Buying a house? Here are some tips for improving your credit score.
When Bank of St. Francisville works with borrowers, the first step in the process is to take a look at your credit score. Anyone who has ever had a loan or credit card and has paid on it monthly has one. Scores are kept by three different credit reporting agencies, and when you buy a home, the median score is usually used.
“Don’t let the idea of a credit score intimidate you,” says Kellye Cornette, BSF Vice President of Mortgage Lending. “We’re here to help explain it and show you how to achieve the best score possible.”
- Credit scores can change on a daily basis. Be sure to check yours regularly through free online services like CreditKarma.com.
- Don’t be late on payments, especially mortgage payments and car notes. This has a big impact on your score.
- Set up autodraft payments to avoid being late on monthly bills.
- If you’re considering buying a home, avoid adding to your debt ratio by making large purchases beforehand, like a new car or boat. Make those after you are settled into your new mortgage payment.
- Keep one credit card rather than several.
- It’s better for your score to have borrowed money from a bank than a payday lender.
- Don’t max out your credit card and leave it maxed out. Demonstrate you can pay it down, or better yet, pay it off each month.
- Save as much money as you can for a down payment and closing costs.
- Don’t get discouraged if you’ve made credit mistakes in the past. It may take a year or two, but credit profiles can be significantly improved.