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Mortgage Insight
Your credit score is more than just a number; it’s a critical factor that can affect your ability to secure loans, get favorable interest rates, and even rent an apartment. If you're looking to improve your FICO score, especially if you're planning to buy a home, here are four essential tips to help you get started.
One of the most significant factors influencing your credit score is your payment history. Late payments can have a substantial negative impact, so it's crucial to pay all your bills on or before their due dates. Setting up automatic payments or reminders can help ensure you never miss a due date. Remember, consistency is key to building and maintaining a good credit score.
Credit utilization refers to the percentage of your available credit that you’re using. A high credit utilization ratio can lower your FICO score, so aim to use less than 30% of your available credit. For example, if your total credit limit across all cards is $10,000, try to keep your total balance below $3,000. Paying down high balances and being mindful of your spending can help maintain a healthy credit utilization rate.
The length of your credit history accounts for a portion of your FICO score. Therefore, it's beneficial to keep old credit accounts open and in good standing. Closing old accounts can shorten your credit history and potentially lower your score. Instead, use these accounts occasionally and pay them off promptly to keep them active.
Every time you apply for new credit, it results in a hard inquiry on your credit report, which can slightly lower your score. While one or two inquiries may not have a significant impact, multiple inquiries in a short period can. Only apply for new credit when it's necessary, and be strategic about your applications.
Improving your FICO score takes time and dedication, but the benefits of a higher score can be substantial, especially when it comes to securing a mortgage or other loans.
If you need help with your credit, we have the tools and means to assist you. Contact us today, especially if you're planning to buy a home. We're here to guide you through the process and help you achieve your financial goals. Contact Us Now!
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Office: 17762 Cowan Suite 201
Irvine, CA 92614
Call 562-244-7963
Email: tmire@h1mb.com
Site: www.troypmire.com