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Whether you want to buy a home now (or anytime soon), it is important that you have a good credit score. The better that your score is, the better home you will be able to afford. Even one point can take a few hundred dollars off of your monthly mortgage payment!
Even if your credit isn't really good, all hope is not lost. Here are some tips to improve your credit score.
Know your Score
If you don't know where you are, you won't know how hard you have to work. The lowest score that you can have to buy a home is 580. That being said, the higher your score is, the better off you will be.
Check it Regularly
There are ways that you can check your score on a regular basis without harming your credit. Many credit card and other companies allow you to check your credit at least once a year, without hurting anything. You should try to check it at least once or twice a year if you can to watch your progress.
Get Started Now
It takes time to get your credit score increased so it is important that you start as soon as possible. Even a few months of working hard can really make a difference when it comes to your credit.
Find Ways to Decrease Your Debt
One of the biggest reasons for bad credit is when you have too much debt. A little debt paid responsibly every month is good for your credit. However, if you have multiple credit cards that are growing, you need to find a way to start to pay them off.
Many people either cut back on some expenses in order to pay more off of their debt each month or find a way to increase their income. Even a part-time job once a week could really help you to get ahead of your debts.
Don't Close Old Accounts
Too many people try to close their old credit cards when they finally get them paid off. Though this may seem like a good idea, it can actually hurt your credit.
Old credit cards that you paid off responsibly can help your credit because they are showing that you have been responsible for credit for several years. If you close them, nobody will know that you had credit for that long.
Same for Loans
The same is also true for loans. Many people call their credit company to make sure that they take off any car and home loans once they are paid off. However, you want to show your creditors that you can pay off loans in a responsible way.
Pay Bills on Time
However, just because you are trying to decrease your debt doesn't mean that you can't stop paying your other bills. These need to be paid every month on time or the credit that you are trying so hard to improve will keep going down!
Fixing your credit isn't always easy. It can take a lot of time but if you start early (NOW), you have a good chance of improving your situation before you are ready to buy a home.
First, you need to know what your score is. Once you start working on it, it is always a good idea to keep an eye on it. You want to be able to see your hard work paying off!
One of the best ways to increase your credit score is starting to work on paying off your debt. Even if you need to get a part-time job to help pay more than the minimum payment, it will be worth it once you see the amount go down each month. However, once it is paid off, you shouldn't close it. This can actually hurt your credit since you need to be able to show that you can pay bills regularly.