The almighty credit score. It is used by financial institutions to gauge your ability to pay off money borrowed for a loan, but what is it?
It is a compilation of your credit history – money you have borrowed, and how well and how quickly you paid it back. This is how banks & other financial institutions decide if they want to loan you money, and at what interest rate. A better credit score will get you a better interest rate, and the ability to possibly borrow more money.
One way to keep track of your financial health is to check your own credit annually. You can do this for free once per year by visiting AnnualCreditReport.com This website is directed by the government, it is absolutely free, and it will not affect your credit score. Many banks and credit card companies also offer a monthly credit score check to their customers.
The best advice is to keep your bills paid on time, don’t overuse credit cards, and don’t let your bank accounts be overdrawn.
We work with several local lenders who can walk you through this process in greater detail, and we are happy to give you their information, just ask!
This is part of our Buying A Home series.