You've found the perfect Boston home. It's located close to your work, all your favorite shops are near by, the best coffee is practically next door, the gym is twelve minutes away by foot, there's a beautiful yard filled with lush greenery, the school system is superb for all the twelve children you plan on having and oh my god it's like heaven on Earth.
There's just one problem.
Your credit is not exactly stellar. Maybe it's because you didn't major in math. Why is your credit so important anyway?
Landlords, property managers and agents want to know your credit history so they can determine whether or not you pay your bills on time. It's similar to having a future employer look into your references and do a background check.
SO, WHY IS THIS SCORE IMPORTANT ANYWAY? Credit reports help assess the quality of your dependability. No one is going to rent or sell to you if it turns out that you are not able to make payments on time. If you don't have the greatest history with that, it definitely puts you in the AT RISK pile. With Boston's real estate market as strong as it is right now, it's easy for landlords especially to take their pick of any applicant. You want to make sure you are at the top of the list.
WHERE DOES YOUR CREDIT STAND? First thing you need to do is actually check your credit. It should ease your mind that checking your credit will NOT HARM YOUR CREDIT if you check it directly from a credit reporting agency that is authorized to provide these reports to consumers. If it turns out it's lower than you'd like it to be and you would like to improve it, it's going to take some time. It is also possible that there may be errors on the report as well. If you have late payments that were listed incorrectly, you should certainly take that up with the credit bureau and reporting agency.
USE YOUR CALENDAR A very importing contributing factor to your credit score is paying your credit card bills on time. If you've got a smart phone, it's easy to set repeating alerts and reminders every month. Some banks have even recognized the importance of setting up recurring payment options with their online banking and text/email reminders. One thing to look out for is that if you happen to enroll in auto payments through credit card or loan providers, the amount that gets deducted from your bank account every month is only the minimum payment. To have more control over your payments, setting up incessant reminders is usually the way to go.
CUT IT OUT! Another thing you can do instantly is just stop using your credit cards in general. You know what makes that easy? Cutting them up, letting them expire and just making the payments helps. Check to see the interest of all open accounts. Devise a system that allows you to put X-amount of dollars towards the card accruing the most interest, and continue paying the minimum payment on less urgent accounts.
PAY OFF YOUR DEBT If you think that you're solving one credit card issue just because you've paid one bill with another, you're sadly mistaken. Instead of shifting things around, just pay it off. entirely. If you need to use your credit card, keep your balance as low as possible.
YOU WON'T BE HAUNTED FOREVER If you've had late payments, start improving your score by repeatedly paying your balances on time. If you paid a bill late (even by just a few days) it will eventually be in the past and your new payment history will outweigh the old flaw. If your bill has gone to collections, paying this bill will unfortunately not make a positive dent on your credit. Much like the effects of breaking a mirror, a collection mark will stay on your report for a whopping SEVEN YEARS.
Though it may seem a bit daunting at first, there are things you can do to help your credit score. Rome wasn't built in a day though, so patience in this instance will definitely be a virtue. Though you might not be in the position to purchase your dream home immediately, give it time, be responsible with your finances, set up those reminders, eliminate your problem areas and it will all be ok in the end. *Fingers crossed*