Your credit rating will impact the mortgage you will be able to get. Having a low credit rating will mean you may have significantly less favourable terms for the loan, or may not be approved at all.
Here are the factors which come into play when it comes to your credit rating
- Payment history
- Current debt
- Having too much new debt
- Types of debt you have
- Length of credit history (having a longer credit history is more desirable)
Luckily, there are several things you can do to maintain a high credit rating.
Here are some of the things you can do to make sure your credit rating stays high:
- Keep on top of your credit cards – whenever possible pay off your entire credit card balance each month.
- Don’t overcharge your credit cards – stick to the limit, and avoid going to the limit regularly.
- If you’re thinking about applying for a home loan, don’t open any new credit cards.
- Avoid using pay-day loan companies or fast financing.
- Check your credit rating and make sure there are no mistakes effecting your rating.
- If you have had any issues with debt, wait at least 12 months before applying for a mortgage.
- If shopping around for the best mortgage, do all your applications at once – having open home loan applications can negatively impact your credit rating.