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Posted December 27, 2021 in Real Estate Terms

INCREASING YOUR CREDIT SCORE: WHEN TO NOT PAY

Believe it or not, sometimes paying off certain accounts can immediately hurt your credit score. There are certain accounts that you should always pay off that will increase your credit score, but certain bills and loans should wait till after you’ve reached your financial goal. Learn more below about why you shouldn’t pay off certain bills and loans and what bills and loans to not pay off.

INCREASING YOUR CREDIT SCORE | DLA

The Date of the Last Activity is what may trip you up when trying to work toward increasing your credit score. Accounts that are affected by the Date of Last Activity are usually those who have not been paid in some time. This will make the date of the last activity more current, bring down your credit score when you’ve just thrown your money at it in the hopes that you would be increasing your credit score. If you are trying to build your credit score, you will want to work with an expert who will be able to tell you what accounts will be affected by the DLA and which ones you should pay off now to increase your score.

Increasing your credit score: When to not pay Henderson NV Property Nevada Desert Realty

INCREASING YOUR CREDIT SCORE | CREDIT SCORE ALGORITHMS

The mathematical calculation to determine your credit score is legally required to not discriminate between someone with more money and someone who is broke. This is one reason why certain accounts’ balances don’t matter, just the DLA on the account will affect your credit score.

INCREASING YOUR CREDIT SCORE | COLLECTIONS

A collections account is an example of something that will almost always be affected purely on the date of the last activity. While you are working with an expert to increase your credit score so you can purchase a home in Henderson or Las Vegas, they may tell you not to pay off collections, or to pay them off and have to wait a certain amount of time before trying to qualify for a loan. If your credit score is very low, you may have to pay your collections off and then wait till your credit score recovers. If your credit revisor advises you to not pay off your collections, wait till you’ve reached your goal to pay these off. Once you’ve reached your financial goal, for example purchasing a home, then you may want to pay off those collections as they will make your credit score worse before they make your credit score better. Paying off these collections after you’ve purchased a home in Henderson or Las Vegas may help you from going through the process of finding out what you should and shouldn’t have to pay off again.

INCREASING YOUR CREDIT SCORE | CHARGE OFFS & PROFIT AND LOSS

These are different debts from collections as they are affected by the loan amount AND the date of the last activity. Depending on the amount owed on the account, you may want to wait to pay certain accounts as the DLA will affect you more than the balance on the account. This is where increasing your credit score so you can purchase a home in Henderson or Las Vegas can get pretty tricky and you will need someone who knows what they’re talking about on your side.

To learn more about increasing your credit score and purchasing a home in Henderson or Las Vegas, contact Nevada Desert Realty at 702-509-1446. They will help you get in contact with a lender to see about purchasing a home in Henderson or Las Vegas and a credit score repair expert if you have a low credit score. They will also help you determine what kind of home you can afford based on how much you are prequalified for.