When it comes to monthly bills, it’s never too early to work on your credit rating by being proactive. Always keep your monthly utility, credit card, auto, student loan, and other payments on-time and current. Everything you do counts toward your ability to borrow money for your dream home regardless of need.
You don't want the moment you find the perfect house to also be the moment you find out that some negative things may be on your credit report. To begin investigating where your personal credit rating stands, we suggest you go to www.annualcreditreport.com. Everyone is eligible to get one free report annually from all three credit reporting agencies: Equifax, Experian and TransUnion. We highly recommend doing this for many reasons including recent internet hacking issues that have led to stolen identities. If fradulent information on your credit report is going to stop you from getting the keys to your new digs, you'd like to know that sooner than later.
The Importance of On-Time Payments
Delinquent, erratic and late payments typically get reported negatively to all three agencies. If they are correct, but reflect a poor credit history, there is no ethical way to remove them. In order to keep your accounts paid and current, some people find it helpful to sign up for the auto-pay option with their credit card or local bank. With this option, monthly bills are drafted automatically from the card or bank account on the day they are due. Keep in mind, most consumer advocates recommend against giving any creditor or service provider permission to debit your personal accounts for payments. But if you have trouble remembering payment dates, this might be worth looking into.
Whatever method you choose for paying your bills make sure they’re paid on time and that at least the minimum payments are made. The more positive your payment history is and the longer you make punctual payments the higher your credit score will be. That equates to better interest rates, terms and less interest paid over the life of your home loan.