5 Tips to Keep Your Credit Score Healthy

Has your dream of homeownership been dashed because your credit score doesn’t measure up? Well, you’re not alone. Millions of Americans just like you have less than stellar credit scores that can impact the ability to purchase a home, new car and get personal loans or more credit. If you’re saving to buy a home soon, then arming yourself with a good or excellent credit score is essential. Interest rates are still at record lows, and if you plan to take advantage of these competitive rates, your credit needs to be in top shape. Finance experts agree that checking in on your financial health, including your credit score, is one of the smartest moves you can make. Your FICO score is one of the most important indicators of your credit health. The scores range from 300 to 850, with scores between 800 and 850 rated as superior by lenders. Aim high and make it a routine to do something every month to improve and raise your score. Consolidate your debts into a credit card with a low balance transfer and try to pay off as much of your debt as you can. Check out these other practical suggestions to get smart about credit and give your score a boost:

Pay your credit card bills on time.

It seems like a no-brainer. But you’d be surprised how many people forget to pay their bills on time. When it comes to your credit health, late payments are a detriment. It’s important to keep track of when your bills are due, whether you pay them online or through the mail. Late fees can be exorbitant, some up to $40 a cycle and can negatively impact your credit score for up to seven years. Yes, seven years! When you pay your bills on time, it shows lenders you are responsible and can be trusted to pay back their loan on time.

Lower your utilization rate.

Your credit score is affected by your utilization rate. So, if you have a $2,000 limit on one card and your balance is $1,000, your utilization rate is 50%. Financial experts agree that your overall credit utilization should not exceed 30%. A good strategy to lower your utilization rate is to pay off your balances every month. If that’s not possible, you should try to pay more than the minimum payment. Even $10 extra more per month will help you get there faster.

Keep old credit cards to establish a long history.

Your credit card’s age can impact your score—positively. How long you hold on to your credit cards accounts for 10% of your credit score. You may be inclined to cut up your credit card after you’ve paid it off like a job well done—but not so fast! If possible, your older cards should be held on to because they help establish a beneficial credit history.

Pay down your cards to lower your DTI ratio.

It’s essential to pay the minimum balance on your credit cards and loans at the very least. The more you can throw at your balance every month, the better. That’s because lenders look at your debt-to-income (DTI) ratio when determining how much house you can afford. A DTI is determined by the amount of debt and how it relates to your income. In general, the lower your DTI ratio, the better the chance you’ll have of obtaining a mortgage at a rate you want. Lenders like to see a DTI ratio lower than 36%, with no more than 28% of your debt going to your mortgage payment each month.

Don’t open new lines of credit or take out new loans.

Your credit history is one of your credit score’s main components, and new credit inquiries, called “hard” inquiries, can harm your score and mortgage eligibility. Hard inquiries can stay on your credit report for years. So, if purchasing a home in the near future is your goal, then hold off on buying that new car, large appliance, or new computer for the time being because it could impact your credit score negatively.

The Bottom Line

There are many ways you can improve your credit score and build it up, but don’t be fooled into thinking it’s an easy fix. Take the time to do it right by consistently paying your bills on time, not spending more than you earn and putting as much money as possible towards the monthly balance. In time you’ll see that balance shrink and your credit score rise leading to better loan opportunities! The mortgage specialists at Premier Mortgage Associates have been helping people achieve the dream of homeownership for over 25 years. We know that qualifying for a mortgage can be frustrating at times, and you may not always know who to trust or turn to for advice. We’re a trusted lender with a reputation for customer satisfaction. We’ll help you make smart decisions by presenting you with your best options. And to ensure you don’t make any mistakes, we will be with you every step of the way.  To learn more about our loan products and programs, contact one of our mortgage specialists today!

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NQM Funding, LLC (NMLS # 75597) dba - Premier Mortgage Associates; Villa Home Loans; Texas: Consumers wishing to file a complaint against a mortgage company or a licensed residential mortgage loan originator should complete and send a complaint form to the Texas department of savings and mortgage lending, 2601 North Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out-of-pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at -