If you currently have a mortgage or looking to obtain one, it is imperative you maintain a healthy credit score.
The three digits that make up your credit score tell a lender a lot about your credit history and ultimately the status of your financial health. Essentially, lenders use the score to assess the risk you present as a potential borrower – which significantly impacts if and how much lenders are willing to let you borrow. There are two different reporting agencies (Equifax and TransUnion). Credit scores can range from 300 to 900 (we call the 900 a Unicorn because they are so rare!). Higher scores on this scale indicate a healthy credit score and lower on the scale indicate more risk for the lender.
Here are 5 ways to work on improving your credit score:
- Know Your Credit History: check in on your credit bureau to see if there are any issues. Sometimes there are mistakes on your credit bureau and getting them updated can help improve your score
- Pay Your Bills on Time: Don’t underestimate the power of paying your bills on time. Even a day or two late can cause an issue
- Keep Your Balances Low: Once you use over 30% of your limit on your card or line of credit your score starts to dip
- Maintain a Credit History: How long you have had the credit for is just as important as paying the bills on time and not over-using credit.
- Get Help: If you get into issues with paying your bills and think you are out of options, reach out. Sometimes there are solutions that you might not be aware of!