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Building Your Credit to Buy Your St. Louis Dream Home

Jul 9, 2023 | Industry News

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Do you have dreams of settling into your perfect home in the vibrant city of St. Louis? Before you can embark on your homeownership journey, it's crucial to understand the significance of building and maintaining a healthy credit profile. This article will help guide you through the process of improving your creditworthiness. Let’s explore four key strategies that can help you enhance your credit score and increase your chances of securing a mortgage for your St. Louis dream home.


Pay Bills on Time, Every Time

Consistently paying your bills on time is a crucial factor in maintaining a healthy credit profile. Late payments on your bills can significantly impact your credit score and create red flags for mortgage lenders. You may find it helpful to set up automatic payments or reminders on your calendar to ensure you never miss a payment. Remember, even a single late payment can put a long-lasting negative impact on your credit history.


Establish a Solid Credit History

One of the fundamental aspects of building your credit is establishing a solid credit history. Lenders evaluate your creditworthiness based on your past borrowing and repayment behavior. To begin, consider applying for a credit card if you don't have one already. It would be a good idea to start with a secured credit card; these require a deposit as collateral. Be sure to make timely payments to demonstrate responsible credit management. Over time, this will help you establish a positive credit history and bolster your credit score.


Manage Your Credit Utilization

Credit utilization is a term that refers to the amount of credit you use, compared to your available credit limits. It's advisable to keep your credit utilization ratio low to demonstrate responsible credit management. Ideally, aim to keep your balances below 30% of your credit limit. If your credit card has a cap of $5,000, for example, then try to keep your outstanding balance below $1,500. By managing your credit utilization well, you showcase your ability to handle credit responsibly, which will positively impact your credit score.


Avoid Opening a New Line of Credit Before Applying for a Mortgage

When you're preparing to buy your dream home in St. Louis, it's important to be cautious about opening new lines of credit. While it may be tempting to take advantage of retail store discounts or promotional offers, doing so can negatively impact your credit. Each time you open a new line of credit, it triggers a hard inquiry on your credit report, and this can make your credit score dip. To maintain a stable credit profile, it's best to wait until after securing your mortgage before considering new credit opportunities.


Building good credit takes time and discipline, but the rewards are worth it when you're ready to purchase your dream home. By paying your bills on time, establishing a solid credit history, managing your credit utilization, and being cautious with new lines of credit, you can improve your creditworthiness and enhance your chances of securing a favorable mortgage when you’re ready to embark on your homeownership journey in St. Louis.

If you’d like to get pre-approved for a mortgage, you can do that here. We would also be happy to recommend some experienced, local Realtors to help you in the homebuying process. Just reach out to us — you can find all of our contact information at https://www.frontierhomemortgage.com/contact-us/

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