How many times have you been told how important it is to keep a healthy credit score? The biggest benefit of keeping a healthy credit score is that you will enjoy the benefits of lower interest rate, especially when you go to finance a home, buy a car, or invest in property for your business.
There are five things that influence your credit score:
- Payment History – 35% – bills you’ve paid on time
- Level of Debt – 30% – how much you owe and how it is used
- Credit Age – 15% – average amount of time credit line is open
- Mix of Credit – 10% – credit cards, loans, and other credit accounts
- Recent Credit – 10% – credit inquiries – several in a short period of time can damage your credit
There are also several DOs and DON’Ts that can affect these five credit score components. Here’s Linda to tell you about them.
- Pull a credit report – you pulling a credit report will not affect your credit so it’s good to do this once a month to make sure it is correct. The credit bureau does get things wrong from time-to-time.
- The rule of thumb for credit cards is to only use 30% of your available credit and pay it off every month.
- Collections can kill your score. If you have them, settle as soon as possible with the company you owe and then ask for a Letter of Deletion (not a Letter of Satisfaction) for the Credit Bureau. This permanently deletes that collection from your account and will increase your credit score.
- If you want to buy a home, choose a mortgage lender that uses a credit simulator. They can really help you manage your credit to your best advantage.
- Don’t open new accounts
- Don’t cancel credit accounts
- Don’t consolidate credit – this really damages your score
If you would like help finding a mortgage lender in the Raleigh area with a credit simulator to help you achieve a very healthy credit score, give us a call. It doesn’t cost a thing to take steps to increase your credit score whether you are looking for a home or a space for your business. We’re here to help! For residential real estate assistance, call 919-235-0007 or visit LindaCraft.com. For commercial real estate assistance, call 919-466-5000 or visit CraftCommercial.com.