Credit Do's and Don'ts via Central Pacific Bank

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Thanks to Zachary Gaynor, Senior Loan Officer with Central Pacific Bank, who recently shared these do's and don'ts for those applying for residential home loan.

Do stay current on all existing accounts
Even a single 30-day notice (late payment) may negatively impact your approval for a mortgage loan.

Do keep your credit card accounts open
If you close a credit card account, it may affect your credit history which are factors used to calculate your credit score.

Don’t open any new lines of credit
Your credit report is pulled each time you apply for financing; numerous credit checks may affect your score. This also applies if you are a co-signer for a loan. Avoid financing large purchases such as buying a car or items for your new home during the loan process.

Don’t pay off collections or charge-off accounts
If your intent is to pay off outstanding accounts, consider having it paid through escrow.

Don’t max out or over charge credit cards
Strive to maintain a balance per card of no more than 40% of your credit limit. If you plan to pay down balances, make sure you pay each credit card account across the board.

Don’t use a credit card to consolidate debt
Consolidating debt on one or two credit cards may indicate that you have maxed out on these cards thereby negatively impacting your credit worthiness.