Improve Your Credit Score and Lower Your Mortgage Rate

Credit Score in Salt Lake CityWhen you embark on the homeownership journey, you need to impress upon the mortgage lenders that you are creditworthy, faithful, and committed to the financial relationship that spans more than a decade. Your credit score offers profound insights into your financial habits, temperament, and capabilities.

Without fail, every mortgage lender Salt Lake City residents approach will dig into the credit history as well as the credit score. Lenders view you favorably if your credit score is high, preferably over 700 points. If your current credit standing is not outstanding, follow these steps.

Check your credit report

A credit report contains your entire financial history, and it forms the basis for calculating your credit score. If it contains errors, they could count against you and lower the score. Carefully examine the contents and note any incorrect information such as late payments and debt amounts. Dispute these anomalies with the credit bureau and have them rectified.

Pay your bills on time, a mortgage lender in Salt Lake City, says timely payment of your credit card bills significantly boosts your score and attests to your commitment to meeting your financial obligations with the least amount of fuss. Set up automatic payment reminders such as text or email alerts to ensure you are up to date with your payments.

Keep the debt balances low

Although the limit on your card may be high, low credit card utilization, preferably below 30 percent, improves your credit score. Using a small portion of your credit results in a low utilization ratio and keeps your balances low. The monthly balances count towards calculating your score and offers insight into your spending habits.

Your credit score determines mortgage loan eligibility and plays a significant role in deciding your interest rates. Remember, a high score corresponds to lower interest rates.