Credit score is one of the three most critical aspects that a lender reviews when approving a mortgage along with the stability of employment and the type of property to be mortgaged. Most Lenders’ products have minimum credit score requirements that must be met by the Borrower. Therefore it makes sense to increase your credit score to be able to qualify for better mortgage rates and terms on your mortgage.
How can you increase your credit score? In order to increase your credit score follow this steps:
- Pay your bills on time:
Missing or late payments will have a negative effect on your credit score.
- Amount owned:
Maintain balances below 30% of credit limits.
- Credit history:
Get a credit card if you don’t have one to establish credit history. The longer you have a credit line the higher the credit score. In the case that you need to close a credit account close the most recent one.
4 avoid credit inquiries: Multiple inquiries can lower a credit score.
5 Have a mix of credit products: The best credit combination is a store credit card and a major credit card and avoid having multiple credit cards, too many credit cards and loans lower an individual’s credit score.
- Use credit instead of cash:
Using credit responsibly is one of the fastest ways to increase a credit score, therefore if you avoid credit cards you won’t be able to show your credit patterns, however remember to pay your minimum monthly amount on time.
Note: In case of bankruptcy remember that it will show in your credit report for 6 years in Equifax and 7 years in Transunion. In case of credit counselling remember that it will show in your credit report for 3 years in Equifax and 2 years in Transunion.
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