Credit scores are an essential part of life. Credit scores help lenders determine how likely you are to repay your debts and help you secure a mortgage when you are ready to buy a house. Your credit score will fluctuate depending on your circumstances, but the good thing about a credit score is that you can always change it. Here are some ways to help you develop a healthy credit score!
Know Where You Are At
The first way to help you develop a good credit score is by knowing your current credit score. There are tons of free ways to check your credit score, like experian.com or freecreditscore.com. This is a great first step to understanding your credit score and any adjustments you may need to make.
Automate Your Payments
Another way to help your credit score is by automating all your payments. One way to hurt your credit score is by missing payments or by paying bills late. Many institutions have ways of automating your payments so you can always pay your bills on time. If you bank with us, make sure you have your account set up to make automatic payments! If you don’t know how to set that up, check out our blog on how to get bill pay set up: (link to the blog about paying your bills online.)
What is Your Debt to Income Ratio?
One way companies determine what to loan you is based on your debt to income ratio. The debt to income ratio is how much money you make annually and how much debt you have. Having a safe and secure debt to income ratio helps companies feel comfortable lending money. Companies generally consider a 30% threshold to be excellent for consumers, meaning no more than 30% of your income goes toward debt obligations.
If you need help identifying ways to help strengthen your credit score, feel free to contact any of our Mabrey Bank employees!