Why you should protect your credit status

Your credit rating can make or break your chances of securing a good amount of credit

14:16 04 August 2014

If you are among the many people who sometimes forget and occasionally miss a payment with your credit card, you should be in for a shock if you do not consider mending that early enough. 

 

Late payment will definitely hurt your credit score and will impact your probability of being given a mortgage. The reason -having a bad credit history will affect the lenders decision of whether to give you the loan or not- lies in the idea of whether you will be in a position to clear the mortgage loan or not. And if you never clear small payments, you are considered as having no chance of clearing a massive mortgage loan.

 

Know that all existing debts will be closely examined, so ensure you have all your debts paid even before you consider applying for a mortgage. Similarly, if you are relying on a very high percent of your credit card limit, you are in for a bad day at the lender. You have to get your credit usage to a percentage smaller than 25% if you are going to convince the lender to consider giving you a loan. 

 

In terms of considering which credit card to clearing first, always go for the card with the highest limit. Your mortgage lender may choose to go with others’ trust, and if your credit card lender trusted you to provide a high credit amount, definitely your mortgage lender will be pleased by this and consider offering you a higher loan.

 

To avoid credit payment oversights in small debts, like gas or shopping, consider using your debit card rather than your credit card especially when you are in the process of taking a mortgage loan. A debit card will take care of all regular bills and will help you avoid any forgettable moments, which can mess up your borrowing history.