Having a credit score of 700 or higher can open doors for you, especially if you’re preparing to make a large purchase like a home or a new car. However, if your credit score is low, it can be difficult or even impossible to get the lines of credit you need. When it’s time to tackle your credit to purchase Woodbury, Irvine, real estate, there are several ways you can make improvements to your credit score.
1. Learn What Impacts Your Credit Score
Before you can make improvements to your score, take some time to learn what negatively impacts credit scores. For example, your score can be impacted by too many credit requests in a short time, a large debt-to-income ratio, late or missed payments, and private or government liens. By always being mindful of your credit score, you can start to make better decisions about how you manage your financial responsibilities.
2. Pay Bills on Time
Late or missed payments can negatively impact credit scores. In fact, even if you close a credit account, any late payments will remain on your credit report. Paying your bills on time can help you start to get your credit back on track. If you have difficulty remembering to make your payments on time, set due date alerts on your calendar.
3. Pay Down Credit Balances
Using credit to make major purchases can be useful, but the focus should be on paying down the balances as soon as you’re able to. The goal is to keep your debt-to-credit ratio as low as possible, as this demonstrates you can manage your payments and repay the money you’ve borrowed. Further, you’re more likely to get a loan or line of credit if your debt-to-income ratio is on the low end.
4. Go with Secured Credit Cards
Secured credit cards are obtained by depositing a certain amount of cash into a checking account in return for a certain amount of credit. For those who have bad credit, opening this type of credit card account and maintaining a positive payment history on it can get your credit back on track. If you default on a payment, the deposit will go toward covering that payment.
5. Check Credit Reports Regularly
Keeping an eye on your credit reports is crucial, as it allows you to catch and fix mistakes as they happen. Some mistakes that can occur include having a payment you made on time be reported as late or missing, credit accounts you have that may not be listed, and credit accounts you don’t recognize. If a mistake is found, you can dispute it.
If you are looking to purchase real estate in Irvine, CA, get in touch with Irvine Residential Living. Our knowledgeable real estate agents can show you the latest listings and help you find the home you’re looking for. Call 714-454-6304 today to start your search.