Are you planning to apply for a private mortgage or line of credit? Did you know that your credit score can affect your loan application? It is pretty common knowledge that the better your credit score, the easier it will be for you to get approved for a private mortgage or line of credit. Your credit score also affects how much you will be paying at the end of every month. That is why you need to improve and protect your credit score before you decide to apply for a mortgage or line of credit, even if you are using a mortgage broker. In this article, we’ll take a look at how to improve and protect your credit score and will cover the following:
- Review Your Credit Reports
- Regulate Your Bill Payments
- Limit Your Requests For New Credit
- Consolidate Your Debts
- Use Credit Monitoring To Track The Progress
Review Your Credit Reports
Checking your credit history helps you understand what items on your credit report are in your favour and those that aren’t. You should try and obtain a copy of your credit report and thoroughly review it to learn what items are hurting your credit score and what items aren’t. Low balances on your credit cards, on-time payments, and minimal inquiries for new credit are some of the factors that help improve your credit score. On the other hand, missed or late payments, high credit card balances, and too many requests for new credit lines in a short period of time are some of the factors that could reduce your credit score.
Regulate Your Bill Payments
Payment history is the biggest factor that influences your credit score. No matter how many debts you have on the report, if you have paid them on time, they won’t have a negative impact on your credit score. Avoiding late payments at all costs is the most important thing to improve your credit score. Make sure you keep track of your monthly payments so that you don’t miss any payments or delay paying them. Set up due-date alerts so you know when your payments are due and automate the payments from your bank account to prevent negative impacts on your credit history.
Limit Your Requests For New Credit
Your credit history shows two types of credit inquiries. They are called soft and hard inquiries. For example, a soft inquiry is when you check your own credit history. Checks performed by your employer or the financial institution that you already do business with are also soft inquiries. On the other hand, hard inquiries include applications for new credit cards, mortgage loans, auto loans, business loans or any other type of credit line. Too many hard inquiries in a short period of time can negatively impact your credit score. That is why you need to limit too many requests for new credit lines in a short period of time.
Consolidate Your Debts
If you have a large number of outstanding debts, it is advisable to apply for a debt consolidation loan from a bank and pay the other loans off. That way you will have only one payment to deal with. On the other hand, you may get a lower interest rate and pay off the debts faster by consolidating your debts. This helps improve your credit utilisation ratio as well as your credit score over time.
Use Credit Monitoring To Track The Progress
If you have a bad credit score and want to improve it before you apply for a mortgage or new line of credit, you may consider using a credit monitoring service. Most of the credit monitoring services are free and help you monitor the changes in your credit report. They will also help you prevent identity theft and fraud at the same time.
If you are planning to apply for a mortgage or new line of credit, you should consider improving and protecting your credit score. There are many ways of doing it including reviewing your credit history, regulating your bill payments, limiting the request for new credit, consolidating your debts, and using a credit monitoring service to track your progress.
At NWF Capital, we understand that banks aren’t always the best places to turn for a business or property loan. That is why you can turn to us. We’ll collaborate with you to ensure our loans are tailored to suit your specific needs. We are committed to providing a unique experience for each and every client.
Please call us today on 1300 974 985 or leave us a message and we will get back to you within 24 hours.