Buyer's will find it easier to get a home loan using these tips according to an article written 07/13/2016 by Johnson Fedrick.
1. Always pay on time.
2. Keep your credit owed within limits. A good ratio to have is below 50% of annual salary.
3. Always pay your dues on time, in full.
4. Use two credit cards if you are a definite credit card spender. If you have two credit cards, you can keep your usage percentage in control. For example, if you have a credit card with a limit of $20,000, and you charge $15,000 on it, you used 75 percent of your credit limit. Now if you split your amount into two, and spend $7500 each, then the percentage of usage will be around 37 percent. So it helps you in the eyes of FICO.
5. Maintain a good mix of good and bad loans--AKA, a healthy credit mix. Home loans and business loans are considered good loans. Personal loans and credit cards are considered bad loans. That is why investing in a home loan if you are a spendthrift is a better decision. You will have a good credit mix and be building an asset.
6. Pay high-interest loans and small loans first. It is a prudent decision to pay your home loans over longer periods. Pay off your personal loans, credit cards and private loans first, as they tend to have a higher interest (typically 15 percent to 36 percent) with no asset creation.
7. Close your unwanted savings accounts.
8. Check your credit reports regularly. Credit reports can be available for a minimal cost.
9. Monitor your co-signed joint accounts properly.
10. Negotiate if you cannot pay on time. This is also one of the best tips to improve credit score. People often know that they would not be able to pay their bills in advance. Regardless, they do not take any action. If you know you will not be able to pay on time, negotiate with your bank. Banks will be willing to extend your loan period and reduce the EMI if they see a genuine customer.
Information obtained from Johnson Fedrick 7/13/2016 article titled 10 ways Homebuyers can Improve Credit Score
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