Your credit score is not only important for future real estate transactions but also for other important life purchases. It will come as no surprise that mortgage lenders look very closely at your credit score to determine whether you qualify for a specific purchase, but did you know that your credit score also directly impacts the interest rate you get?
A good credit score equals an attractive interest rate, a bad credit score less so.
Tips for a healthy credit score!
Keep Your Credit Card Balances Low
Again, this seems so obvious but credit cards are where many people dig themselves into a hole. Credit cards can also do wonders for your score if you manage them properly. Here’s a fun fact: Ideally you should keep the balance on your credit card below 35% of your available credit. Example, if your credit limit is $10,000 try to keep the balance under $3,500 at all times.
Make Your Payments On Time & Set Up Auto Payments
We all have busy lives, crazy schedules and sometimes we’re just flying by the seat of our pants. Do yourself a huge favour and set up automatic bill payments. When Renée and I bought a new home this year we changed as many manual bill payments as possible to automated. Not only does it free up your time but you have peace of mind that you’re not forgetting anything – ensuring that you keep your credit score up!
Speaking of automatic, you should also be careful of numerous monthly or annual subscriptions. These payments automatically get charged to your card and as time goes on you forget about them. All of a sudden they start to add up and you may not even being using that product or subscription.