Your credit score is a critical part of your fiscal health. The interest rate that home buyers can get on their mortgage, for example, is directly influenced by their credit score. Here are four things to know about that score.
A big part of your credit score is based on the ratio of the amount you owe compared to the credit you have available. Standard rule of thumb is to keep your credit utilization below 30%, if possible.
Another big part of your credit score is making payments on-time. Not paying your bills or not paying them in a timely manner can impact your credit score negatively.
You can get a free copy of your credit report once a year from each of the three major credit reporting companies – Equifax, Experian, and TransUnion.
Opening several new lines of credit in a short period can have a negative impact on your credit score as it may be seen as an increased risk for lenders. However, getting pre-qualified by a lender for a home should not affect your credit score, but it will allow you to know how much house you can potentially afford.
Today is a great day to learn more about what affects your credit score.
This advertisement is not credit improving advice. Please consult a licensed credit-improving professional or financial planner for your unique situation.