It’s never too early to start building better credit, let alone repairing damaged credit. It takes time to up your score, but with a few simple steps you’ll be on your way to improving your credit score and being a lender’s dream client.
Control your credit card usage.
You want to start by keeping those credit card balances low. Lenders look for revolving credit: how big of a limit you have versus how much of it you are actually using. Ideally you want to only be using 30% of your limit or less. You want to pay down those balances as much as you can.
Again with credit card debt, having even small balances on several different cards can hinder your score. If you can pay off those balances, do it. Your goal should be to just use one or two cards for all your purchases and keep them paid off.
Paid off debts are a good thing, but don’t close the accounts.
Remember that having old paid off debt is actually good for your score. It proves that you can make monthly payments and that you have been loaned money in the past. Even if you have paid off a credit card, don’t close that account. It can actually negatively affect your score.
Pay on time.
Always pay your bills on time. It’s great to save up money for a down payment for your purchase, but don’t forgo simple monthly payments. Even missing a payment or two on an overdue library book can adversely affect you.
Know your credit score.
Always be aware of what your credit score is. There are several free tools that offer free credit checks as often as you want with no penalties towards your score. You should do this as soon as you start thinking of a purchase and keep an eye on it.
You CAN improve your credit score.
Even if your credit isn’t up to par now, you can always improve it. It might seem daunting at first, but with a little bit of diligence with your money, you can vastly improve your credit and make lenders more than happy to approve your net loan.
Still have questions? Give us a call! We are here to help you with all of your mortgage needs!
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