If you are thinking of purchasing a new home or refinancing soon, your credit score will play a large role in not only whether or not you qualify but also how high your payments will be. Credit awareness is your first step.
To review your credit report, visit www.annualcreditreport.com. If you find any errors, work to fix them as soon as you can.
Your credit score is determined by several factors: Do you pay on time? Do you owe money on your credit cards? Have you used credit recently? Are you applying for numerous new cards? What kinds of credit have you used?
Essentially, lenders are looking for a consistent pattern of on-time payments. If you don’t already pay all your bills on time, now is the time to start.
Your score is also affected by your debt to income ratio. So you can work to raise your income or you can work to decrease your debt. Whichever path you choose, paying down maxed out cards is a good place to start.
Overall stability helps boost your credit score as well. Changing residences or jobs frequently can put a ding in your score.
If you are planning to apply for a home loan in the near future, avoid other big purchases like cars or boats.
If you’d like more tips on improving your credit, please let me know. I can put you in touch with a consultant who can work with you to help improve your credit score.