With the continuous growth of real estate market in Burlington and other parts of Toronto, new homebuyers need to keep an eye on their finances and credit history so they don’t miss out on the perfect home.
Here are few guidelines that will help ease the process of maintaining a “good” credit score for your home loan.
Always pay on time: No one wants to lend money to an individual who has a repeated record of missing their payment. Whatever be the reason, genuine or unintentional, missing your payments indicates poor financial management which can lead to lower FICO Score. Experts at Inman say Payments carry “almost a 40 percent weight on your score.)” That’s a big number, also why get stuck paying charges and interest?
50% credit owed ratio: 50% is a recommended ceiling number, however, the lower the better.
Two credit cards can be better than one! This is both good and bad advice at the same time. FICO does not fuse numbers from both credit cards, this can help you as a user, maintain your usage percentage in control.
This goes hand in hand with the 50% credit ceiling number. If your credit card limit was $5,000 and you spend $3750 that’s 75% of your limit. Now, if you had two credit cards and spent the same percentage using two different cards, that would be $1,875 per card which equals to 37.5% which is under our 50% ceiling.
Close unused savings account
Most people activate their savings account and abandon them shortly after without closing them. If you have less than the minimum balance, it can start to affect your credit score. You are better off without them!
Check your credit report regularly
It can be as often as once every year. For a short fee online you can access them and analyze them to seek better clarification if needed.
Try to pay off high-interest loans and small loans; the fewer loans credited the better.
Happy Home Shopping!