Credit Preparation
Currently have a mortgage or looking to obtain one soon?
It is imperative that you maintain a healthy credit score. Your credit score tells lenders a lot about your credit history and the status of your financial health and lenders will use it to assess their risk. Good credit scores generally mean better interest rates.
Know your credit history
Obtain your up-to-date credit report via the two credit reporting agencies Equifax or Transunion. You should make it a habit to do this annually and check the report for any errors or possible identity theft/fraud. Errors on your credit report can have a negative impact on your credit score which in turn impacts your ability to borrow.
Pay your bills on time
Your payment history is a single and very important element of your credit score. It is crucial that you pay your bills on time, every time. Ensure you pay at least the minimum amount owing on time. Not only will you develop the right habit but you will also ensure that your credit score either remains good or improves.
Keep your balances low
Having a high credit limit is excellent for your score, but using it all or even more than 50% of it can have a negative impact on your credit score. It's recommended consumers should keep a balance between 35-50% maximum of their credit limit. The closer you are to the limit, the lower your score will go.
A good credit score goes along way in term of your financial health and ability to borrow. Be responsible and aware. Review your credit report annually, spend within your means, pay your bills on time, and do not hesitate to get help if your borrowing habits are out of control. Contact us to learn about more strategies on improving your credit score and work your way towards a better mortgage qualification.