Myrna Young Realtor/Coach
MYRNA YOUNG REALTOR/COACH
Myrna Young Real Estate Coaching Services
Why Credit Scores Matter & How to Improve Them
Credit scores are powerful indicators of creditworthiness and the likelihood of default, especially when applying for mortgages, credit cards, and auto loans, or when renting real estate and buying insurance. Your score can dramatically affect the cost of credit, because the price and terms you receive are (fortunately or unfortunately) based on this score.
If you are a Millennial and first time home buyer, here are a few ways to improve your credit score.
- Start saving 10% of your earned income and pay down your credit card debt. Start with the smallest amounts owed first. A lot of new credit cards come with a $300 to $500 limit. So pay those those ones off first. It will give you the mental stimuli of accomplishment and the motivation to continue paying off the other cards. Credit card balances is the major hit on your credit score. The balance owed must be less that 30% of the available credit. So get those credit card balances down.
- Pay your credit card bills on time. Late fees hurt your credit score. The best way to handle this is to set up automatic payments that come directly out of your bank account on the due dates. Even if you only pay the minimum payment. If you make more then the minimum payments, you an always make an extra payment.
- Redirect the money you are saving from credit card debt towards your Housing Fund account. Do not spend on shoes!
- Build credit with a revolving credit account such as an auto loan. You might be under the incorrect assumption that no debt is good but no debt is just as bad as having a low credit score. You will not qualify for a mortgage.
The best strategy to get started on your home ownership journey is to get pre-qualified by a Mortgage Broker.
Contact me at 954-999-6125 to set up your Home Ownership strategy session, you can also email me at email@example.com.
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