Should you be proactive or reactive in getting credit?

proactive or reactive in getting credit

Should you be proactive or reactive in getting credit?

Likely if you currently have a mortgage, line of credit, or auto loan with your local bank.  Chances are they send you constant pre approval’s in the mail for line’s of credit or credit card options.  Many people don’t like accepting these offers when the bank sends them as they fear there “credit limits” will be over stretched.

This is far from the issue at hand.  As long as you don’t USE that line of credit or credit card and a 0 balance is left on it.  It does NOT affect your credit qualifying for future credit reasons.  Let me give you an example:

A customer is looking to get a mortgage.  However, he currently have 75,000 in unsecured lines of credit through multiple banks, but balance on the lines are 0$.  Does this affect them from qualifying?  NO!  The bank is only concerned on BALANCES you carry as a liability.

Now imagine this:  Time goes by,  you lose your job, some financial crisis occurs.  And you actually NEED credit to temporarily get you back into a better situation.  Imagine how a bank will look at approving you now that you NEED the credit compared to already having the safety net to begin with?  You will likely be provided a way high interest rate, or worse… declined. 

Be in control!  Take advantage of credit offerings when things are good.  What’s the worst that can happen?  Simply cancel that credit line if you ever feel it gets in the way.  So again, should you be proactive or reactive in getting credit?…

A mortgage broker is a great financial advisor to have on your side,  They know the in’s and out’s of credit facilities and the best strategies to implement when and why.  Reach out to us today so we can help you on the path to success financially!

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