Summer is finally here, and in Minnesota that means that along with the temps the housing market starts to heat up. On March 20, the Federal Reserve announced that it has no interest rate hike planned for 2019—welcome news for those looking to purchase a home. If this is the year you’re planning to buy your first home or are looking to upsize or downsize your lifestyle, now may be a good time to ensure your credit is healthy. In honor of American Housing Month, Village Bank would like to share five tips from the American Bankers Association for improving your credit score:
Request a copy of your credit score report, and make sure it is correct.
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com, or call 877-322-8228. Note that you may have to pay for the numerical credit score itself.
Set up automatic bill pay.
Payment history makes up 32% of your VantageScore credit score and 35% of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.
Keep balances low on credit cards and ‘revolving credit.’
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30% or less of a card's limit.
Apply for and open new credit accounts only as needed.
Keep this in mind the next time a retailer offers you 10% off if you open an account.
Don’t close old, paid off accounts.
According to FICO, closing accounts can never help your score and can in fact damage it.
Village Bank can help you navigate the world of mortgages to find the product that best works for you. Give us a call at 763-398-3592.
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