If you are thinking of applying for a mortgage, you should know that your credit history or score plays a determining role in its approval because it allows entities to know your debt capacity and your level of responsibility in relation to previous loans.
Your credit score is measured by points, from 400 to 850, and the higher the rating in the report of the Credit Information Societies (SIC), better known as the Credit Bureau, the greater opportunities you have to obtain the loan because you present less risk. Of defaulting on payments.
With this in mind, to help you improve your score in the Credit Bureau, at La Haus we have listed six actions that will take you on the right path:
1. Build a credit history
It is often thought that avoiding borrowing will be a good sign of financial health, but it is not! How will financial entities know that you are trustworthy and responsible with payments? The best thing you can do is start giving the banks information about your financial behaviour; it starts with a credit card that is easy to obtain and manage.
2. Pay on time
Keep in mind the dates by which you must pay your debts and avoid delays. If for any reason it will take you to catch up, contact the financial institution and request a readjustment of the payment date or a postponement, it is very possible that they will accept it because their interest is that you pay them.
3. Control your number of credits
It is better that you have a credit account with an impeccable history than too many at once , so you will have a bank or entity that ratifies your excellent credit relationship and not several short ones that only indicate your need to borrow continuously.
4. Take care of your level of debt
The closer you are to your borrowing capacity, the more likely you are to default, because you will have a minimum range of maneuver in emergency or unforeseen situations. Our recommendation is that you do not commit more than 40% of your monthly income to pay obligations.
5. Keep your credit cards active
Unless you have to pay a very high monthly or annual amount, it is better not to cancel your cards, even when you are not using them, because you will have an excellent ratio between available credit and used credit, which shows responsibility in use.
6. Reduce inquiries about your credit score
We know, knowing your score in the Credit Bureau can generate curiosity, but each query is interpreted as an attempt to apply for credit and this is not recommended. Limit yourself to a maximum of two visits per year.
The more actions on this list you can carry out, the higher your score will be in the Credit Bureau, the greater the probability of obtaining your mortgage credit and the closer you will be to your own home.