A bad credit score makes it hard to get a reasonable loan term, which can be a major obstacle when it comes to buying a house. Here are five things you can do to improve yours.
- Check your credit report
False information is sometimes reported, so it’s crucial that you regularly check your credit report for mistakes. These kinds of errors can have a considerable impact on your score.
- Optimize your credit
If you have more than one credit card, try to spread your expenses around instead of loading up one card. Three cards carrying a 30 per cent debt have less of an impact on your credit score than one card at 90 per cent.
- Make payments on time
When sloughing off your debts, prioritize payments by due date if possible. Late payments count for a lot when calculating your credit score.
- Use dormant credit
You may have a preferred card, but it’s a good idea to regularly use all the sources of credit at your disposal. This contributes to improving your score because it speaks to your ability to properly manage multiple debts.
- Strategize debt repayment
When tackling debt, having a strategy is paramount. One example, often re¬ferred to as the snowball method, consists of making the same payment every month. This will speed up the process of eliminating your debts by increasing the proportion of the principal you pay off each month.
If you follow these tips, you’ll undoubtedly improve your credit score and become a more appealing candidate for mortgage lenders. Your dream of becoming a homeowner is almost within reach.