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How can you improve your credit score?

How is your credit score looking these days? You might not be in the habit of tracking your credit score, but every once in a while, it’s a good idea to see where you stand. This is especially true if you’re hoping to buy a home, or take on a big expense. If you think your credit could use some fine tuning, we have some tips to help you improve your score. Here are our recommendations!

Consider using auto payments

One of the most frustrating feelings is realizing you have missed the due date for a payment you could have made, but simply forgot about. When you know it was in your control to pay your bill, but it slipped your mind, it’s easy to feel irritated. This is common in today’s busy world, and it can impact any of our payments, from phone bills to credit cards. Unfortunately, it can also cause a dip in your credit score, especially if you have a hard time remembering your payment obligations month after month!

The good news is that in today’s modern times, there are solutions to this exact issue. If you struggle with this problem, you’re clearly not the only one. Auto payments are a super handy way to ensure you make all your payments on time. All you have to do is take the time to set up what you owe, and how much you owe, every month. Whether this includes rent, utilities, or phone bills, you are covered. Automatic payments will simply withdraw the proper amount you owe each month so you don’t have to worry about remembering! This is a small and easy fix that can help keep you and your credit score on track.

Focus on the minimum payments for all debts

Speaking of making payments, how should you divide your money and attention between your bills? We always recommend making payments on all your debts, even if it’s the bare minimum, instead of solely focusing on one payment at a time. You want to ensure you can meet your obligations to all your creditors, and late or missed payments will lower your credit score. It might not feel super satisfying to make several minimum payments instead of one lump sum payment, but it’s the best strategy as a borrower.

Watch your utilization

A high credit score isn’t just about making your payments on time. It’s also about how much credit you are using. If you’re on the brink of maxing out your credit cards each month, this won’t do much to help you improve your credit score. If you’re hoping to buy a home, for example, lenders would likely be concerned about how much credit you use. They need to know you can support mortgage payments, and excessive credit usage may imply you are already taking on as much as you can handle.

In an ideal world, you wouldn’t use more than around 30 per cent of your monthly credit. Of course, this isn’t always possible. However, perhaps you can make it a goal to work on using less credit if you tend to exceed 50 per cent, and gradually work your way down. Your utilization should reflect a strong payment history, but not an over-reliance on credit. If you are able to reduce your usage amount, this can definitely help your credit score.

Review your credit statements in detail

How often do you take the time to examine your credit statement each month? Do you read it through, or do you just pay the balance and move on? It’s a good idea to review your bills for a couple of reasons. For one, your credit card statement tells you a lot about your spending habits. You can see how much you spent on certain items, and whether you need to consider cutting down on any areas. Second, every once in a while you might catch an error in your statement. Mistakes happen, and it’s possible you will be overcharged at some point. Of course, no one wants to pay more than they have to, so this is important to catch if it happens!

Get a mortgage broker involved!

Finally, if you’re hoping to improve your credit score in order to buy a home, contact a mortgage broker. We know what lenders are looking for in mortgage applications, and how your credit factors in. We can help you find ways to raise your credit score, and to budget accordingly so you can maintain your credit. Buying a home is a complex process, so there’s no point in making it any harder for yourself! Let a broker be your guide.

As mortgage professionals, we are here to help you with any of your mortgage needs. Whether you want to work on your credit, refinance, purchase a home, or consolidate debt, we are ready for you. Everyone has unique needs and circumstances, and we’re prepared to help you create a plan to match yours!

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.