A recent article in the Durham Homes Magazine points out the importance of a good credit score when applying for a mortgage. A score between 550 and 750 is usually required to obtain a loan. The score is calculated by considering your past payments punctuality, amount of current debt, credit history, and types of credit used. An important note is that recent searches on your credit history account for 10% of your score, so do not let a lot of companies do credit searches on your history!
Here are some ways to increase your score:
- Always pay your bills ASAP (at least 4 days before they are due)
- Keep your credit card balances below 50%
- Use one credit card often (but pay it off on time)
- Avoid having too many open lines of credit
- Do not cancel old credit cards (Unless you have other cards)
- Do not ask to reduce your credit (It lowers your ratio and it will hurt our score)
Your credit history is really important and it takes a long time to fix, so look after it!
