January 16, 2018 by Shirley Xia
While many of us will be proactive about our fitness and getting our bodies into the best possible shape, the same can’t always be said when it comes to our financial situation.
Having your ‘financial self’ in tip-top shape will ultimately put you in a better position to achieve any financial goals you’ve set – whether it be to pay down accumulated debt, purchase a new car, or enter the property market for the first time.
A good place to start is by getting your credit history into shape. This can be as simple as paying bills on time and maintaining regular repayments on any current loans or credit cards.
That said, there are a number of other steps you can take to ensure your credit history is where it needs to be - so that you can ultimately achieve your future financial goals with fewer obstacles.
Don’t close accounts for the sake of it: You may think that it's beneficial to close old banking accounts that you no longer use, but closing these accounts can actually decrease your credit rating. A portion of your rating depends on the length of your credit history. A long credit history is considered to be beneficial, so you want to keep old accounts open to make your overall credit history as lengthy as possible.
Be careful about taking on new debt: Applying for a credit card or loan is an activity that is reflected on your credit report. Too many applications in a short period of time can have a negative impact on credit history. Opening many new accounts can also make it more difficult to manage your credit. Only apply for credit when it is absolutely necessary.
Mix it up: It is always a good idea to maintain a good mix of credit. The reality is, lenders want to see a mix of credit types to ensure that you can handle different types of credit. Mortgages, auto loans, credit cards and personal loans are all different types of credit.
As your local mortgage broker, I can review your credit history and help you to establish a plan to improve both your financial history and your financial future.
