to creditors to avoid misplaced bills and late payments.

11. Use your full legal name to protect yourself from confusion. Avoid partial names, different names, and initials. If appropriate, use Sr. or Jr. Report name changes to creditors to avoid confusion.

12. Check your credit report often for mistakes and protection from identity theft.

Avoid credit mistakes to build strong credit and keep your credit scores up. Understand the difference between good credit and the credit needed to obtain real estate financing. Finance your dream home or dream investment portfolio!

Copyright ? 2006 Jeanette J. Fisher