Kristyn Rost - Realtor® - Edmonton

If you’re dreaming of buying a home, you should know the score — your credit score, that is.

This three-digit number is the code that can unlock the door to a better interest rate on your mortgage, potentially saving you thousands of dollars. Therefore, achieving and maintaining a positive credit score is going to be an important factor when you’re buying a home.  Since there are countless companies bombarding you with targeted marketing campaigns that entice you to “Buy Now & Pay Later”, it’s important to understand how best to protect or improve your rating.

1. Take the time to assess your current payment obligations, then create a monthly budget and stick to it so you are able to pay your bills on time. Late or missed payments will lower your score quickly, while paying early and on time increases your score.

2. Do not apply for new credit cards.  Though the offer of saving 10% on your first purchase at the time of the application may seem attractive, it will cost you far more than you save.  The fact is, whether you carry a balance on the card or not, the available credit limit is included when calculating your score.

3. Refrain from making big purchases.  While buying that 60-inch 4K TV you’ve been dreaming of, and not having to pay for it for two years, may seem like a sweet deal, it will sour your score.  Since any debt you carry, regardless of the terms of repayment, will lower your score and the amount of home loan you are hoping to qualify for.

4. If you have credit cards you are not using, it’s a good time to take the initiative and cancel them.  Reducing your potential to borrow outside of a mortgage will enhance your score.

5. When possible, pay off credit debt in full. Focus on paying the debt with the highest interest rates first, and also plan to set some money aside every month.  Having monies in a savings account shows the credit companies you are reliable to not just save, but to repay a mortgage as well.

While your score doesn’t have to be perfect, it is affected by your spending choices. So, why not choose to make a few changes to some financial habits over the next few months that can improve your score and make you a stronger candidate for a better interest rate. 

If you see a new home as part of your future goals, let’s chat about your score and what you can do to prepare to make that goal a reality!

Sincerly,

The Rosts

INFORMATION HEREIN DEEMED RELIABLE BUT NOT GUARANTEED