Your credit score is an important number, especially when considering taking a loan to buy a new car or a new home. It sums up your financial history while indicating your monthly income, how much debt you owe as well as how well you manage your debts.
Credit score defines your character to the mortgage lender and determines your credit worthiness. Banks and lenders such as Wasatch Peaks Credit Union favor customers with high credit score, usually over 700 points and lavish them with high loan amounts as well as affordable interest rates. Lower scores beget smaller principle sums, coupled with high-interest rates.
Rather than settling for an expensive home loan, Ogden residents can take the following steps to improve the credit score and enjoy better rates after that.
Pay your outstanding bills
Carrying too much debt lowers your overall score and scares away many lenders since you might have difficulties paying them on time. It does not matter whether the debt is distributed over many cards or just one, since what counts is the total amount that you owe. For best results, pay your outstanding bills in full and on time each month. Late payments not only attract a fine but also put a significant dent in your credit score. Again, you should never pay the minimum amount due on your card. Minimum payment sticks you with higher bills and does not improve your score.
Do not incur new debts
Your credit score reduces by a few points whenever you apply for a new credit card since the supplying company has to conduct a credit check. A low credit card score attests to your inability to manage your current debt. Hence, should not incur more debts. Furthermore, the higher number of cards you have, the greater the likelihood of incurring bad credit debts, which cause further damage to your score.
Your credit score is the gateway to successful homeownership, and you should strive to keep it high at all times.