Credit Scores 101 - ryanmandley
When you are preparing for your first home, you may be thinking about your credit score. First, does anyone really know what a credit score actually is? It really is like a report card for the credit you have used. Lenders and banks use it to measure if you are a dependable borrower. What determines your score are the following items.
1. How many lines of credit do you have open? Including credit cards, loans, and more.
2. Do you make payments on time?
3. How much credit you are using on your accounts
4. Any prior strikes I.E. Foreclosure, bankruptcy, etc.
Now that you know what determines your score here are some helpful ideas for maintaining a good score or bringing it up.
1.Make your payments on time. Late payments can lower your credit. Late payments on a loan could affect your score more than a late payment on a card. But again, just avoid late payments.
2. Try not to close your accounts. Even if you have a credit card paid off, sometimes it is better to keep it open (unless you have costly annual fees).
3. Keep your debt low.
4. Try paying a little more than the minimum payment.
5. Avoid opening too many credit accounts.
Best of Luck!