CREDIT RESTORATION TIPS!

Maxing Out Credit Cards Can Affect Your Mortgage Process The Action: The consumer accumulates a balance in an excess of 50% of the total available credit on any credit card, credit line or even home equity line of credit. Why It’s an Issue: Maxed-out credit cards — especially accounts where the balance is equal to or over the total credit limit — are a red flag for lenders in the decision to approve your new mortgage. This situation also wreaks havoc on all three credit scores the mortgage lender looks at, especially if each account reports to each of the three major credit reporting agencies. A better way to manage a higher debt load is to spread the debt over multiple cards (if you have them), reducing the balance per card or consolidating the debts into one new account with a high credit limit. Consumers ought to not carry any more than 30% of the total allowable credit line at any given point in time if they want to maximize their credit score potential. Knowledge is Power and Credit is King!