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  • Ron Goldan | 908.253.9700
 

How To Maintain Healthy Credit

To purchase a home, a healthy credit score helps, but is not always necessary. How can you improve your credit rating to obtain a mortgage loan? Here are some things that will help you boost your credit rating, and maintain an excellent credit rating.

Always Pay On Time

You need to pay your bills on time each month. Missing a single payment can reduce your credit rating quickly. It is easier to destroy your credit than repair it. To prevent yourself from missing payments, use automatic payments.

Avoid Spending Too Much

If you borrow too much money, you will have a large balance on the credit card. It shows that you do not have control over your finances, and you actually spend more than you can afford. The best thing you can do is to spend less than 30 percent of your total credit limit. This shows your lenders you only borrow when you need to.  To receive the best scores, pay off the entire balance you owe each month.

Don’t Borrow Too Often

How often do you apply for a line of credit? If you are applying for loans too often, it is important to know it can ruin your credit rating. Borrowing money often can lead to serious problems with your credit rating as it shows you are always looking for ways to borrow money. If you have too many consumer loan accounts, credit cards, and other accounts, lenders will have a hard time trusting you with a mortgage loan. You need to demonstrate financial ability by showing you only borrow when it is necessary.

Review Your Credit Report

It is important to review your credit report often. Monitoring your credit will help you understand when there is a concern that you need to repair. A simple mistake on your credit rating can drop your score tremendously. Use these tips to maintain a healthy credit score, and improve your ability to obtain a mortgage loan.