GIVE YOURSELF SOME CREDIT

One item sometimes overlooked by mortgage-seeking buyers is improving their credit scores.  Recent changes in the financial sector have tightened up lenders loaning abilities, and with rising interest rates, a consumer’s credit score can make or break an affordable house budget.  There are simple strategies that you can put into action that will assist in keeping your score in the “Excellent” category (see A Homeowner’s Guide To Credit Scores).  Here are a few ideas to keep in mind as you roll along into 2025:

- Keep credit card balances at zero, or very low.  A little tricky after the holidays, but doable with some purchase restraint!

- Pay all bills on time, so as not to allow any late payments drive your score down.

- Keep credit inquiries to a minimum, as these can negatively affect your credit score.

- Have a limited number of credit cards (3 or less is optimal), as too many may negatively affect your score, especially if balances remain.

- Leave old accounts on your record, even if paid off, as a portion of your credit score is calculated on how long you have had reportable credit.

- Avoid credit consolidation loans.  These will appear on your credit report, and although they sound like a good idea in principle, in practice these show that you don’t have the responsibility to refrain from overspending and taxing your financial resources.

Following these simple guidelines will keep your score on the high side, which is all important in today’s world.  Your credit score can affect your not only your ability to borrow for a mortgage or secure a car loan, it will also be considered for the majority of landlord looking for strong tenants, and more insurance companies are moving towards credit-based rates for consumers.  The higher your credit score, potentially the lower your insurance rates or ability to gain certain coverages.

Carry on!

Carmen

TouchstoneMontana.com