Credit scores are maintained by 3 credit bureaus (Experian, Equifax, and Transunion). Each uses a differing formulas to come up with a numerical credit score that reflects your credit history. The higher the number, the better the credit standing. Specific items may have a harmful influence on your score and can possibly stop you from being approved for a mortgage. The following are precautions for potential Melrose MA home buyers on credit mistakes that decrease your score.

Credit Mistakes That Decrease Your Score

Late Loan Payments

Missing payments reflect poor credit habits and as a result lower your score. How late you are (30, 60, or 90+ days) and the number of missed payments also have an effect. Delinquencies remain on your credit profile for an extended length of time.

Debts Submitted to Collections

If you fail to pay a loan and a lender has exhausted their own procedures to obtain money from you, they may assign your debt to a collection company. The collection company sends information to the credit agencies. The information will show in your credit report even after you pay off the amount owed.


If a creditor is unsuccessful in obtaining the complete amount that you owe to them, they may “charge-off” the the leftover amount. This can happen if you entirely fail to pay or if you negotiate a lower amount. Settlements reflect on your credit report for 7 years. Future lenders will see this history and contemplate whether you will repeat this behavior.

Matters of Public Record

Bankruptcy, liens, judgments, foreclosures, and other legal actions are part public record. Regardless of whether you pay off these items, the initial recording is reflected in your credit rating. Particular things stay for up to 10 years whereas others (such as liens) will never be removed. Therefore, it is important to not let credit issues get to this point.

Precautions For Potential Melrose MA Home Buyers

All of the credit mistakes that decrease your score noted above mark you as a high-risk client and will possibly lead to higher interest rates or completely stop you from getting approved for loans. Demonstrate responsible payment patterns and it will save you time, money, and heartache when it comes to buying real estate. These are the best precautions for potential Melrose MA home buyers. Remember that this details only a few common credit mistakes. Speak with a credit professional for advice on your specific credit standing.