Maintaining A Healthy Credit Score

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Understanding the importance of credit when it comes to lending is extremely crucial. Your credit rating plays a significant role in qualifying for a mortgage; but not only that, the higher the credit score, the better your rates and term will be. To take full advantage of the rates, most lenders would require a credit score of at least a 740. The majority of lenders will still entertain credit scores of 620 or above when qualifying for a loan. Occasionally, there are lenders that will accept a 580 minimum. Fixing credit is a pain, so why not maintain it? Below are a few tips on how to maintain a good FICO score:

  1. Manage your spending: keeping track of expenses and review your statements monthly.
  2. Stay organized and make on-time payments: your credit gets reported after 2 late payments.
  3. Avoid over usage on your credit limits: you should try to keep it under 30% DTC (Debt-to-Credit Ratio).how-credit-scores-are-calculated
  4. Pay in full each month: not only you can reduce finance charges, it looks good on your credit
  5. Sign up for automatic payments. There are 3 ways to set up autopay: minimum payment, a set amount that you choose, or payment in full.
  6. Keep your contact information updated: when you move, make sure to inform your creditors of your new contact information. That way, they can contact you should any issues arise.
  7. Avoid doing too many credit checks: a credit check once a year is good to know where you’re standing. Rule of thumb is: if at absolute must, wait 6 months before another credit check.

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Tawnee Dinh - Loan Officer

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