Tracking and maintaining credit is a vital but extremely difficult task. Large purchases such as buying a home are exponentially more challenging with poor credit. March is Credit Education Month, making it an ideal time to revisit your credit and start taking the steps to improving it. Try these 7 tips to improve your credit so you can buy a fantastic home for you and your family:
Check Your Credit Report
First and foremost, get a copy of your most recent credit report. It is important for you to determine what your problems are so you can address them specifically. Some issues can take a long time to solve so you want to identify and start fixing them as soon as you can. Checking it can also give you time to correct any errors that may be on it.
Pay More Than the Minimum Each Month
If you can, try to pay more than the minimum monthly requirement. People looking at your report will not be impressed by continuous minimum payments. Paying above the minimum makes your report look good and helps you pay off your balances faster so you do not have to pay as much interest.
Prioritize Paying Your Bills
Paying your bills on time is the most important factor in having a good credit score. Do not allow yourself to be late on any payments because that will reflect poorly on your credit.
Open a New Account
Try opening a new credit account. Your report will look better because you will be able to prove that you can handle various types of accounts. Opening a new card can also improve your utilization.
Join Someone Else’s Account
If you have a responsible family member or partner, try to become an authorized user on his or her account. Being attached to a reliable account will improve your credit history and overall average. However, be sure to choose someone dependable, as it is risky to put the responsibility of improving your credit score in someone else’s hands.
Avoid Big Financial Burdens
It is risky to invest in a large financial burden such as a car loan right before buying a home. It can change your financial status and many banks become concerned when they see sudden, large payments immediately before approving a loan.
Plan Ahead
Improving your credit is not a process that can happen overnight. Plan ahead so that everything will be in place before you apply for a loan for your home. If you discover that something is wrong right before applying, it can affect your chances of getting a loan and being able to purchase a home.
Celebrate Credit Education Month by taking steps to effectively improve your credit. CBC National Bank can offer tools to help you do so, including credit counseling and personal budgeting assistance. And when you’re ready to purchase, our Loan Experts will be ready to help you every step of the way on your home buying journey. Contact us today for more information.
