How to Boost Your Credit Score and Secure Your Dream Mortgage?

Owning a home is one of the steps you can take to fulfil your Canadian dream. However, a bad credit history may come in the way of your mortgage dreams. A good credit score won’t just help you in everyday life but has a major role in your mortgage.

A decent credit history affects more than just mortgage approval. It also portrays you as a low-risk individual to lenders and brings down the interest rates. Before you scout tower ranch homes for sale, use the following tips to boost your score.

Pay In Full, On Time, Every Time

Payment history is one of the biggest factors that affect your credit score. With a weight of around 35 per cent, your payment habits and history make or break your credit score. If you haven’t missed any payments in the past, your score should be in the 700s. If you have missed payments in the past, now is a good time to start changing your payment habits.

Make sure that you don’t miss payments on your debt and pay them in full. Even if the bill is higher than it should be, pay in full. You can always sort things out later on by raising a dispute and getting the amount adjusted in the next month’s bill. Don’t do minimum payments on the bill since you’ll end up paying more interest and increase the odds of missing a payment later on. As you increase your credit score, you get closer to owning one of the tower ranch houses for sale.

Pay Off Old Debt And Say No To New Debt

With student loans, being debt-free may be impossible. However, you can always pay off consumer debt. Make early payments to bring down consumer debt and increase your debt-to-credit ratio. Reducing that ratio helps to increase your score and lenders use that metric to issue new loans and credit lines.

While you pay off old debt, don’t add new ones. Avoid getting new credit cards even if they come with the best offers. The age of your credit accounts also affects your overall score. As you add a new card or open a new loan, the total age of your credit accounts decreases, and your credit score takes a hit.

Review Your Credit Report Regularly

Canada has two credit bureaus that maintain and share your credit information with lenders:

1. TransUnion

2. Equifax

These bureaus collect information on your finances from creditors and apply those data points to their own formula to update your credit score. You can get those reports for free from Equifax and make sure that it’s accurate. Errors aren’t out of the ordinary. You need to identify those errors and reach out to your creditor to get them fixed.

Contact the credit bureau if the creditor takes too long to solve the issue. An error in the form of a missed payment can significantly decrease your score. That’s why actively monitoring your score is extremely important. A good credit score can also help you take out home improvement loans for hiring the best custom home builders in Kelowna. Dillworth Homes is one of them and can help bring your vision to real life.

Reach Out To Creditors If You’re Going Through Tough Times

Life can hit you in unexpected ways. For instance, you may have had a medical emergency that’s eating into your earnings or unemployed for a few months due to major industry changes. You won't be able to make payments on time if that happens. However, that doesn't mean your credit score needs to go down.

Try reaching out to your creditors and negotiate a new payment schedule with them. If you have made past payments on time and have a long relationship with your creditors, they may consider your request. Sending outstanding bills to collections costs them more money and if you’re a valued customer, they will be willing to help you out. It’s also important to cut down on unnecessary costs and subscriptions during this period.

Increase Your Credit Limit

The credit utilization ratio is the percentage of credit used compared to the total credit available to you. You need to keep that number low to increase your credit score. One of the best ways to increase that ratio is to increase your total credit limit. Ideally, you should maintain a credit ratio of 30 per cent or lower to let lenders know that you’re not credit hungry.

Owning a tower ranch home or new townhomes in Kelowna, in one of the best neighbourhoods is an achievable dream as long as you use these tips to boost your credit score. Once that’s done, you can hire a reputable custom home builder to build a paradise that’s exclusive to you.