One thing that can negatively affect your decision to purchase real estate is a poor credit score. The credit score is a three-digit number that is of great importance in the American economy. It explains in a simple way how you manage your economy and deal with debt. It basically talks about your financial commitments. For example, it is very common for people who pay cash, even with excellent income, to have low credit scores, because it is not only how much income a person generates that is important, but how that person manages their credits.
Most people in our society don’t think much of their credit score until they need to make a big purchase or take out a loan. For most of us, a property is one of the largest investments we can make and a bank loan is almost always necessary to achieve it.
When you apply for financing, a low credit score could lead to:
-Interest rates higher than usual.
-Delay in credit approval.
-More evidence may be required to confirm your income.
-The rejection of the loan by the eventual lender
5 points you should keep in mind to improve your credit:
-Keep a balance: Knowing your score is the first step and the most important recommendation is that you pay the balances you have on all your credit cards. This helps increase your score. It’s fine to use one of your credit cards, but always make sure you keep your monthly balances as low as possible. We recommend that you use no more than 30% of available credit to maintain very good credit.
-Pay on time: If you really want to increase your credit score, this is another effective way to achieve it. While it may be easier said than done, it’s important to make sure all payments to every credit card and loan you have are made on time. Do not take more than 15 days or it will begin to reflect negatively on your credit score.
-Open new accounts: Opening new credit card accounts can quickly improve your credit score.
-Do not make large purchases: These charges make your credit look weak. Do not make large purchases before applying for a mortgage loan; this includes, but is not limited to, going on long and/or expensive vacations, buying a car and any other valuables.
-Plan: Improving your credit score is not something you can do overnight. Credit repair can take months. So be patient and plan ahead.
