Credit Cards, Credit Scores, and Home Equity Rates Are Connected

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Do my credit cards affect the home equity rates I am offered?

Credit Cards, Credit Scores, and Home Equity Rates Are Connected

How you utilize your credit cards will tell your potential home equity lender a lot about you. In fact, it will greatly impact the home equity rates offered to you. Many consumers don't realize the two simple steps they can take with their credit cards to help get them better home equity rates. These two steps are:

  • Step 1: Pay down your credit card balances: The
    closer your credit card balances are to the limit of your cards, the
    worse your credit score will be. Try to make some bulk payments to your
    credit cards about 60 days before you plan to apply for a loan.
  • Step 2: Beg forgiveness on late payments: If
    you're 60 days late on a bill, the lender will often report it to the
    credit reporting agencies. This can have a major impact on your credit
    score. If you're not often late, your lender might agree to remove the
    late reporting once you bring your account current--they might even agree to remove the late fees, which will lower your balance and save you money. Give them a call
    at least 60 days before you begin to compare home equity rates and find out if they're willing to do that for you.

   

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