Half of the people looking for a home loan have a bad credit score. Recent recession and hard economic times have out a great many of us behind out scheduled payments. However, a bad credit score isn’t actually the end of the world. There is hope out there for just about everyone. The following are a few ways which can help improve your credit score and help you secure a home loan.
Improve your payment history
Making timely payments can help improve your score dramatically. The key is to make sure that
- You pay your bills on time. Payments even as late as by a day or two could affect your credit score. If you are in the position of a not being approved then you may need to consider bad credit home loans from specialist lenders.
- Poor payments in the past may have little impact on your credit score if you start making all other payments on time. As soon as you start making timely payments it will set a pattern for a good payment history and you and be assured that your past score won’t have such a great impact when you apply for a home loan.
- Most people do well by taking a bit of counselling from a credit counsellor. If you are having a difficult time managing your finances a counsellor can be a great help. They will help you understand your current payment priorities.
- Another good idea is to pay off any previous debts. All your credit cards must be up to the mark with your debts paid off on time.
Make sure you check your credit history
Highly successful individuals are smart enough to check their own credit scores. This is a sure fire way of knowing where you actually stand. What you may consider a bad credit could not be so bad after all. Or if you have been thinking that you have an impeachable credit score and finding your credit history proves otherwise. Being aware of where you stand can help you improve your credit score a great deal. If you want more information on credit history and private mortgage loans, click here to learn more.
Get a new credit card
Getting a new credit card or two could actually have a good impact on your credit score. However keep in mind that you have a good credit limit and make timely payments. This would reflect on your credit history and can make it go up a notch or two.
However the key is to under use your new credit card and not just use it to make all the payments you want. The ideal credit utilisation ratio shouldn’t be more than 30%. It actually doesn’t matter that you always pay on time what matters is that you show up as a responsible person and not a spend thrift.
Increase your credit limit
Having your credit limit increased reflects well on your credit history. However you have to be careful that you don’t increase your spending habits accordingly. Doing so would put you back on square one. This is tricky and if you believe that you won’t be able to control your spending impulses then this idea probably won’t work well for you.
All these above mentioned tips and ideas can help you improve your credit score. Visit this page to find out if you could secure a home loan despite a bad credit history.