How important is your credit score?

How important is your credit score? Your credit score is important and it should matter to you. Your credit score is the numerical data that represents your track record of paying off your debts. If you have not started building credit, start building your credit now. I often hear people talk about their credit and asking about how to improve it. Below are a few tips.

• When you apply for a loan/mortgage, lenders want to ensure that you are a low-risk applicant. Lenders want to be secure in that you will repay your loan and repay it on time.

• Individuals with no credit cards often have lower credit scores than individuals who manage their credit cards responsibly. If you do not have at least one credit card, you may want to apply for a low-limit credit card to build your credit. Instead of using cash to pay for gas and groceries use your credit card. Be sure to use the cash that you would normally use to buy gas and groceries to pay off the balance before the next statement to avoid interest. This will show responsible usage of an active revolving account. Using your credit card for everyday items and paying it off may give your credit score a boost.

Here are a few simple steps to improve your credit score:

1. Keep your credit card balances low (below 30%).

2. Pay your bills and pay them on time.

3. Do not open any unnecessary new lines of credit.

4. Do not close credit cards and/or lines of credit (closing them may hurt your score and it will remain on your report).

5. Pay off and/or Lower your debt.

6. Dispute inaccurate information and clear your credit history.

Remember, your credit score is extremely important.  A good credit score can open many doors for you and a bad score can close many doors. If you are currently in the market for a home and are considering your options, contact me for more information.