If you’re currently renting and have goals of homeownership, you may be wondering where to start your preparation for purchasing a home.
If you plan to take out a mortgage loan, boosting your credit score can increase the chances of you getting a loan with terms you prefer. So, what are some ways you can increase your credit score?
Whether you live alone or with roommates, having utility bills paid in your name can be highly beneficial. When bill payments are reported back to credit bureaus, on-time payments demonstrate your financial responsibility and consistency - Which can positively effect your score.
If taking out a line of credit isn’t an option for you, consider becoming an authorized user on someone else’s credit account, which can help you increase your score.
Before taking this step, find out whether the credit issuer reports payments for authorized users. Once you’re sure they report payments for authorized parties, you can be added to the account without changing anything about your spending.
In most cases, rent payments aren’t reported to credit bureaus; however, this is starting to change. Consider speaking with a potential landlord to see if they use applications to report rental payments. Payments made on time can be just the boost you’ll need to increase your credit score.
Opening up a line of credit can do wonders for boosting your credit score. Before getting started, it’s best to plan out your credit finances to avoid spending too much on frivolous things. Instead, you may want to use your credit card to pay off bills, which can increase your credit score from multiple fronts.
Using these tips and tricks can help you manage and increase your credit, so you can get the ball rolling towards homeownership.
