One of the biggest hurdles in buying a home is making sure that you have good/ enough credit. There is no denying that credit cards play a large role in your credit rise or downfall.

In this time of information overload we are fed a lot of “advice” from many avenues and you have to filter out unfounded information. Here are some commonly preached rules about credit cards that just aren’t true:

Myth: DEBT CONSOLIDATION ONTO ONE LOWER INTEREST CARD WILL HELP YOUR SCORE
The fact is that your largest concern is the % of the card you have paid off. If you consolidate your debt onto one card but max out the limit your credit score will lower by at least 80 points immediately. Even though you might feel more organized, it is wiser to continue to pay off your current cards rather than getting closer to a limit on a single card. The best practice is to keep your card to less than 30% of your available limit.

Myth: CLOSING CREDIT CARDS WILL HELP YOUR SCORE
Never close credit cards unless it is an extenuating circumstance like a divorce or removal from an authorized user account that has gone bad. The fact is the more available money you have but are not using the better it is for your score.

Myth: MAKING PAYMENTS ON OLD DEBT WILL HELP INCREASE YOUR SCORE
If a debt is over a year old and you verbally agree to /or make payments, your score will drop immediately. Your best bet is negotiating the debt. Often times the collector will accept 30 to 40 cents on the dollar. Once an agreement has been made, request a deletion letter. These situations are better left untouched until you are able to take care of it completely.

So what does this have to do with home buying? Every step you take in the direction of increasing your score is a step closer to owning you dream home. So stay diligent and proactive!