Building your Credit Score

In today's market, unless you have tons of cash, having an excellent credit score is paramount to securing a good loan for your next home purchase. This blog will discuss how to track and build your credit to help you achieve your future homeownership goals.

To start with, in order to build your credit you need a credit history. If you have no credit cards or loans then you can't build credit. The place to start is opening up a basic credit card, using it for purchases, paying most all of the balance but leaving a little to roll into the next statement period so there is something positive to report. I recommend starting with Capitol One, they have options for everyone and many excellent features.

Knowing what impacts your credit score and by what degree helps you to keep on track with how you use your credit. Consider the following impact graph:

Make the following your personal goals in order to build credit.

• Never spend more than you have. If you can't buy it with cash, don't use credit. You want to keep your balance low, because a high balance tears your credit score down very quickly!
• Do not open too many accounts. You will receive tons of credit card offers. Ignore them, and even opt out so you are not tempted. Don't have more than one or two credit cards.
• Never miss a payment. Always make your payments on time because this has a high impact on your credit score. If you can't make a payment, borrow from family or find a way to post payment on time.
• If you get a car loan, be sure you are stable in your job and make more than enough to cover all monthly expenses and be able to save each month as well. Some people have not been able to get home loans because of car loans, so keep this in mind and prioritize your finances for what really matters.
• Track your credit score regularly and look for any new accounts or unusual activity that you did not authorize. Always protect your login, password and credit information. Theft and fraud can do a lot of damage to your credit. Many credit companies will have automatic alerts for any new activity, Capitol One is great with this.

Here is a basic breakdown of how the scoring system works...

Be sure to keep things simple. Basically, don't have too many credit accounts, track your spending and keep all balances low, and your credit will grow! For more advice and information comment or send me a message and I will be happy to get you going down the right path.

My Website