Like it or not, when time comes to purchase a property, we are dependent on financial institutions. After all, it is they who decide whether our mortgage will be granted. So even if we have researched the house of our dreams, and even though we went at this stage of our lives, we do not have the last word. In this case, how have the last word or the last decision. Easy: just to be a desirable borrower to lenders eyes. Well … it’s not as easier. In fact, the most important thing is to build a good credit rating, one of the ways to build credit.
A credit score is a measure that assesses the financial credibility of a client. In other words, this measure is used to determine a person’s ability to repay its debts. The credit is also scrutinized during the mortgage pre-approval. At this meeting, the lenders assess the financial health, stability and the level of indebtedness of the customer. The higher the rating, the higher the credit will be positive.
Ways to build credit score
How to build a good credit score? In fact, there is no miracle solution. It is everyone’s responsibility to ensure compliance with its commitments. So, where to start?
First, build a credit history. Your accounts will be more long-established, most lenders will be able to assess your debt repayment habits. Strangely, do not hesitate to get a credit card to build or improve your credit score. However, make sure you maintain your balance and your credit card limit at a low level. So, take your credit card at the time to do some shopping. Demonstrating a good running between the use and repayment of the balance on the card, you will prove your ability to use credit wisely. Remember that your total debt should not exceed 30% of your credit limit. Then multiply avoid credit applications, it is bad for your score.
You must: pay your bills on time! A simple delay could prove fatal in calculating your score. In addition, economize a little savings to demonstrate your ability to cope with the unexpected.
- Reapply for credit elsewhere, after having been refused;
- Ask your institution to reduce your credit limit;
- Make a late payment;
- Make an application for new credit cards when you already have several.
Finally, the basic rule is: the better your credit score is, the better the mortgage rates you will grant.