Increase Your Chances for a Reasonable Interest Rate by Improving Your Credit

Your credit rating will have a major impact on the interest rate you have to pay when taking out a mortgage loan.  Therefore, it is a good idea to take steps to improve your credit before you apply for a loan.  This way, you will have a better credit history and will qualify for a better interest rate.

If a new home purchase is on your horizon, you should start taking these steps to improve your credit rating.

• Don’t apply for new credit cards – the more inquiries you have into your credit records, the lower your score can drop
• Pay bills on time – if you miss even one payment, your credit rating can drop significantly and it can take several months for your score to rebound
• Don’t exceed credit limits – your credit cards have credit limits that cannot be exceeded or you will appear irresponsible with your finances and your credit score will suffer
• Reduce your debt – the greater your debt, the higher credit risk you become
• Reduce your debt-to-credit ratio – your debt-to-credit ratio is a comparison of how much you owe on each credit card to its credit line, your score will drop if you are pushing your credit limits on any of your cards

If your credit is absolutely terrible, you might want to consider applying for a secured credit card so you can start rebuilding your credit history.  In this case, you should wait about one year before applying for a mortgage loan.  In addition, make certain the credit card reports to the credit reporting agencies so you will reap the benefits of using one of these cards.

Keithmaclean@remax.net

(902)892-2000