Establishing good credit will not only help you save money, but it will make your financial life so much easier. Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. Having good credit will help you receive low interest rates on credit cards and loans, give you a better chance for credit card and loan approval, present you with more negotiating power, give you easier approval for rental houses and apartments, and so much more. Here are some ways you can improve your credit:
- Check for errors in your credit report - If you find any mistakes or errors, correct them immediately. To assist you, you can download one free credit report each year at annualcreditreport.com.
- Pay down your credit card bills - Pay off the entire balance every month if you can. Transferring credit card debt from one card to another could lower your score.
- Wait twelve months after credit difficulties to apply for a mortgage - After a year, you are penalized less severely for problems.
- Don’t charge your credit cards to the max - Pay down as much as you can every month!
- Do not order items for your new home on credit - Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.
- Shop for mortgage rates all at once - Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.
- Don’t open new credit card accounts - If you’re applying for a mortgage, having too much available credit can lower your score.
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