When we are young many of us do not give too much consideration to what is contained in our credit report, however, when it comes to making important decisions like buying a home for the first time, we may start taking notice of it, why is that? Well, your credit history may affect your chance of being approved for that important loan. This is because a lender will want to know how well you manage money. They will want to know how much debt you have and whether you have a good history of paying your bills on time. Looking at your credit report will help them with that information. So, what can you do to maintain a good credit report? Here are some suggestions:
Pay your bills before the due date. Late credit card payments can result in hefty fees and they will show up on your credit report. If you have difficulty remembering payment due dates, it might be best to set up an automatic payment plan, even if it only covers the minimum due. This way you will avoid the consequences of a late payment.
Perhaps you have acquired numerous credit cards over time. Are there some you do not use? It is best to cancel them by calling the company. Too many cards with too much credit will give a lender the impression that you could put yourself into danger economically. It is wise, however, to hold on to cards you had the longest which will show a lender a longer credit history.
Why not obtain a free copy of your credit report? You are entitled to one every year. This is a good idea because you can see for yourself how you are managing financially and, if need be, work at ways of further improving it before you apply for a loan. You can also have any errors, which occasionally happen, fixed before anyone else sees it.
Following these small suggestions will do lot to improve your chances of loan approval.
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