Aspiring Homeowner? Here’s How to Improve Your Credit Rating

 Aspiring Homeowner? Here’s How to Improve Your Credit Rating

If you’re an aspiring homeowner with a penchant for property, one of the first things to consider before you start the fun part of house hunting, is the not-so-fun part. Also known as assessing your credit score, this is a crucial part of the buying chain that will ensure that when it comes to applying for that all-important mortgage, you’re in as good a place as possible.

And while there are a wealth of ways in which a credit score can be badly impacted – from late credit card payments to unpaid phone bills – so too are there steps you can take to improve your credit rating.

So, if 2020 is the year you want to land your own slice of real estate idyll, here are five simple steps that you can take today to improve your credit score.

Pay your bills on time

While paying your bills on time may seem like an obvious thing to do, ignoring them until they’re overdue is something that many of us are guilty of doing. Paying late or settling an account for less than what you originally agreed to pay can negatively affect credit scores, and how reliably you pay your bills is something that all lenders are interested in, particularly when a sizeable mortgage is at stake.

Pay off your debt

Mortgage companies won’t look favourably on applicants who have outstanding debt – whether in the form of unpaid credit card or multiple loans. Ensure that, if you do have any official debt, you’re making the agreed repayments each and every month; and if you’re in a position to pay your debt off sooner, do so.

Don’t close unused credit cards

Keeping unused credit cards open—as long as they’re not costing you money in annual fees — is a canny strategy when it comes to upping your credit rating, because closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit scores.

Keep credit card balances low

There’s no doubt that many credit card owners fall into the trap of occasionally splurging more than they can really afford on so-called ‘necessities’, that, let’s face it, ain’t all that necessary. By getting into the habit of only using your credit card when needed, and ensuring your balance is low, you’ll be one step closer to the kind of credit rating that will mean owning a property could turn from a dream into a reality.

Get Exclusive Access To OzHomeNews

Check out our latest content...

$8,200,000 – $9,000,000 Melbourne Penthouse Hits the Market

Australia’s Largest Architectural Passive House Tour

Beachfront Home Causing Waves on the Gold Coast

This American-Victorian Inspired Mansion Is Dressed to Impress!

Delightful Mosman Home Snapped Up for $7.1m

Kingsway Masterpiece On The Market

Check out our most popular articles!

Exclusive Entertainer’s Dream on the Market

$9.5m ‘Eagles Nest’ Listed on The Northern Beaches

007 Star Lists Malibu Mansion for $140m!

Remarkable Ridgeway Drive Home Up For Grabs

‘Castle in the Sky’ Sold for $4.2m

Top 10 Hottest Properties of the Week

Copy link