When it comes to cleaning up credit, there is no better time than now to recognize the importance of your credit score and check if you are on track with your habits. To get started with your credit clean-up, there are a few things you can do. We can also give you some good advice to get you started! Schedule a 30 minute telephone or on-line appointment at /contact-us/.
Here are a few simple steps to get you started:
 
  • Pull Your Credit Report: For most of us, our credit score is something we only think about when we need it.  However, if you are unsure of where you stand, this is a great time to find out!  The Fair Credit Reporting Act lets you get one free credit report every year through Equifax or TransUnion.  Pulling too many reports can actually harm your credit score, so it is ideal to pull just one for an idea of where you stand and then you can clean up as necessary.

 

  • If You Find Errors, Dispute Them:  When doing your annual credit score review, it is a good idea to go through line-by-line and confirm that there are no errors.  If you find any errors, report and dispute them immediately as they could be affecting your score.

 

  • Consolidate Your Loans:  One of the best tips for managing your credit and working towards future financial success is to consolidate your debt into your mortgage.  Consolidating debt means reducing multiple loans to a single monthly payment, which typically has a lower interest rate allowing you to maximize spend on the principal amount.
 
Once you have put the effort into cleaning up your credit, you will want to keep it that way! A few tips for maintaining your credit and maximizing your financial future include:
 
  • Pay Your Bills:  This seems pretty straight forward, but it is not that simple.  You not only have to pay the bills, but you have to do so in full AND on time whenever possible.  If you are unable to afford the full amount, a good tip is to at least pay the minimum required as shown on your monthly statement to prevent any flags on your account.
  • Pay Your Debts:  Whether you have credit card debt, a car loan, line of credit, or a mortgage, the goal should be to pay your debt off as quickly as possible.  To make the most impact, start by paying the lowest debt items first and then work towards the larger amounts.  By removing the low debt items, you also remove the interest payment on those loans which frees up money that can be put towards paying off larger items.
  • Stay Within Your Limit:  This is key when it comes to managing debt and maintaining a good credit score.  Using all or most of your available credit is not advised.  Your goal should be to use 70% or less of your available credit.  For instance, if you have a limit of $1000 on your credit card, you should never go over $700.
 
Quick Tip: If you find you need more credit, it is better to increase the limit versus utilizing more than 50% of what is available each month.
Whether you qualify for a mortgage through a bank, credit union, or other financial institution, you should be aiming for a credit score of 680 for at least one borrower. If you are ready to start your home-buying journey, or are looking to refinance your existing mortgage, we can help you! Book your appointment today: /contact-us/