Friday, September 22, 2017

How Credit Card Usage Affects Your Credit Score

Knowing what affects your credit score will help you through your Lake of the Ozarks mortgage loan process. The way that you use your credit cards can have a significant impact on your credit score. Keep reading to learn about actions that can negatively affect your credit score. Some of these items may come as a surprise to you.

1. Not Having Credit Cards at All. 


Many people think that avoiding credit cards altogether keeps them from ruining their credit. However, not using credit cards at all can actually hurt your credit. Part of your credit score is based on the types of credit you have, and having no credit cards at all will make you lose points. If you've never had any type of credit account, you won't have a credit score at all. Having a credit score is vital to obtaining a home loan at the Lake of the Ozarks because it shows the lender how you've paid debts in the past, and the likelihood of you paying future debts on time and in full.

2. Requesting a Credit Limit Increase. 


When requesting a credit limit increase, some credit card issuers will do a "hard" pull or inquiry on your credit. Doing this is similar to what happens when you submit a new credit card application. These inquiries are 10% of your credit score, and every new inquiry could drop your credit score by a few points.

3. Closing a Credit Card. 


While you may think having less credit cards is a good thing, closing credit accounts can actually hurt your credit score. Closing an account will increase your credit utilization, as you are reducing the amount of credit you have available to you. Rather than closing the account, keep it open and just keep the balance low.

4. Applying for Multiple Credit Cards at Once. 


Every time you apply for a credit card, a credit inquiry is made. Putting in multiple credit accounts adds multiple credit inquiries to your credit report. This can cause your credit score to drop by dozens of points. Opening a new credit card can also hurt your score.

5. Maxing Out Your Credit Cards. 


Your credit utilization is one of the factors that goes into determining your credit score. When you max out a credit card, you're increasing your credit utilization. It's important to try to keep your credit card balances at around 30% of the credit limit. This minimizes your credit utilization and increases your credit score.

If you have questions about your credit score and how it could affect your mortgage process, give your Lake of the Ozarks mortgage lender a call at 573-746-7211. As your lender, I'm here to assist you every step of the way. I'll discuss your financing options, offer competitive interest rates and back it up with the first-class service you deserve. Let me help you get into your dream home at the Lake of the Ozarks!

For Lake area news, resources and tips on financial services, please 


Michael Lasson
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

Direct:  (573) 746-7211

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.








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