Take Care of Your Credit

If you are thinking about purchasing a home in the future and you don’t have the cash on hand to buy it outright, one of the main things a lender will be looking at is your credit rating. There’s no time like the present to get your credit score in good standing. Here are some basic tips on ways to do just that.

Once a year you are entitled by law to get a free credit report from TransUnion, Experian and Equifax. Look for late payments, unpaid bills and any other errors. If there are any inaccuracies, there should be directions on where to send a dispute so that they can be taken off your report.

Pay down your credit card balances. Ideally the percentage of what you owe should be no more than 30% of your available credit. Pay down the higher balances first. This ratio of how much credit is being used to available credit makes up about 30% of your credit score so getting those balances down or paid off will help to improve your score.

Make sure all bills are paid on time! Pay at least the minimum due on all your accounts. Payment history makes up about 35% of your credit score.

Leave old credit card accounts open and active. The age of your oldest account and the average age of all your accounts is taken into consideration to determine your credit score.

If you don't have any credit at all and you can't get approved for a credit card, ask a (very special and trusting) person who is responsible with their credit to add you on their card as an authorized user. They don't even have to give you the actual card to use or give you access to the account. You will explain to them that you will not be using their credit card but as an authorized user, you can start establishing a credit history of your own. It’s important that the  person who allows you to do this has a good credit history and is responsible or there's no point in linking your name to them.

Have patience. You can’t build or repair a credit score in a day. Be diligent and apply some of these tips and soon you will see an improvement. If all else fails, there are many credit repair companies available to you to assist you along the way. Good credit goes a long way when it comes to buying a home!