Your credit score is something that is important whenever you are attempting to finance anything – a car, a credit card – and yes, a house.
But if you haven’t built your credit, or don’t know how to rebuild your credit if there were a past issue, you may not understand the steps to take to create a good credit score.
The Consumer Financial Protection Bureau has put together a list of tips on how to build and maintain a good credit score. It is posted on their website, consumerfinance.gov. From their list:
- Pay your loans on time. This is every single payment. The CFPB recommends setting up auto-pay where you can. If that isn’t an option, then due dates should be on your calendar – and make sure you have reminders set up so you don’t miss a payment!
- Don’t “max out” your credit line. Keep your credit debt lower than your maximum! The article on CFPB states that “experts advise keeping your use of credit at no more than 30 percent of your total credit limit.”
- Higher credit scores need history. Essentially, the longer you pay your longer on time, the more data your credit score has to report – and can send it higher.
- Don’t apply for credit you don’t need. Too much recent activity of credit inquiries can signal (even if incorrectly) that your financial situation has changed (and not for the better.)
- Check your credit reports! I can’t begin to number how many times I have heard about people finding errors on their reports when applying for a new loan. Check your credit report regularly. If you find an error, dispute it right away!
This is a great list from the CFPB!
If you would like more information about buying a house in Towson, please let me know. I work with a network of professionals who may be able to help with your mortgage and credit!