Keeping Your Credit Score in Good Shape in St. Louis
When you want to buy a St. Louis house, your credit score means a lot to your mortgage. It’s one of the numbers lenders use to gauge how likely it is that you’ll pay back your loan on time. The higher score you have, the more lenders will trust you and give you a lower interest rate on your mortgage.
Need help in maintaining or raising your credit score before buying your next home? Here’s how to keep your credit score in good shape in St. Louis.
Make Your Payments on Time
The easiest way to keep your credit score up is to pay your monthly bills on time. Late payments over 30 days look bad on your accounts, and the credit bureaus will dock your score for each late payment made after 30 days.
The simple answer here is to pay your bills on time, preferably in full. If you pay in full, then you won’t have any interest tacked on to your payment, and you’ll save money. If you can’t pay the full amount, pay as much as possible.
In the months ahead, you should be looking for ways to stop spending money. Credit scores remain high for those who spend less than 30 percent of their total allotted credit line, so if you have a $1,000 credit line, then you should only spend $300 per month.
Avoid Opening too many Accounts
New accounts mean new credit inquiries, which ding your score every time they happen. Though it may be tempting, avoid opening new credit cards at your favorite stores.
On the flip side, do not close older accounts. Older accounts look good on credit reports. They show you’re able to keep credit cards and be responsible with a credit line.
Pay Down Balances
Even if you pay your accounts on time, your credit score will still suffer if you’re carrying a large balance from month to month. That’s why it’s so important to pay more than the minimum balance required.
Don’t think that paying off one credit card with another is going to hide your balance from the credit companies. They will still see your balance, and your credit score will remain unchanged.
If you’re concerned about paying off balances at the end of every month, consider using a debit card instead of a credit card. Debit cards link right to your bank account, so the company gets the money immediately. This might help you stop overspending because if you don’t have enough in your account, then the sales will stop going through.
Keep Track of Your Credit Score
To improve your number, the best thing to do is to monitor your score over a six-month period and see how your changes can impact your score. Some credit cards will give you a free score with an account. This number isn’t always 100 percent accurate, but it’s a good way to track.
Over those six months, make your payments on time and try to cut back on your spending. Don’t open new accounts, and pay down any debts you have. At the end of the six months, you should see some improvement. It often takes a little longer to improve your credit score, so if you’re not ready to buy a house just yet, focus on your credit score.
Your lender can also provide you with helpful tips for improving your credit score. Ask him or her about how you can improve.