How do I increase my credit score?
While it may not be the answer borrowers want to hear, repairing your credit is the best thing to do before you submit a mortgage application. A higher credit score could save you thousands in interest payments, and give you more loan options.
Sure, these rules work as a guide for a good score, but they might not work for you. You may need to score a little more in some categories and a bit less in others. You may be past due on your minimum monthly payments and a bit more credit card debt than the list above allows, but that may be OK, as long as your other payments are good.
In order to grow your score, first, it’s important to understand what’s involved.
Payment history = 35% of your credit score.
This is the main reason people are continually saying “pay your bills on time.” It helps your credit score — a lot. Even if you pay the minimum payment due, you are paying on time. The single best thing you can do is pay on time. If you’re bad with credit cards, you’ll want to try to reduce your usage of them as much as possible.
Credit utilization = 30% of your credit score.
The amount of credit you’re currently using is also known as your credit utilization. The higher your credit card balance is, the higher your credit utilization. For example, if you have a…
