Let’s face it. When you have a low credit score, you have little to no chance of getting a mortgage. Wherever you go, you will always be rejected. Companies are very strict when it comes to people with low credit scores. You are considered a high-risk applicant and you will most likely end up getting rejected.
This does not mean though that it will always be that way. Aside from mortgages, many other types of loans will be difficult for you to get given your credit score. One of the best ways to solve this problem is to improve your credit score. Here are some tips to help you achieve it.
Pay bills on time
Being able to pay bills on time is essential if you wish to increase your credit score. This is a sign that you are becoming more responsible. If you keep doing this, it will help increase your credit score.
Avoid maxing out your credit card
Don’t go too close to your credit limit since it will send your credit score spiralling down. Even if you pay your bills on time from this point onwards, it will still do little to nothing to improve your credit scores. The key is to use just 30% or less of the available credit.
Always pay credit card bills in full
You might notice that credit card companies and other loan providers have a minimum payment option. This allows you to just pay a small amount each month to avoid penalties. However, this amount is not the total amount due for that month. As a result, the remaining amount that was not paid will be carried over to the next month and it will have penalties by then. In short, it is a trap.
Keep updating your credit score
There are government agencies responsible for showing your credit score. Check them every now and then so you will know where you stand. It also helps if you analyse your current status. You will then find a way to deal with other debts that are yet to be paid, so your credit score will increase.
Look for alternatives
Although there are things you can do to increase your credit score, it does not happen overnight. You have to prove your worth before having a better score. Another option is to look for alternative mortgage lenders. You can get help from Mortgage Wise in this regard. They will find a way to match you with the right lender so that you can get the loan you deserve and not have a hard time repaying it.
Now that you understand how difficult it is when you have a low credit score, you should strive hard to keep your credit score high.