Tuesday, May 25, 2021 / by Explore Homes In Florida
How to best keep your Credit Score High
Using credit wisely and responsibly can bring you many benefits such as being eligible for a lower interest rate on your credit cards and loans. Likewise, it encourages sellers or landlords to trust your principles and thus, consider your offer.
When it comes to Real Estate, having a Good Credit Score is simply the main requirement, today we are here to teach you how.
1. Pay your debt!
Easier said than done, we know, but trust us when we say that putting a little extra effort into keeping that debt on the line will benefit you in the near and distant future.
2. What goes into your credit score?
There are five key pieces of information that are used to calculate your credit score: your payment history, level of debt, credit age, mix of credit, and recent credit.
3. Keep Your Credit Card Balances Low.
Even though you may have several credit cards with high credit limits, this doesn’t mean is convenient to top them out, the higher your balance in relation to your limit, the worse your score will be. All your credit debt should not be over 30% of your combined credit limits. It is okay to use them for higher amounts as long as you’re planning on paying them even before the statements closes in order to bring it back down to said 30% or less.
4. Keep all your credit cards.
Some may think that if they’re not using a credit card, they might as well close it but, the truth is if you close a credit card its credit history will eventually be deleted from the main credit bureaus, meaning your credit score will drop without a warning.
5. Manage Your Debt.
If you are planning on taking on a mortgage or a loan, you may want to balance out your credit card debt first-off, given that the greater the debt, the lower the score, and by reducing the amounts owed in credit cards you leave some ground open to ensure a suitable mortgage or loan.
6. Don’t go crazy on New Credit Applications
Having too many open applications for new credit can significantly and negatively impact your credit score; having said this, make sure you’re only submitting credit applications when it actually is necessary. By doing this you will also lower the risk of a decreasing score, since every time you get new credit accounts, it lowers your credit age.
7. Chip-in to all your debts.
Going the extra mile will eventually get you somewhere, isn’t that right? If you have more than one current debt, always make sure to gradually reduce them by making at least minimum payments, while paying a larger amount on your highest interest debt. Likewise, if you get a hold of some extra money, pay off some more!
In summary, maintaining a good credit score is easily done by being responsible and wise in the use of your credit; these are also values any mortgage or loan officer will look for in their borrowers. Remember, it will all be worth it!