Is your credit score high enough? Whether your goal is to get a mortgage, buy a car, or go to school, odds are that at some point you will need to borrow money. Having a good credit score will make all the difference in achieving your goals, and it can drastically affect your access to good loan programs and competitive interest rates. Over the life of a loan, your credit score could mean a savings (or a loss) of tens of thousands of dollars!
Credit Cards
One of the best ways to improve your credit score is to pay down the balances on your credit cards. What is your credit utilization percentage? You can find out by dividing your credit limit by your current card balance. For example, if your limit is $3000 and your balance is $1500, that means you are using 50% of your credit. The lower your credit utilization, the better (try to keep it under 30% to see a change on your credit report). This will show your creditors that you’re not overextending yourself, and your FICO score will reflect that.
Credit Limits
You can also call your creditors and ask for a credit limit increase. This will help you improve the ratio between your limit and your balance. Showing that you have a low balance on a good limit helps you improve your FICO score. Just make sure that when you call your creditors, you’ve demonstrated a history of making all your payments on time. You should also ask them not to run your credit, since a hard credit inquiry can cause your score to drop by up to 5 points.
Authorized Users
If you have limited credit, you can add yourself as an authorized user to someone else’s account. This can a be a friend, family member, or anyone- just make sure you choose someone who makes their payments on time and has a low credit utilization! This can directly improve your credit score, since it will add to your credit file and allow you to piggyback on the other account holder’s credit history. Just remember that the door swings both ways: if the account holder starts making late payments while you’re on the account as an authorized user, that will reflect negatively on your FICO score.
Summary
If bad credit is keeping you from realizing your homeownership dreams, we can help you get back on track. Call us at (888) 311-8339 or contact us below!
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