It’s no secret that a bad credit score can cost you money – in the form of a rejected loan request, that is. A low score can lead to higher interest rates on loans while also making it more difficult to qualify for a mortgage. And if your score is poor enough, you could be denied credit altogether. Fortunately, there are certain steps you can take to improve your credit score:
Understand Your Credit Report
The first step is to get a copy of your credit report from all three major credit bureaus: Equifax, Experian, and TransUnion. You’re entitled to one free report from each bureau every year – so use them well! Review your reports carefully for any errors or discrepancies, and if you find any, file a dispute with the credit bureau.
Make All of Your Payments on Time
This includes credit card bills, car payments, student loan payments, and any other type of debt you might have. Even if you only make the minimum payment, as long as it’s paid on time, it’ll help improve your credit score.
Pay Down Your Debts
While making all of your payments on time is important, it’s also crucial that you work towards paying down your outstanding debts. The amount of debt you owe makes up 30% of your credit score, so it’s important to keep this number as low as possible. You can do this by making more than the minimum payment each month or by consolidating your debts into a single loan with a lower interest rate.
Don’t Open New Credit Accounts
Every time you open a new credit account, your credit score takes a small hit. This is because opening a new account represents a potential risk to lenders. As such, you should only open new accounts when necessary and avoid opening too many accounts in a short period.
Need Help Buying a Home in California?
If you’re looking to buy a home in California, Camden Mckay Realty can help. Our team of experienced real estate professionals will work with you to find a loan program and a home that fits your needs and budget. Call us at 909-841-0243 today so we can help.