One of the key points of getting mortgage loan financing is having good credit. And if you want good credit, there are some rules to follow. Over at Digital Money World, there are some good suggestions as to six simple rules of credit (my thoughts are included as well):
- Pay your bills on time. Make all loan payments, mortgage payments, rent payments and utility payments on time. For things like utilities, the company may not report on-time payments, but if you are late regularly, or if you don't pay, you will find that companies will report that, and it can be a problem.
- Start your credit history early. Get a credit card with a low limit and pay it off every month as soon as you can. Or buy a car. My personal credit history starts when I was 17 and my parents helped me buy my first car.
- Don't max out your accounts. The closer you are to your limits, the lower your score becomes.
- Check your credit history before you apply for a mortgage loan. Preferably well before. It will help you avoid nasty surprises.
- Know your FICO score. If you want it specific, you will have to pay (at myFICO.com or get it from the bureaus through annualcreditreport.com). You can get a general idea of your credit score from CreditKarma.com.
- Find out who can get your credit score. Different organizations can look at your credit for different reasons. Make sure you know who is looking at your information -- and where the credit bureaus are getting it.
I would also add that it is a good idea to know how to fix mistakes on your credit report. That way, when you find something wrong, you can fix the problem so that it doesn't continue to lower your credit score.
image source: sxc.hu
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